What Are the Likely Long-Term Market Effects to Sessions’ Rescinding of the Cole Memo?
January 4, 2018
What We Have Learned: In the first couple of months after Sessions decided to rescind the Cole Memo, market uncertainty flared but without any real follow-up by the attorney general.
In January 2018, Attorney General Jeff Sessions announced that he would rescind “the Cole Memo,” a policy put in place during the Obama Administration which gave guidance to federal prosecutors operating in states where cannabis had been legalized for medical or adult use. New Frontier Data, the authority in business intelligence for the cannabis industry, forecasted that the decision will have a chilling effect on the industry.
“The immediate impact of Attorney General Session’s decision to rescind the Cole Memo will be felt most acutely in the public markets, where some companies have already lost 30% or more of their stock value since the announcement was made this morning. Overall, publicly traded cannabis companies are down about 15% since this news broke.
This is a similar though more acute reaction to what we saw after former Press Secretary Sean Spicer made comments one year ago suggesting that the administration was going to enforce medical and recreational cannabis differently.
However, looking more broadly, this announcement is unlikely to be massively disruptive to cannabis business that are already in operation. Consumers are not going to stop buying cannabis in legal states, and businesses are not going to start laying off people or closing their doors just because of this announcement. In the long run, the key question is how, specifically, the DOJ intends to enforce federal law in legal states, and that is still too early to tell,” said New Frontier Data CEO Giadha Aguirre De Carcer.
About New Frontier Data:
New Frontier Data provides objective, rigorous and comprehensive analysis and reporting for the nascent and underserved cannabis industry. New Frontier’s data and reports have been cited in over 65 countries around the world to inform industry leaders. New Frontier, the premiere Big Data shop in the sector looks beyond the plant cultivation and distribution, to raise the industry bar and improve visibility into what will inevitably soon be a mature and more complex industry. Founded in 2014, New Frontier is headquartered in Washington, D.C. and has additional offices in Denver.
New Frontier Data does not take a position on the merits of cannabis legalization. Rather, its mission and mandate is to inform cannabis - related policy and business decisions through rigorous, issue-neutral and comprehensive analysis of the legal cannabis industry. For more information or media inquiries, please visit www.newfrontierdata.com or contact Gretchen Gailey at 202-489-3821 or firstname.lastname@example.org.