top of page

Illusion vs Reality: The Green Wave? OR Misleading Legalization News

Misleading Legalization News

As cannabis enthusiasts and industry insiders, we often find ourselves on the edge of our seats each time the topic of cannabis rescheduling or federal legalization makes headlines. It's a cycle we've witnessed for years, yet progress never happens. Could there be more to the repetitive cannabis narrative than meets the eye? Beyond the excitement of rescheduling or decriminalization announcements, we should consider the intent of manipulation behind cannabis legalization news. 

Join us on a journey as we attempt to explain market dynamics where excitement and speculation of cannabis legalization often influence strategic investment. Our article aims to equip cannabis consumers and warn would-be investors about misleading cannabis legislation. Buckle up for our exploration of market manipulation and insightful parallels between Wallstreet and the dynamic world of cannabis stocks.

The Hype vs. Reality

Despite periodic promises and scheduling debates within congress, the journey toward federal cannabis legalization appears to be more of a cyclic spectacle than genuine progress. This raises a critical question: Who truly benefits from this theatrical dance of legislative discussions?

Following the Money Trail

Considering that most news drives the sentiment of Wall Street, it becomes apparent that the real winners might not be those advocating for cannabis enthusiasts' rights. Instead, it's the market makers and stock professionals engaging in what seems like a strategic game of pumping and dumping cannabis-related securities.

One notable example of a cannabis pump and dump involves the Canadian company CannaVEST Corp. (CANV). In 2014, CannaVEST experienced a significant surge in its stock price, driven by what appeared to be inflated market hype around the cannabis industry, which was expanding rapidly around Colorado legalization. 

During this period, there was a general enthusiasm surrounding cannabis-related stocks, partly fueled by the legalization trend. A company called CannaVEST, in particular, gained attention for its involvement in the hemp and CBD sector. The stock's price saw a 100x increase as speculative investors jumped on the legalization bandwagon.

However, concerns about the company's financials, corporate governance, and the sustainability of its business model began to emerge. This led to a subsequent sharp decline in CannaVEST's stock price. The sudden rise and fall of CANV exemplifies the characteristics of a pump and dump scenario, where exaggerated market enthusiasm is followed by a significant correction as reality sets in.

This case serves as a cautionary tale for investors, emphasizing the importance of thorough due diligence and skepticism in volatile markets, especially a new market like cannabis.

Cannabis Stocks: A Risky Business

As someone deeply rooted in the industry, it's clear that investing in cannabis stocks is a slippery slope. The allure of a booming industry can blindside investors, especially those hoping to capitalize on the green rush. However, the inefficiencies and uncertainties surrounding the cannabis sector make it a challenging terrain for fruitful investments.

Words of Caution

For those considering diving into the world of cannabis stocks, a word of caution might be in order. The excitement around potential federal legalization doesn't necessarily translate into immediate gains for investors. But also I'm not a financial advisor and this is not financial advice.

Supporting from the Sidelines

If you're passionate about cannabis medicine but not keen on risking investment in the current volatile market, there's plenty of ways to contribute to legalization. Supporting the cause as an educated consumer and waiting for a more organized and retail-friendly market is best. It's always nice to invest in things we believe most in but with the cannabis industry it's probably better to wait for a more stable financial situation to emerge.

Following the Money Trail: Who Profits?

Peeling back the layers of the cannabis legalization debate reveals hope for positive legislative changes, but it seems that certain financial institutions might be capitalizing on public uncertainty - an unethical tactic used by financial institutions who issue such securities.

Prominent hedge funds and investment firms are among the entities positioned to benefit from the cyclic nature of cannabis-related discussions. Their ability to navigate volatile markets allows them to capitalize on the fluctuations triggered by legislative news. Major investment banks, known for their strategic approach to market dynamics, are key players in the financial landscape that may profit from the ebb and flow of cannabis-related securities. Their involvement in underwriting and trading makes them significant influencers. Exchange-Traded Funds (ETFs) tied to cannabis-related stocks create another avenue for financial institutions to capitalize on the market's uncertainty. ETF managers can leverage the enthusiasm surrounding federal legalization to attract investors seeking exposure to the cannabis sector.

There are a few entities and individuals who are often considered influential and capable of swaying market prices through public opinion. Elon Musk (Tesla, SpaceX) is known for his strong presence on social media. His tweets about companies like Tesla have been known to impact stock prices and generate significant market reactions. Warren Buffett (Berkshire Hathaway) is one of the most successful investors in history, Warren Buffett's statements and investment decisions are closely followed by the market. His endorsement or criticism of a company can influence investor sentiment. Federal Reserve statements and actions by officials from the U.S. Federal Reserve, such as the chairperson, can have a profound impact on market expectations. Comments on interest rates, inflation, and economic policies can sway investor confidence. Large Institutional Investors including major hedge funds and mutual funds, have substantial financial power. Their investment decisions and public statements about specific companies can influence market sentiment. Online communities, like Reddit's WallStreetBets, have demonstrated the ability to collectively influence stock prices. You see cannabis investments mentioned often in these forums.

We hope to research more article concepts about money related to cannabis consumers & investors. Until then, remember not to get excited when the next discussion about rescheduling cannabis comes up. 



Subscribe to get exclusive updates

Thanks for subscribing!

bottom of page