The weed industry is edging closer to legalization in the United States. But before it gets there, there are some hurdles it must cross. One of which is the enactment of the MORE Act of 2021.
Source: Nguyen Linh
What has happened?
The Marijuana Opportunity Reinvestment and Expungement (MORE) Act of 2021 is a bill aimed at removing marijuana from the list of contraband substances in the United States. The bill is supposed to be voted on in the Senate sometime this week.
On the release of this news, marijuana stocks have soared amidst optimism that the law might be passed. The stock of Clever Leaves Holdings Inc. (Nasdaq: CLVR), one of the manufacturers and growers, posted a 144% jump on Friday.
However, rumors started to come out that the bill may not actually pass. And just like that, Clever Leaves shed most of its rise by Monday.
So What?
The MORE act needs 60 votes in the senate to pass, and many analysts believe it would struggle to secure those votes. While a failed legalization of the bill at this time may not be the end of the road for marijuana stocks in the United States, it remains a huge stumbling block.
Also, there’s still the SAFE banking act that exposes weed companies to more financial services that may be passed before the end of the year. So, the failure of the MORE Act legalization is likely a temporary setback.
Now What?
Clever Stock is in a good place financially. The company recorded a 27% growth in net revenue to $15.4 million in the recently concluded annual report for FY ‘21. Subsidiaries of the company in Germany and Portugal also recorded their first revenues.
Source: Clever Leaves
If weed gets legalized in the U.S., Clever Leaves is well placed as one of the largest cultivation and extraction companies in the country, and will be able to compete in the stiff race to the top that the weed industry finds itself.
Technical Analysis
Judging by the technical analysis alone, CLVR stock is untouchable for the stock trader with anything below a voracious risk appetite. The stock has recorded nothing but a dip in about year. It had its most recent high in August 2021 and has since dipped by 84%.
The trick in knowing when to get in on CLVR is to know where the dip bottoms out. It might seem like we have a bottom at the $0.94 price level, but we can’t be sure until the level is retested.
Until we have stronger reasons to buy CLVR stock, we recommend you hold.
