The markets are settling down from historic levels of volatility, and this extends to the Cannabis and Hemp Sector. Shares in CanaFarma Hemp Products Corp traded in Canada under symbol (CSE:CNFA) and in Frankfurt on the German Borse under symbol (4K9.F) are having a quiet week. Stocks in all sectors have finally settled in as Americans shelter at home hoping Covid-19 does not darken their door.
The Cannabis Sector volatility has slowed in all stocks in the sector, and much of this has to do with the uncertainty around the effects of the economic slowdown not just on the demand side of the ledger, but also on the supply side. The concern at the moment is about the potential changes in legislation and research.
After nearly 4 years of what some researchers saw as foot dragging, the Drug Enforcement Administration (DEA) has announced it will evaluate 37 applications to grow marijuana for medical research and proposed new rules for the prospective growers that outline how the cannabis-growing program would work.
“The release of this framework is absolutely monumental and is the biggest, the most meaningful, and material progress made in federal cannabis policy in decades,” says George Hodgin, CEO of the Biopharmaceutical Research Company, one of the applicants. “It opens up a path for traditional drug development in the United States,” whereby researchers can conduct clinical trials and seek approval from the Food and Drug Administration (FDA) for marijuana-based therapies.
Not everyone shares Hodgin’s optimism. Federal rulemaking can take years because it involves soliciting and responding to public comments, not to mention potential litigation over the decision, says Shane Pennington, an attorney at Yetter Coleman LLP, a Houston law firm representing one of the applicants, the Scottsdale Research Institute (SRI). “DEA basically has … found a way to put this on the back burner a lot longer.”
The concern among investors is that Cannabis and Hemp emerge strongly from the Covid-19 market decline of 2020. The demand side of the picture is solid as Cannabis has become a new market for many during the shelter in place era. Legal purchases of Marijuana brought new products to an industry that has operated in a black market for 50 years.
Now what the industry needs is a federal mandate and full recreational legalization in North America from Canada through the US down to the bottom of Mexico.