The AdvisorShares Pure US Cannabis ETF has reached an all-time low of $17.59 after the delay of Chuck Schumer’s CAOA Act. CAOA is short for Cannabis Administration and Opportunity Act. The ETF was priced around $25 to start the year. Though there is the potential for Schumer’s legislation to pass into law later this year, it won’t be considered the law of the land until August at the earliest. The original expectation was that Schumer’s legislation would go up for a vote in April.
Wow. When Booker said the other day that there were no guarantees CAOA would be introduced in April (4/21) because of legislative backlog, he wasn't kidding. We thought it might be delayed until May—I guess we're talking August. Hits never stop in $MSOS. https://t.co/Ti7QKwTQKS
— The Dales Report (@TheDalesReport) April 14, 2022
MSOS Tumbles
The AdvisorShares Pure US Cannabis ETF trades under the symbol of MSOS. The fund was trading at $43.59 on May 3. Rewind to February of 2021 and the ETF was trading at $51.94. The fund’s all-time low might present an opportunistic entry point for cannabis investors.
Details On The Delay
Senator Cory Booker noted that there is no guaranteed that Schumer’s CAOA will be introduced by the end of the month due to the lengthy legislative logjam. Unfortunately, it appears as though the backlog will delay the legislation all the way until the summer or even later. The proposed legislation would decriminalize marijuana. Such decriminalization would result from the plant’s removal from the Controlled Substances Act.
The proposed law would grant states with the power to administer or maintain their own cannabis oversight programs. The legislation also allows for the regulation of the plant at the federal level of government. Booker is a politician of note as he is one of the bill’s co-sponsors. Booker and Ron Wyden, a Democrat from Oregon will file the legislation prior to congressional recess later this summer.
Though Schumer is attempting to spin the proposed legislation’s delay as a positive, insisting that he is brining it closer to official introduction, the truth is the postponement is a major disappointment as evidenced by MSOS hitting its all-time low. It must be noted the original draft form of the CAOA was introduced in the summer of 2021, meaning we are nearly one year out from the legislation’s inception.
Will The CAOA Pass Into Law?
Plenty of Republicans are in opposition to the legalization of marijuana, meaning the CAOA might not pass in the Senate. However, if the proposed legislation receives full support from Democrats in the Senate along with a minimum of 10 Republicans, it would pass into law. The problem lies in the fact that some Democrats in congress are raising concerns regarding the legalization of marijuana.
We would be remiss not to mention that momentum is gradually building for the legalization of cannabis at the federal level. Wyden noted that the CAOA will be introduced prior to the recess in the summer to maintain the momentum established with the House’s passage of the MORE Act. MORE is short for Marijuana Opportunity Reinvestment and Expungement. The MORE Act has been passed twice by the House.
Furthermore, the PREPARE Act, short for Preparing Regulators Effectively for a Post-Prohibition Adult Use Regulated Environment, was introduced by US Representatives Brian Mast and Hakeem Jeffries earlier this month. The ACT is written with language that would create an opportunity for the federal government to finally bring marijuana prohibition to an end.
To Be Continued…
At the moment, it appears as though Schumer’s proposed legislation does not have the support it needs to be passed into law. However, the vote’s delay until the summer could be a blessing in disguise as it provides the political left with that much more time to build support across the aisle.
This article was originally published on The Dales Report and appears here with permission.
