The recent cannabis rescheduling news should have been a confidence-building moment for public market investors.
Instead, it exposed a deeper issue: trust in how the public markets function, and being too focused on timing.
On a recent Trade to Black podcast, the panel captured what many investors are feeling right now:
“With an announcement of that size, you get new investors involved… and what happens is the stock basically goes down 40% across the board. That’s a trust issue.”
Another point hit even harder:
“Their first experience is a rescheduling announcement - which is the biggest - and the stock goes down 20, 30, 40%.”
The discussion went on to explain why this happens: thin liquidity, microcap dynamics, ETFs, swaps, and market makers aggressively managing exposure in an illiquid environment. In other words: price action driven less by fundamentals and more by structure.
And this is the part worth pausing on.
Cannabis can be a compelling long-term investment, especially as federal policy shifts toward normalization.
But public cannabis equities are still subject to:
• extreme volatility
• thin liquidity
• ETF and swap mechanics
• market maker pricing distortions
That’s why more sophisticated investors are asking a different question:
“Do I want exposure to cannabis… or exposure to cannabis public market mechanics?”
Private investment vehicles offer a clear alternative:
• No daily mark-to-market volatility
• No market maker or swap-driven price action
• Valuations driven by operations, cash flow, and regulatory progress. Not intraday trading dynamics
For investors who believe in the cannabis thesis but are frustrated by public market behavior, private structures can provide alignment, patience, and control that public markets currently do not.
@TheDalesReport
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