The cannabis industry is in the midst of a boom—one that has little to do with the drug itself. In the last year, Canadian weed stocks have surged over 500 percent, and U.S. stocks are off to a similarly vigorous start. One reason for this is that the plant has become a veritable cash cow for investors.
At the end of the day, the leaders of the cannabis industry know that they must find a way to bring cannabis into the mainstream. If they fail, they will not only fail to make a healthy living, but could also see their whole industry taken over by the forces of the law.
In the United States few states have passed laws to legalize, tax, and regulate cannabis, but in other countries like Canada, Uruguay, and Israel lawmakers have approved and passed laws, which means investors can expect to see a lot of cannabis-related businesses expanding into the global market. Reforms in these countries have helped reduce opioid prescriptions in their country, put them on the map when it comes to the potential of medical cannabis, and allowed them to educate their customers about the benefits of medical cannabis.. Read more about 2021 more act and let us know what you think.
Canadian cannabis operators like Canopy Growth (NASDAQ:CGC) are eager to enter the U.S. cannabis market. US cannabis operators like Curaleaf (OTC:CURLF) want to be able to list on major US exchanges. Neither group will get what they want until there is serious cannabis reform at the federal level in the United States.
In this Motley Fool Live video, released on 11. Olivia Zitkus, health care and cannabis editor, and Keith Speights, contributor to the Motley Fool, discuss why investors can be cautiously optimistic about the prospect of such reform.
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Olivia Zitkus: Let’s start with general industry news. I wonder if there’s anything you’ve noticed in the last few weeks. I know that Democrat Jerry Nadler was elected on the 28th. May introduced the MORE Act – Marijuana Opportunity Reinvestment and Relief Act, which would eliminate criminal penalties, expunge criminal records, and establish community recovery programs while legalizing marijuana at the federal level.
Did you notice anything? Do you have any thoughts on the MORE Act and what may or may not happen in Congress?
Keith Spates: Well, first of all, Olivia, there’s a lot of uncertainty when it comes to the U.S. Congress. (laughter) I think a lot of investors are probably, rightly, more optimistic about the possibility of major cannabis reform than they have been in the past. I think the optimism is justified to some extent, as the odds are higher than in the past.
But it can still happen, and there’s no guarantee that this MORE project or any other major cannabis reform project will make it. The problem, of course, is that it is relatively easy to get it through Parliament. As we have already seen, the House of Representatives has even passed important cannabis legislation.
In the Senate, it gets more complicated because the Senate is still 50/50, split evenly between Democrats and Republicans, so the deciding vote goes to Vice President Harris. The Democrats have very little control. Democrats are generally more supportive of cannabis reform. The real question is what happens if one of these bills reaches the Senate.
There is always the possibility that the Republicans will filibuster and not allow anything to be voted on. This is a real opportunity.
I think there’s at least a chance the GOP won’t try to reform cannabis. The reason I say that is that most states in the United States have now legalized cannabis in some form, and these senators represent those states, so I think there’s at least a small chance that we won’t get a filibuster. If reasonable legislation gets through the Senate, and I think MORE legislation is reasonable, I think you can get votes for it. We’ll see.
Seat kiss: I think that’s a good way to look at it. I think that’s something you just have to wait for. You can’t predict what will happen. Deze specifieke wetgeving is, geloof ik, vorig jaar in de Senaat ingediend en mislukt. The bill fell there.
But a second bill is expected later this year. This measure has already been supported by Senate Majority Leader Chuck Schumer, Cory Booker – names many people know, and they may not think this additional legislation is enough.
Even other Democrats say he’s doing enough, and Republicans ask if he’s not doing too much. But yes, you’re absolutely right, there are a lot of red states, call them red states, where there are representatives right now who think that they too could benefit from something like the MORE Act.
Sparta: That’s right. Especially medicinal cannabis, which is actually very popular among Americans, even more popular than recreational marijuana.
Seat kiss: Yes.
Sparta: I don’t know if there will be enough opposition, even among Republican senators, to something too controversial. I don’t think some of the cannabis reforms coming through the House are too controversial, so we’ll see. I think there are reasons for cautious optimism, but don’t count on anything happening this year.
Seat kiss: Absolutely. Okay, noted. Yeah, it’s pretty cool, look, Alabama just legalized medical marijuana, I guess that’s it, right?
Sparta: That’s right.
Seat kiss: Things are looking good in North Carolina, too. There are some rumors, at least as far as I know.
Sparta: Olivia, I’ve always compared what’s happening in the cannabis market to what’s happened to state lotteries in recent decades. It started with one or two states having a state lottery, then some states realized it: Our neighbors are making money off it, so we started thinking: And maybe we can do it, and one or two other states have done it.
Then it’s like a case of dominoes. More and more states have done so. I think we’re seeing the same thing, especially with medical cannabis, because many states have legalized medical cannabis, but also with recreational cannabis.
Seat kiss: Absolutely. I find myself at the moment in Pennsylvania, where we are – in some ways – sandwiched between New York and New Jersey, both of which currently distribute cannabis for regulatory purposes. The loss of tax revenue from cannabis is perhaps one of the most important considerations, if not the most important, especially in the wake of the coronavirus pandemic, when it comes to whether or not recreational cannabis should be legalized.
Sparta: If there’s one thing states want, it’s more money.
Citcus: Yes, 100%. I love it. These are our conclusions for the industry. Follow the money. That’s the basis of your industry for today, idiots.
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