BREAKING THE RYTHM

Is Public Cannabis Broken?

Right now, shit feels like it’s breaking—especially in parts of the market built on big promises of “transforming” the future. On the surface, the market looks “fine”—a routine ~5-10% pullback—but the names that mattered all year have reversed 20–50% in a few weeks.

Once the AI narrative slipped, every other “on-the-come” story started to unravel. Layer in a dysfunctional government, a stubborn Fed, rising geopolitical tension, a weakening consumer, and suddenly the narrative shifts. Even if that shift is temporary—because once again, humans simply can’t think non-linearly.

After a strong year in risk assets—especially post-April’s Tariff wobble—plenty of investors left the party buzzed and happy. But for those who stayed for the afterparty, some are potentially learning a valuable lesson: the last shot of the night typically leads to pain.

And then there’s cannabis. By now you know the Feds snuck in a last-minute hemp ban to reopen the government, effectively putting the entire $25BN hemp industry on a 365-day shot clock. Meanwhile, regulated cannabis is once again left waiting for Trump’s promise that was supposed to come “in a few weeks” that now at best is “in a few months.” Or worse, maybe longer? Maybe never?

Like other high-beta / low-liquidity situations that rely on the government getting its shit together, the last few weeks in cannabis have been outright bloody. The MSOS ETF declined -35% in a week with many cannabis names down more.

RYM is one of them—now down ~55% since Nov 1st despite a strong Q3 announced just 2 weeks ago. As you all know by now, RYM is GTI’s “Texas Hedge” with an effective ~80% ownership that became GTI’s strategic “Brandco” vehicle. Still rooted in hemp, but a major strategic option as cannabis stages continue to stack. (If you missed Part I on RYM, start here…I’m never going backwards).

What follows is Part II of the evolving RYM/GTI story. My goal: to dig through Q3 results, what the market post the hemp ban is implying (and by default, what that means for other private hemp start-ups), and the resulting implications for GTI.

Here’s the punchline if you can’t hang to the end: the market is valuing RYM as if hemp is dead forever and the valuable royalty stream—that has nothing to do with hemp—barely exists. As you’ll see below, the market is essentially valuing RYM’s hemp portfolio somewhere between negative –$150M to +$60M after royalties RYM will clip solely in the regulated channel.

Pretty interesting for a RYM business that’s accelerating and with GTI royalties about to kick in.

So with that, roll up a fat J and let’s lock-in. Welcome to SUNDAY SESH.

1/SET THE TABLE

RYM reported a solid Q3 ending September released on Nov 7th: $4MM in revenue, doubling sequentially and now run-rating $16MM annually. Importantly, Q3 didn’t reflect a full quarter of big initiatives announced intra-quarter, most notably the GTI brand acquisition in August. As a result, Q3 revenue was essentially all Senorita beverages ($3.5MM, up 2x sequentially) and the Incredibles hemp business ($532K, also doubled). See Note 2 in 10-Q.

But here’s what unfolded late in Q3 and into October—clear signs the Q3 print is already looking in the rearview mirror: