Is The GOP Going to Pot?
Don’t be discouraged by the under-performance year-to-date of the marijuana sector. Many beaten-down pot stocks are inherently strong and poised for a rebound.
The lifting of restrictions against cannabis remains a social, political and economic revolution and as such, the “green rush” still represents the investment opportunity of a lifetime.
Marijuana legalization has achieved such enormous strides, many people are starting to take access to weed for granted. The historical context of the War on Drugs is being forgotten.
For a quick refresher course in marijuana history, I bring you Henry J. Anslinger. Before President Richard Nixon officially launched his War on Drugs in 1971, there was the legacy of Mr. Anslinger.
Anslinger was the pioneer of the drug war. He served as the first commissioner of the Federal Bureau of Narcotics during the presidencies of Hoover, Roosevelt, Truman, Eisenhower, and Kennedy. The bureau was the precursor of the modern-day Drug Enforcement Administration.
Anslinger played the key role in the introduction and passage of the Marijuana Tax Act of 1937, which outlawed possessing or selling pot.
Let’s not sugar coat it: Anslinger was a racist hate-monger. He once told the nation:
“There are 100,000 total marijuana smokers in the U.S., and most are Negroes, Hispanics, Filipinos and entertainers. Their Satanic music, jazz and swing, result from marijuana usage. This marijuana causes white women to seek sexual relations with Negroes, entertainers and any others.”
Nixon’s failed War on Drugs, which is currently being dismantled, also was animated by racism and reactionary resentment. So, when conservative Republican members of Congress introduce a bill to federally legalize marijuana, I still find it a big deal. You should, too.
One bill in particular is the Common Sense Cannabis Reform for Veterans, Small Businesses, and Medical Professionals Act. Introduced in May 2021 by two GOP members of the U.S. House of Representatives, the bill has been gaining traction in the GOP-led House in the 118th Congress.
The proposed bill would lift the federal ban on marijuana. Other bills to accomplish the same goal have been sitting in Congress for several years, but this proposed legislation goes much further. In fact, this bill is unprecedented in scope.
In addition to removing the federal ban, the bill seeks to protect banks that service state-legal cannabis businesses. It also wants to ensure that military veterans are permitted to use marijuana in compliance with state laws.
The bill was originally sponsored by Reps. David Joyce (R-OH) and Don Young (R-AK). Young died in March 2022.
According to a recent Pew Research Center survey, a huge majority of U.S. adults (88%) say either that marijuana should be legal for medical and recreational use by adults (59%) or it should be legal for medical use only (30%). A small minority (10%) say marijuana use should not be legal.
Opinions vary according to ideology. About 37% of conservative Republicans say marijuana should be legal for medical and recreational use, compared with 60% of moderate and liberal Republicans.
Nearly two-thirds of conservative and moderate Democrats (63%) say marijuana should be legal for medical and recreational use. An overwhelming majority of liberal Democrats (84%) say the same.
It’s significant that the sponsors and main drivers of the bill are conservative Republicans. The Democratic party has long embraced marijuana legal reform, usually against the opposition of the GOP. The bill reflects the changing political dynamic for weed and is yet another signal that the federal ban on pot is doomed.
One toke over the (political) line…
Despite present-day culture wars, conservatives are not only shifting toward legalization, they’re also more frequently using marijuana.
A new report released by the research group New Frontier Data assesses the latest consumer preferences and behaviors related to marijuana.
From a political standpoint, the report found that liberals are more commonly found to imbibe marijuana than conservatives, 36% to 29% respectively (see the following chart).
Source: New Frontier Data
What’s interesting to me is that use by conservatives has gotten as high as 29%. Pot has long been a political football in the blue state/red state culture wars. But the right side of the political spectrum is warming to marijuana.
Into the 21st century…
The main pillar of the Common Sense Cannabis Reform for Veterans, Small Businesses, and Medical Professionals Act is to federally deschedule cannabis, similar to previous bipartisan proposals. However, this bill goes several steps further by providing additional legal protections, as well as mandates for federal studies into medical cannabis.
“With more than 40 states taking action on this issue, it’s past time for Congress to recognize that continued cannabis prohibition is neither tenable nor the will of the American electorate,” Joyce said of the bill.
Under the proposal, marijuana would be removed from the Controlled Substances Act. Marijuana could be imported and exported across states, although transporting marijuana to states where such activity is illegal would remain federally banned.
The task of developing regulations for marijuana would fall to the Food and Drug Administration and the Alcohol and Tobacco Tax and Trade Bureau. Those regulations would have to be “similar to federal rules regulating alcohol,” the bill stipulates.
Another provision of the proposed legislation stipulates that financial services institutions with state-legal marijuana businesses as customers can’t be penalized by federal regulators.
In addition, the legislation allows military veterans to use, possess and transport medical cannabis in compliance with state law. It also allows doctors to discuss medical marijuana use with veterans in states where pot is legal and they can “recommend, complete forms for, or register veterans for participating in a treatment program involving medical marijuana.”
Marijuana advocates have placed particular energy in easing the restrictions that military veterans face in trying to get access to medical marijuana. Pending in the House and Senate is the Veterans Medical Marijuana Safe Harbor Act, a bill that would make it legal under federal law for military veterans to use, possess, or transport medical marijuana in state-legal systems.
Veterans suffering physical or emotional distress are increasingly turning to medical cannabis as an effective alternative to opioids and other conventional medications. In addition to treating body wounds, marijuana is effective in treating depression. Veterans represent 7% of the American population, yet account for 20% of the national suicide rate.
Indeed, as the medical benefits of marijuana become all too clear, an increasing number of states are legalizing cannabis.
Cannabis investments are a must for your portfolio, but the trick is finding the right pot stocks. Some cannabis stocks are stellar investments. Many others are not. You need to conduct due diligence. The good news is, I’ve done the homework for you.
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John Persinos is the chief investment strategist of Marijuana Profit Alert.