Cannabis stocks are dropping like BlockFi's valuation.
Cannabis stocks aren't alone in their decline, of course, as markets have been in a steady fall since the the Federal Reserve hiked interest rates in early May.
Investors flush with cash during the pandemic pushed cannabis ETFs like Amplify Growth Opportunities (CNBS) to all-time highs.
CNBS reached a closing high of $34.75 in February 2021. Since then, the index is down nearly 80% to $6.53 at last check.
The Global Cannabis Stock Index closed at its lowest level ever to end June, down 23.1% to $14.76.
The index is down 55% year to date. Minus a slight uptick between March and April, the cannabis-focused index has fallen nearly every month in 2022.
That decline comes after a 26% drop in 2021.
The index's losses in June were led by Leafly (LFLY) , Hydrofarm (HYFM), Power REIT (PW), and TerrAscend (TRSSF) .
The cannabis industry may be most reflective of the divide between Wall Street and the real world as the American support of legal marijuana reaches record highs, according to Gallup.
Unfortunately for cannabis investors and users, there is also a divide between the real world and the political world.
Virginia Governor Breaks Campaign Promise
During his campaign for the state's head office, Republican Gov. Glenn Youngkin promised Virginians that he wouldn't scale back the state's hard fought cannabis victories.
The strategy made sense to appeal to the more liberal voters in the state's northern districts in the suburbs of Washington, D.C.
Fast forward a year, and changes to Virginia's cannabis possession laws are set to take effect on July 1.
The 2022 budget bill signed by the governor recriminalizes public possession of over four ounces, but less than one pound of cannabis as a Class 3 misdemeanor punishable by a $500 fine.
Second or subsequent offenses are Class 2 misdemeanors punishable by up to six months in jail and/or a $1,000 fine.
“Governor Youngkin’s actions are in direct conflict with his campaign promise to not roll back legalization and they are out of touch with the opinions of the majority of Virginians,” said JM Pedini, development director and the executive director of Virginia for the political cannabis advocacy group NORML.
During a legislative session in April, Youngkin attempted to recriminalize activities involving the possession of two ounces of marijuana. That state's Senate was able to block that effort.
SAFE Banking Update
The SAFE Banking Act is a commonsense, bipartisan bill that would fundamentally transform the cannabis industry for the better.
So of course it is having a tough time making its way through the legislative process.
In June, the most recent best chance to get the bill passed was defeated when it was dropped from the Competes Act.
The Secure and Fair Enforcement Act, also known as the SAFE Banking Act, was removed from the bipartisan China competition bill, the Competes Act, with Republicans arguing that the SAFE act shouldn't be included, The Hill reported.
Cannabis businesses that operate in states with legal recreation markets typically operate as all-cash businesses because big banks don't want to provide services due to the federal illegality of the drug.
Those businesses usually rely on state-chartered banks or credit unions for their financial services.
