Please ensure Javascript is enabled for purposes of website accessibility
Michael Brush

Michael Brush

Chief Analyst, Cabot Cannabis Investor

Michael Brush is an award-winning Manhattan-based financial writer who writes a stock market column for MarketWatch. He is editor of Brush Up on Stocks, an investment newsletter. Brush previously covered the stock market, business and economics for the New York Times, the Economist Group, MSN Money, and Money magazine.

Brush attended Columbia University Business School (Knight-Bagehot Fellowship program), and the Johns Hopkins University School of Advanced International Studies (SAIS).

He is the author of Lessons from the Front Line (published by John Wiley), a book offering investing insights based on the experiences of leading professional money managers he’s met on the job.

Brush has received several awards for excellence in journalism including the Best in Business award from the Society of American Business Editors (SABEW), the American Society of Magazine Editors’ National Magazine Award for General Excellence in New Media, and awards for excellence in local news coverage in Pennsylvania, where he started his career.

From this author
Cannabis stocks have struggled as the market awaits regulatory moves by the president, but a looming debt wall offers investors an overlooked opportunity.
February and early March triggered a rapid correction in U.S. equity markets, but these two bullish signs are signaling better times ahead.
Cannabis policy has taken a backseat to global trade in Washington, but these three bullish cannabis sector trends could push stocks higher.
The cannabis sector remains unloved as investors abandon hope that President Donald Trump will come through on his campaign promise to reschedule the drug.

Moving cannabis to Schedule III from Schedule I under the Controlled Substances Act would help cannabis companies by obviating an IRS rule that prohibits them from deducting operating expenses (Rule 280E).

I continue to think Trump will live up to his “promises made, promises kept” mantra. It will take some time, because he’s obviously active on many fronts, and cannabis reform does not rise to the level of top priority. Polls continue to show the majority of voters favor reform, particularly younger voters. So, there’s a favorable political angle for conservatives in cannabis reform. Cannabis sales growth continues to be particularly strong (6.2%) in Missouri, a red state.
Insiders at two of our Cabot Cannabis Plus Insider Portfolio names just made large purchases of their company’s stocks. Besides cannabis, I have followed insider activity overall for a few decades. These are significant buy signals, in my experience.
It’s cannabis company earnings season. So, I highlight fourth-quarter results in this issue.

Before we get to the details, here are the key takeaways from earnings reports:

* Price compression continues, creating an ongoing “Hunger Games” environment in which only the financially strong will survive, given the debt levels at a lot of cannabis companies. Much of this debt comes due over the next two years. Bankruptcies might be the clearing event that helps bring an end to price compression. None of our names appear to be at risk, but no guarantees...
The last two weeks have been challenging for investors, and there’s a case for more selling ahead, but some bullish signals are starting to emerge.
Cannabis investors need to practice patience while they wait for the next major sector catalyst, but they’re on the horizon on both the state and federal levels.
The cannabis sector’s “shadow lenders” offer rich yields to buoy the portfolios of cannabis investors should Trump’s “promises made” fall flat.
Are promises made really promises kept, for President Donald Trump?

No one really knows, so cannabis equity investors remain depressed.

They can’t get any bullish signals from the administration on rescheduling, which Trump promised.

But there is a way to deal with this uncertainty as a cannabis investor. Shift your focus to getting paid to wait. I’ll explain why, and how, below.
Despite the deep negativity swirling around marijuana stocks, one key lobbyist believes major cannabis reform remains on track in Washington, D.C.
These are dark days for cannabis investors, maybe the darkest ever.

AdvisorShares Pure U.S. Cannabis (MSOS), one of the key benchmark exchange-traded funds in the space, is down 85% in the past five years against market gains of 80%.

As has always been the case, the fate of cannabis stocks is much more about politicians than the leadership and results at cannabis companies.
Cannabis stocks ended 2024 on a down note, but 2025 will almost certainly be better. So I’m making a handful of cannabis calls for 2025, some of which could be quite bullish.
Progress on federal-level cannabis reform remains uncertain and demands patience from investors. In Cabot Cannabis Investor, we’re getting paid to wait.
As has been the case for the past decade, the fate of cannabis stocks lies largely in the hands of politicians.

Cannabis companies have been getting solid support from state-level politicians. Forty states now allow sales of medical cannabis.

Sure, they are permitting too many stores, and that is putting downward pressure on pricing. At some point, the market sorts that out. Prices will fall to a point where it is no longer that enticing to bring on new supply, yet companies will have gotten lean enough to produce profits. We are not there yet. But we will get there.
2024 was a rough year for cannabis investors, but 2025 could be much better. Here are my top eight predictions for the cannabis sector for the year ahead.
Here are my top eight predictions for the cannabis sector for 2025.

1. Cannabis rescheduling goes through

Promises made, promises kept. Trump loves a “deep state” challenge. Put these two together, and it seems probable that rescheduling could happen in 2025.
Cannabis stocks have declined sharply since the election, and while it may take some time for them to bounce back, there are still meaningful catalysts for cannabis in the years ahead.
Cannabis stocks are set to close out the year with a punishing 14% decline. Cannabis investors need help from anywhere they can get it.

It looks like it could come from an unusual place in 2025. The future of the cannabis industry is now in the hands of President-elect Donald Trump.

If anyone told me a few years ago this would be the case, I might have asked them what they are smoking.

However, the reality is that during his presidential campaign, Trump endorsed all three of the main reforms that would legitimize the industry and boost cannabis share prices: Rescheduling, bank reform known as SAFER banking, and legalization of recreational use. Trump endorsed the first two outright. He implicitly endorsed legal rec-use because he supported the Florida referendum which would have made this change. At the very least, he has openly endorsed decriminalization.
President-elect Donald Trump endorsed three major cannabis reforms during the election, and the future of the cannabis sector may now lie in his hands.
Cannabis stocks have become so cheap that M&A activity is now underway. Investors should stick with the financially sound players to benefit.
May the buyouts begin. Poor sentiment has pushed the values of cannabis companies so low, the strong are now buying the weak. Like the recent cannabis company insider buying, this is a signal that valuations may be close to bottoming here.

However, realistically, it could be a while before the sector recovers since we are dependent on politicians for progress.
Cannabis stocks have pulled back meaningfully in the last few months, but there are reasons to remain optimistic on the sector’s long-term potential.
Cannabis stocks are now trading like the group is no longer a viable sector.

I do not believe that is the case. True, companies continue to face pressure from price wars and unbridled issuance of permits for new stores in New Jersey and elsewhere.

But ultimately, the fate of cannabis businesses lies in the hands of politicians.
We continue to get positive signals out of Washington, D.C. for cannabis companies.
Cannabis stocks on Monday traded as if president-elect Donald Trump has abandoned his marijuana reform policies.
Elections delivered a body blow to the cannabis sector as investors seemingly forgot President-elect Trump’s support for positive reform.
The cannabis sector is taking a severe body blow because of election outcomes.

The big negative: Florida voters rejected Amendment 3, which would have legalized recreational use. Voters in North Dakota and South Dakota also rejected cannabis legalization.
Cannabis is a high-profile issue in the upcoming elections, and today we’ll explore three potential election scenarios and how they’ll affect cannabis stocks.
Given that the majority of Americans on both the left and the right favor cannabis legalization, it’s no surprise that marijuana has emerged as a significant campaign issue.

Therefore, it makes sense to think about election outcome scenarios and what they mean for cannabis investors.

Big picture, no matter what happens in the presidential election, cannabis wins. That’s because both candidates support major cannabis reform in one way or another. But obviously, some outcomes are better than others. Here are the three main scenarios, from best to worst.