A Political Impasse is Stalling US Cannabis Reform

Current political landscape prevents straightforward policy move

John Kagia, chief knowledge officer at New Frontier Data, told INN he’s not surprised to see the news-driven cannabis market pick up chatter based on the MORE Act vote.

However, he knows that despite the news, the context of the vote and the road ahead are more important.

“It's important not to presume that just because (the MORE Act was) able to clear the House, that it's going to get an easy run into the Senate,” Kagia said.

New Frontier Data is a cannabis-focused research and analytics firm that regularly publishes market reports.

The executive explained he views the Senate as a minefield for the bill. “In a much narrower and closely contested Senate, the ability to get the bills even tabled, let alone approved, tends to be a much higher hill to climb,” he said.

Kacey Morrissey, senior director of industry analytics with New Frontier Data, told INN that US politicians can see the projections for what a healthy, thriving cannabis industry in the country could bring.

She noted that for most experts, cannabis reform in the US is an inevitability. How the market gets there, however, is a different question to answer.

“Now I think we (are) just kind of splitting hairs, deciding who's actually going to benefit the most from this and how,” Morrissey said.

What to expect ahead of Senate elections later this year

Kagia said he thinks it is next to impossible for any cannabis reform to take place before the midterm elections.

These elections will determine key political outcomes later this year, which makes them a critical review moment in terms of voter satisfaction with the current administration and its policies.

Early projections show there is a heated battle brewing in the Senate for winning a leading majority.

As of April 6, predictor RacetotheWH shows Republicans have a 48.89 chance of gaining a majority in the elections this year. There will be 34 Senate seats up for election in 2022.

“There is a growing recognition and concession that something needs to be done to at least address some of the most pressing issues,” Kagia said.

When asked what his expectation would be for cannabis policy in a GOP-led Senate, Kagia said after midterms there is a higher chance of piecemeal reform even if Republicans control the upper chamber of Congress.

“We do think there's actually perhaps a higher probability that following the midterms, even assuming that Republicans take control of one or both chambers of Congress, that you might be able to see something like banking get through,” Kagia said.

Banking reform by way of the SAFE Banking Act would be a key victory for the business of cannabis in the US and its current players. It is a measure that is long awaited in the investment world.

Investor takeaway

Despite the lack of progress on federal cannabis policy, Morrisey emphasized that the growth in the US storyline for the drug is already happening at the state level.

“I think the big numbers coming out over the next two years are going to drive a lot of new things on the ballot,” Morrisey said to INN. “We're going to see the northeast and the south kind of break open ⁠— the northeast for recreational use and the south for medical.”