Could Joe Biden’s Presidency Benefit the Cannabis Industry?
After the Vice Presidential debate in early October, many marijuana stocks saw dramatic price spikes. This includes leaders like Aurora Cannabis Inc. (ACB Stock Report), Tilray Inc. (TLRY Stock Report), iAnthus Capital Holdings Inc. (ITHUF Stock Report) and Green Thumb Industries Inc. (GTBIF Stock Report). While this was a good day for pot stock investors, it also signals a lot about which president could benefit the cannabis industry. During the debate, Kamala Harris spoke to the fact that cannabis should be decriminalized. While her reasons are not based on consumers getting more cannabis, they do stand as a proponent for cannabis industry growth. A survey taken recently showed that more than 60% of Americans believe in the legalization of cannabis. Those who oppose cannabis stands at around 30%. With so much of the public wanting marijuana to be legal, we often wonder why it hasn’t occurred.
Why Marijuana Stocks Need Laws to Change
The short answer to the above question has to do with the failed drug war started by Ronald Regan during his presidency. This “war” sought to criminalize cannabis by grouping it with other narcotics. While the intention may have been good, the policies tended to lead to the incarceration of people of color in extremely high rates. In addition, the amount of those criminalized for non-violent cannabis-related offenses was and is extremely high. More recently, the Covid pandemic has proven that the public want to have greater access to cannabis.
During the pandemic, states that have legalized cannabis have decided to make marijuana businesses essential. This means that they are allowed to stay open with some restrictions. This has helped both pure-play pot stocks and ancillary ones like Innovative Industrial Properties Inc. (IIPR Stock Report) to continue seeing gains during this time. In addition, the demand for marijuana has greatly increased in only a short period of time. This demand increase has shown that there needs to be new laws in order for the cannabis industry to succeed.
What a Biden Presidency Could do for the Cannabis Industry
While Biden alone has not been the most staunch supporter of cannabis law, he has helped to push the industry forward. Despite him not directly stating that he is pro-cannabis, he has argued some very interesting points. Both Biden and Harris want to work on decriminalizing marijuana. This would help to get those who have been wrongly committed of non-violent cannabis offenses, out of jail. In addition, the two see that the potential tax revenue for a legal cannabis industry greatly outweighs any potential downsides. Currently, starting or operating a cannabis business is an extremely difficult challenge.
Opening the business in itself is not the difficult part. Rather, operating under the stringent and nonsensical guidelines is what makes it so difficult. In addition, cannabis businesses and marijuana stocks alike, are not able to gain access to financial services. This includes banking, loans and lines of credit. These financial instruments are often a major necessity to any business, let alone a cannabis company. With a Biden presidency, we could see cannabis-related banking laws change for the better. Of course, at the current point in time it is entirely speculation. But, we do know that the pair would be much better for the cannabis industry than Donals Trump has been thus far.
MSO Marijuana Stocks Stand to Gain A Lot
Marijuana stocks that work as multi-state operators stand to gain the most from a Biden presidency. These companies operate as marijuana retailers and are the front end of the cannabis industry. With new legislation, these retail businesses could boom even more than they have in the past six months. In addition, these companies could provide invaluable tax revenue to the U.S. As of this month, the largest 12 MSO pot stocks combined have a value of more than $15 billion. This is quite a substantial feat and represents an extremely large part of the cannabis industry. But, these companies have been unable to reach their full potential. This is due to the banking issues and restrictions that were mentioned prior.
One of the other difficulties that these businesses face comes when they want to move into more states. Because every state is mandated differently, it is very difficult to build out multi-state cannabis businesses. If marijuana is decriminalized in the upcoming election, it would be a game changer for the cannabis industry. Whether or not this happens on November 3rd remains to be seen. But, what we do know is that regardless there is a great deal of positive sentiment surrounding the cannabis industry. With that in mind, all we can do is continue to hope for the best and cast our votes.
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