No wonder the AdvisorShares Pure US Cannabis ETF , is down 14.9% on the year and a stunning 42.6% from all-time highs set back in February.
Mainly, high excise taxes up to 25%, with a large portion of those funds going to a social justice fund for communities of color, were thought to be elements unlikely to draw needed Republican support.
Cannabis stocks climbed by double digits on the news, as the prospect for Republicans to join the congressional effort led to optimism over legalization.
Both bills would also allow for the expungement of past cannabis-related crimes, although there may be some differences between the two in terms of how far expungements would go.
The main difference between the two bills is that Mace’s proposal has only a 3% excise tax on sales for 10 years, while the Democrats’ bill has a 10% tax that would rise to 25% after a few years.
Yet all of these companies are all growing fast, with revenue growth rates of 64%, 49%, 74%, and 41%, respectively.
If the tax and financing burdens cannabis companies must endure are removed, it would be a boon to all involved, as each company is earning healthy EBITDA margins, even if net income is stifled by unduly high taxes.
Still, given the consolidation in the space and very reasonable valuations on an EBITDA basis after their summer swoon, U.S.