Cannabis as a business is thriving in the US, and the industry is about to enter a critical time as Americans prepare to vote.
With the US presidential election right around the corner, the Investing News Network (INN) talked with a few experts to determine what investors can expect from both outcomes.
The presidential election this year will see President Donald Trump face off against Joe Biden, Democratic nominee and former vice president. On November 3, voters will cast their ballots to decide whether or not Trump gets another four years.
In this article, INN examines the ways the cannabis space may move forward if Biden gets elected. Click here for our Trump re-election version of this story.
Biden’s mixed messages on the cannabis industry
Biden has stared at the question of cannabis legalization head on. During a town hall with voters in Las Vegas, Nevada, Biden said he isn’t ready to commit to federal legalization since he feels there is a lack of medical-grade research on the plant.
“The truth of the matter is there’s not been nearly enough evidence that has been acquired as to whether or not it is a gateway drug,” Biden said when meeting with voters late last year.
However, he has said he would allow individual states to continue deciding what they want to do with cannabis legalization policy.
“It’s a debate and I want a lot more before I legalize it nationally; I want to make sure we know a lot more about the science behind it,” he said.
Throughout his career Biden has had a long track record of being against drugs and of supporting mass incarceration related to drug offenses.
But the most recent sentiment shared by Biden on cannabis goes against his voting record. In July, Biden aides told the Atlantic the presidential hopeful is up to date on cannabis and its benefits. Still, he isn’t ready to commit until he sees concrete proof in favor of the plant.
“He’s looking for something definitive to assure him that legalizing won’t lead to serious mental or physical problems, in teens or adults,” the insider report indicates.
Positive signs for cannabis in a Biden presidency
Despite all the negative phrasing around the drug, recent changes may offer a hint at where Biden will land on the drug if he wins the White House.
First of all, Biden picked Kamala Harris as his running mate. The California senator has been vocal in her support for a regulated cannabis industry in the US.
Harris is a sponsor of the MORE Act, a bill that would see cannabis descheduled in the eyes of the federal government, removing some of the limitations currently affecting the industry and its players.
Following the Harris selection, Jaret Seiber, analyst with the Cowen Washington Research Group, wrote a note to investors indicating that Harris as vice president could be seen as “modestly positive for cannabis as she is an advocate for legalization.”
However, Seiber told the market she won’t move the needle much given that it’s expected Biden will sign whichever partial cannabis reform proposal is ultimately put in front of him by Congress.
The second beacon of hope cannabis advocates have latched onto are the policy recommendations issued ahead of the Democratic convention in August.
A document designed to offer a snapshot of the policies the party will pursue recommends that cannabis be legalized for medical use and for states to then decide on recreational legalization.
The legal recommendation from the policy package when it comes to next steps with cannabis states:
Marijuana: Decriminalize marijuana use and legalize marijuana for medical purposes at the federal level. Allow states to make their own decisions about legalizing recreational use. Automatically expunge all past marijuana convictions for use and possession. Lift budget rider blocking DC from taxing and regulating legal marijuana and remove marijuana use from the list of deportable offenses. Encourage states to invest tax revenue from legal marijuana industries to repair damage to Black and brown communities hit hardest by incarceration.
These moves would not, however, remove cannabis from the Controlled Substances Act.
Cannabis reform policy under Biden
Matt Carr, chief trends strategist at the Oxford Club, told INN that while a Biden presidency would be beneficial for cannabis, it’s not the biggest issue Biden would aggressively target during his first term.
“It will be somewhere in the mix,” said Carr. “But that is not going to be a first 100 days sort of initiative, there’s going to be other things that they’re definitely going to have to tackle first in terms of just their own agenda and the economy.”
While the Democratic policy program offers a preview of how Biden would approach the cannabis industry in the US, it doesn’t offer a timeline for change.
Alongside the presidential election, those who believe a Democratic government would bring forth cannabis reform on a large scale will have to observe the outcome of the Senate and who ends up controlling it between the two parties.
If Democrats win the Senate, then it is expected that cannabis policies, such as the MORE Act or the SAFE Banking Act, will move through Congress and reach Biden before becoming law.
“A Democrat win, it’s a … huge boost,” Dan Ahrens, managing director and chief operating officer at AdvisorShares and the active manager for the AdvisorShares Pure Cannabis ETF (ARCA:YOLO), told INN.
Stephen Murphy, co-founder and managing director for drug research firm Prohibition Partners, told INN that despite all the potential and hope for the legalization of cannabis in the US, investors and market observers have to be more cautious with their expectations on timing.
“We all need to acknowledge this legislation regulation takes some time. And even the fact that we’re discussing federal legalization now, it may seem a long time for some, but it’s a big step change” he said.
The potential for the US cannabis industry to change under a Biden presidency is very real, but experts seem to agree the momentum for the industry is going to continue with or without him.
Regardless of whether Biden ushers in a new era of federal policy for cannabis, five states will be voting alongside the presidential ballot to determine the legal status of the drug.
Don’t forget to follow us @INN_Cannabis for real-time updates!
Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.