The federal government has been, for a significant period of time, a stark opponent to marijuana, any businesses working with cannabis, and the budding cannabis industry as a whole. A near-century long prohibition will do that to a country. The negative feelings radiating from the feds, more specifically from the US Department of Justice, can be directly connected to the perspective and opinions of the US Attorney General. When AG Jeff Sessions took office back in 2017, he made it abundantly clear from the get go that he was no fan of the devil’s lettuce. Despite the fact that the US cannabis market is worth about $8.5 billion, Attorney General Sessions showed no signs during his time in office of budging on bud.
Marijuana industry executives came to despise Sessions due to many policy decisions he put in place to rescind Obama-era legislation that otherwise kept its nose out of the cannabis industry. In January, Attorney General Jeff Sessions rescinded policies that “shielded legalized marijuana from federal intervention” in an officially released memo.
“The previous issuance of guidance undermines the rule of law and the ability of our local, state, tribal, and federal law enforcement partners to carry out this mission.”
–US Attorney General Jeff Sessions
Amidst this immense hate from the cannabis industry and poor performance reviews on a federal level, Sessions announced on Wednesday that he was resigning from his post, effective immediately. In response to his departure, stock prices for US cannabis companies soared. Alternative Harvest Marijuana ETF (MJ), a Nasdaq-based fund with various companies in its holdings, shot up 5.6% within an hour of Session’s official announcement, trading at $36.97 per share.
According to CNBC reports, Tilray (TLRY), a key player in the Canadian cannabis market, climbed a miraculous 30%, trading at $122.05 per share. Suffice to say, big canna responded very nicely to Jeff Sessions’ resignation. As for Sessions’ replacement, President Trump played the hits and took to twitter (TWTR) to share the news:
“We are pleased to announce that Matthew G. Whitaker, Chief of Staff to Attorney General Jeff Sessions at the Department of Justice, will become our new Acting Attorney General of the United States. He will serve our country well…We thank Attorney General Jeff Sessions for his service, and wish him well! A permanent replacement will be nominated at a later date.”
–President Donald Trump on Twitter
With Sessions gone, cannabis industry leaders and investors are immensely concerned with the interim Attorney General’s stance toward cannabis reform, as well as states’ rights to legalize and regulate cannabis. Given that the announcement occurred less than twenty-four hours ago, not much is currently known about Matthew G. Whitaker in general, let alone his feelings related to drug policy.
Whitaker briefly served as US Attorney General for the Southern District of Iowa from 2004 to 2009 during the Bush administration, but promptly resigned when former President Barack Obama took office. In his official resignation letter to Obama, he briefly touched on his sentiments regarding marijuana:
“I am firmly committed to protecting our citizens from terrorist attacks, reducing gang and gun violence, protecting our children from predators, reducing the availability of meth, cocaine, and marijuana in our communities, and protecting the taxpayers through our civil division.”
–Interim US Attorney General Matthew G. Whitaker
Basing speculation on Whitaker’s resignation letter to former President Barack Obama, we can infer that, though no one will ever compete with Jeff Sessions’ staunch opposition to cannabis, he is not necessarily a progressive on the subject. Using language like keeping marijuana out of communities stems from an archaic belief that cannabis is a “dangerous drug”, and these drugs are usually sold by “dangerous characters.” This hasn’t been the case for quite some time now, with companies like MedMen (OTC: MMNFF) selling marijuana products in a retail experience akin to shopping at the Apple (AAPL) store.
Experts in the cannabis sector are anticipating that the federal government, and hopefully the US Justice Department, led by Whitaker, will recognize the economic benefits of marijuana. If anything, this notion can be confirmed by the sheer fact that when a prominent US government official who strongly opposed marijuana resigned, the market reacted positively.
All things considered, market trends cannot be predicted nor is there a magic wand to be waved, but we shouldn’t turn a blind eye to the market’s reaction to Sessions’ resignation.