The Politics of “Big Weed”
You’ve heard of Big Oil, Big Steel, Big Pharma, and so on?
Welcome to Big Weed.
Marijuana has evolved into a multi-billion-dollar business. As such, the marijuana industry also has spawned an army of influence peddlers, with politicians walking through the “revolving door” when they leave office to lobby for cannabusiness.
Many indicators reveal when a fledgling, disruptive industry has finally achieved big league status. When it comes to marijuana, I point to the 180-degree turn of John Boehner.
Former U.S. House Speaker Boehner left Congress in 2015. In recent years, he has become a cheerleader for the legalization and commercialization of pot, a substance that he once demonized.
Boehner, age 70, served nearly five years as speaker. A conservative Republican from Ohio, he isn’t exactly a hippie. The perpetually suntanned Boehner is famous for chain-smoking Camel Ultra Lights, avidly playing golf, and in the after-hours swirling Merlot wine. The press has often referred to him as the Dean Martin of DC.
In 2011, Boehner told a constituent he was “unalterably opposed” to legalization. But in 2018, he joined the board of advisers of Acreage Holdings (OTC: ACRZF), a small cannabis corporation based in New York City. These days, Boehner frequently holds forth at conferences on the wisdom of investing in cannabis.
Yep, Mary Jane has gone mainstream.
Let’s take a look at the latest legal and lobbying efforts in the marijuana industry, all of which directly affect your investment choices in this booming sector.
Marijuana remains illegal on the federal level but that hasn’t stopped a wide variety of regulatory, political and academic activity to occur beyond the purview of states.
Medical devices catch a break…
The Food and Drug Administration is moving to exempt marijuana testing devices from strict premarket notification rules, provided these devices are restricted to certain purposes.
Many medical device manufacturers fall under the jurisdiction of the FDA’s premarket notification requirements, which involve assurances that the products are safe and effective.
But under the new guidelines, some cannabinoid testing instruments are exempt from that requirement, meaning they can get to market faster.
Recently published in the Federal Register, the FDA notice states:
“FDA’s action decreases regulatory burden on the medical device industry and eliminates private costs and expenditures required to comply with certain Federal regulations.”
However, a device does not qualify for the new exemption if it is “intended for any use other than employment or insurance testing or is intended for Federal drug testing programs.”
Passage of SAFE gets less safe…
The Secure and Fair Enforcement (SAFE) Banking Act is encountering unexpectedly stiff opposition in the U.S. Senate. The chairman of the Banking Committee recently said he’s concerned that giving the marijuana industry greater access to banking will make it easier for drug cartels to launder money.
Last September, the U.S. House passed the SAFE Banking Act, which is designed to protect banks that accept marijuana business clients from being penalized by federal regulators. The banking industry has been reluctant to lend money to marijuana companies.
The SAFE Banking Act now requires the approval of the U.S. Senate and President Trump to become law. Despite growing opposition from certain Senate Republicans, SAFE still faces good chances of eventually becoming law.
Sex, marijuana and babies…
When it comes to cannabis and sex, it seems that scientific research has confirmed anecdotal experience.
A new university study found that legalizing medical cannabis prompts people to have more sex, but it also leads to less use of contraceptives and greater birth rates.
Researchers from the University of Connecticut and Georgia State University concluded:
“We find that passage of [medical marijuana laws] result in both increased engagement in sexual activity and decreases in contraceptive use conditional on being sexually active. Jointly, both mechanisms suggest that behavioral responses may be due to increased attention to the immediate hedonic effects of sexual contact, increased willingness to engage in sex, as well as delayed discounting and ignoring the future costs associated with sex.”
Social conservatives who seek to turn back the tide of marijuana legalization are seizing on the university study as evidence that lawmakers should more carefully weigh the health, societal and behavioral ramifications of legalizing pot.
In the meantime, marijuana legalization could create an unexpected consequence: a new Baby Boom.
The Florida House of Representatives and Senate, together with anti-marijuana groups, filed briefs with the state Supreme Court arguing that a proposed marijuana legalization measure should not be allowed to appear on the 2020 ballot. The legal backlash in Florida could resonate in other states, as prohibitionists across the country push back against Big Weed.
Medical use of marijuana in Florida was legalized in 2016 by way of a constitutional amendment. However, cannabis is illegal in the state for recreational use. Possession of up to 20 grams is a misdemeanor offense, punishable by up to a year in prison, a fine of up to $1,000, and the suspension of one’s driver’s license.
As the following chart shows, medical marijuana has rapidly grown into a huge market in Florida:
Illinois regulators released applications for marijuana infuser, transporter and craft grower licenses.
Indiana’s Senate GOP minority leader said his party will push for marijuana decriminalization this session.
Maine Gov. Janet Mills (D) issued a posthumous pardon to an attorney arrested for possessing marijuana while fighting for tribal land rights in 1968. Increasing numbers of state officials are expunging or pardoning marijuana-related convictions.
The head of New Jersey’s Election Law Enforcement Commission said that the state’s marijuana legalization referendum could lead to an uptick in lobbying and major campaign finance expenditures in 2020.
North Carolina law enforcement agencies are calling on lawmakers to pass legislation banning smokable hemp. Hemp is now legal in the U.S., thanks to passage of the 2018 Farm Bill.
Hemp fiber and seeds are primarily used for industrial and medical purposes, but the plant does contain low levels of THC, the chemical compound that produces the “high” in the cannabis plant family.
South Dakota activists submitted more than enough signatures to put a marijuana legalization measure on the 2020 ballot. A separate medical cannabis initiative previously qualified as well.
This development is significant because South Dakota is considered a socially conservative “red state.” Passage of the pot ballot measures in South Dakota could influence other states in the American heartland.
The Vermont House Committee on Government Operations recently debated legislation to legalize marijuana sales. Separately, the House Committee on Natural Resources, Fish, and Wildlife considered the environmental impact of cannabis regulation.
John Persinos is the editor-in-chief of Marijuana Investing Daily.