(NEW YORK)–Ludlow Research, a small cap equity research firm based out of New York City, announced it was placing the marijuana and cannabis sector on ‘watch’ based on pending developments out of Washington, DC.
In May 2017, Attorney General Jeff Sessions wrote a letter to Senate Majority Leader Mitch McConnell, Speaker of the House Paul Ryan, Senate Minority Leader Charles Schumer, and House Minority Leader Nancy Pelosi asking that Congress not approve the Rohrabacher-Blumenauer amendment, which prohibits the Department of Justice from spending federal funds to prosecute states acting in accordance with their own medical cannabis laws.
This uncertainty put a risk off on the cannabis sector since May, with many of the marijuana and cannabis stocks drift to much more reasonable valuations. But things may be ready to change on the political and regulatory side that could send the whole cannabis sector rallying.
Sessions Position as Head of DOJ
After President Trump interview with the New York Times, where he stated if you knew what he knows now he may not have selected Jeff Sessions as Attorny General rumors are beginning to swirl that Sessions could resign as head of the Dept. of Justice (DOJ).
The odds are unlikely this recent controversy could result in change at head of the DOJ, but any additional issues could become a catalyst going forward.
Since Attorney General Sessions was such an anti proponant of state legalization of marijuana any chance that there could be a change of head at the DOJ could send the whole sector rallying in a major short squeeze.
Pending Vote In Congress
A much more likely issue that could rally the cannabis sector would be a vote on the Rohrabacher-Blumenauer amendment.
In the next week or so, before the August recess, Congress is expected to vote on the Rohrabacher-Blumenauer amendment in the Fiscal Year 2018 appropriations bill. If the Rohrabacher-Blumenauer amendment is passed within the bill traders could also see a sharp rally within a select few marijuana and cannabis plays.
Related: Ongoing Coverage of Cannabis and Marijuana Sector
Ludlow Research made note that although risk remains the recent pull back in the sector, and potential moves on the political and regulatory side, could set the stage for “risk on” status in cannabis stocks, and thus has placed the sector as a whole on ‘watch’ as news develops.
Here are a few cannabis related stocks that could be in play.
About Ludlow Research
Ludlow Research is a New York based equity research firm that focuses on providing research coverage and investor awareness services to emerging small-cap companies. For over 14 years we have worked to provide our readers with a simple way of evaluating the current and potential value of small-cap companies, while garnering these clients greater market awareness to new investors. For more information on us please visit www.ludlowresearch.com