Pot Legalization: The Writing Is On The Wall
Congress is currently embroiled in bitter partisan warfare over the debt ceiling, the infrastructure bill, the Afghanistan withdrawal, abortion, the January 6 riot, and an array of other contentious issues. I’ve been writing about politics for more than 40 years and I’ve never witnessed such overt hostility between Democrats and Republicans.
And yet, lawmakers on Capitol Hill this week found the time, and the political will, to tackle a bipartisan bill to federally legalize marijuana.
For decades, marijuana was a political football in America’s culture wars. Now, ironically, weed is one of the few issues on which a sharply divided electorate can join hands. Who woulda thunk it?
On Wednesday, the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act took a significant procedural step forward. The MORE Act was taken up by the House Judiciary Committee, which is chaired by the bill’s sponsor, Rep. Jerrold Nadler (D-NY). As of this writing, Nadler is presiding over a full Committee markup of the bill.
This milestone comes one week after the House voted in favor of a Pentagon budget appropriations bill that includes an amendment that would shield banks that service state-legal marijuana businesses from being penalized by federal regulators.
Among other things, the MORE Act would federally deschedule cannabis (i.e., lift the federal criminal ban) and expunge the records of those with previous marijuana convictions.
This tweet posted by Rep. Frank Pallone (D-NJ) is indicative of the consensus in Congress about marijuana and the MORE Act, especially among Democrats:
The MORE Act is comprehensive and seeks to accomplish the following:
- Require the Bureau of Labor Statistics to regularly publish demographic data on cannabis business owners and employees;
- Establish a trust fund to support various programs and services for individuals and businesses in communities harmed by the 50-year-long War on Drugs;
- Impose a 5% tax on cannabis products and require revenues to be deposited into the trust fund;
- Make Small Business Administration loans and services available to cannabis-related businesses or service providers;
- Prohibit the denial of federal public benefits to a person on the basis of certain cannabis-related conduct or convictions;
- Prohibit the denial of benefits and protections under immigration laws on the basis of a cannabis-related event (e.g., conduct or a conviction);
- Establish a process to expunge convictions and conduct sentencing review hearings related to federal cannabis offenses; and
- Direct the Government Accountability Office to study the societal impact of cannabis legalization.
Marijuana legalization seems to have regained its mojo on Capitol Hill, generating a tailwind for marijuana equities.
The inevitability of MORE…
MORE’s eventual enactment into law is a matter of when, not it. When it does become the law of the land, pot stocks are likely to surge.
Consider this: a decade ago, zero states allowed marijuana for recreational use. Now, 18 states and Washington, DC, have legalized recreational marijuana, whereas 36 states and four territories allow for the medical use of cannabis products.
In a nation sharply divided into red and blue states, the legalization of marijuana enjoys bipartisan support. Two-thirds of Americans currently favor legalization (83% of Democrats, 72% of Independents, and 48% of Republicans). The fact that nearly half of Republicans favor legalizing weed is remarkable, considering the socially conservative nature of the GOP these days.
In the 2020 general election, marijuana legalization appeared on the ballot in four deep red states: Alaska, Montana, North Dakota, and South Dakota. Legalization won in three of them, losing only in North Dakota.
The mainstreaming of marijuana can’t be stopped, but it won’t be a linear process. There will be ups and downs along the way. Every portfolio should contain marijuana stocks. However, investors need to tread wisely.
Avoid risky penny stocks and fly-by-night players. Booming industries tend to attract fraudsters and inept businesspeople. Marijuana is no exception. What’s more, the entire marijuana industry tends to get whipsawed by political headlines.
After painstaking research, we’ve pinpointed stable cannabis investments with the greatest profit potential. Click here for our report on the best pot stocks.
John Persinos is the editor-in-chief of Marijuana Investing Daily.