Politics and Pot: Red, Blue…and Green
When President Franklin Delano Roosevelt was asked at a press conference whether he was a capitalist, a communist, or a socialist, he simply responded: “I am a Christian and a Democrat, that’s all.”
Now that the Democrats are set to control the White House and both chambers of Congress, don’t get hung up on political labels and “isms.” Put aside red and blue and keep your eye on the green, as in marijuana and money.
Marijuana “normalization” continues at the state level. Illinois Gov. J.B. Pritzker in late December announced the forgiveness and expungement of about 500,000 criminal cannabis cases. Pritzker stated that he issued pardons for 9,210 low-level cannabis convictions.
In tandem with the governor, Illinois State Police have wiped clean more than 492,000 non-felony cannabis-related arrest records. The actions by Pritzker and state police were mandated by the Illinois law that legalized the licensed sale of marijuana starting in 2020.
Marijuana advocates are jubilant, as this tweet attests:
Marijuana faces an increasingly favorable climate in Washington, DC as well.
Last month, the U.S. House passed the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act. The landmark MORE legislation would remove cannabis from the federal Controlled Substances Act, expunge past marijuana-related convictions and require certain criminal cases to be resentenced.
With Democrats seizing the gavel in the Senate, passage of MORE is a slam-dunk. President-elect Joe Biden has indicated he would sign the bill. The lifting of the federal prohibition of pot would open the floodgates to new investment.
Marijuana has been resistant to economic damage from COVID-19. As the pandemic hobbles social and economic life in the U.S., consumers have been flocking to marijuana to treat their ailments or to relieve the stress of quarantine.
The pandemic’s boost to the sales and earnings of marijuana companies has resulted in rising stock prices for publicly traded canna-businesses. This upward swing of pot stocks should continue into 2021 and beyond. A wave of corporate consolidation in the marijuana sector also is benefiting investors, as weed companies get into fitter financial shape.
The House vote to approve MORE, together with the Democratic Senate wins in the January 5 Georgia runoffs, have brought our country closer to marijuana legalization than we’ve ever been in history. The current political environment means we could be one Senate vote away from full legalization.
Small wonder, then, that pot stocks have soared. Several brand name marijuana companies even posted double-digit single day gains. The marijuana industry benchmark Horizons Marijuana Life Sciences Index ETF (TO: HMMJ) jumped 8.06% on January 6.
Marijuana investors should keep an eye on other profit catalysts as well. These include:
- Marijuana Freedom and Opportunity Act
Sponsored by Rep. Hakeem Jeffries (D-NY), this bill would federally deschedule marijuana, set aside funding for minority and women-owned cannabis businesses, and provide grants to help people expunge prior marijuana convictions. Senate Minority Leader Chuck Schumer (D-NY) is the lead sponsor of a companion Senate bill.
The bill’s chances of passage in the House and Senate have greatly improved, especially now that Schumer is about to become majority leader.
- Medical Marijuana Research Act
A bipartisan group of House members, led by Rep. Earl Blumenauer (D-OR), introduced the bill in 2019 and it passed in December 2020. It would simplify the registration process for researchers interested in studying cannabis and allow certified scientists to obtain research-grade cannabis from private manufacturers. Scientists have been reporting difficulties in obtaining quality cannabis for study and the development of new drugs.
With marijuana-friendly Democrats poised for total control of the executive and legislative branches in Washington, further upside is in the cards for marijuana equities. Indeed, our investment team just uncovered one neglected pot company that’s set to blast off. Click here for details.
John Persinos is the editorial director of Investing Daily. He also writes the twice-weekly e-letter Marijuana Investing Daily. Send your questions or comments to firstname.lastname@example.org. To subscribe to John’s video channel, follow this link.