Harris Promises Decriminalization
Weed stocks got higher last Thursday, as federal decriminalization inched closer. Democrat VP nominee Kamala Harris pledged for the decriminalization of marijuana. She also promised to wipe off all criminal records related to marijuana offenses.
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During the Vice-Presidential debate with Republican nominee Mike Pence, Harris pledged a turnaround. “[W]e will decriminalize marijuana, and we will expunge the records of those who have been convicted of marijuana,” she said.
Stocks of cannabis companies blazed with the news. The Cannabis Exchange Traded Fund (ETF) THCX went up 7.4% to close at a three-week high of $9.32. Since closing at a four-month low two weeks ago, it’s now up 15.2%. Among THCX’s roster of weed companies, most went up at least 10%. Canopy Growth went higher at 13.52%. And Tilray Inc shot up 18.3%. Local Corona brewer Constellation Brands (STZ) also rose 2.0%. This year, the cannabis ETF lagged behind most indices. It’s down 27.5% year to date, compared to the S&P 500 index which grew 6.7%.
Banks remain hesitant
While the use of marijuana is legal in many states, it remains illegal at the federal level. This is why banks and other finance firms remain hesitant to handle transactions.
Keith Cich, Co-founder of Sunderstorm Inc, says bank acceptance is vital for them. He said: “Access to safe banking will transform the industry, freeing up capital markets for investment and reducing the risk of operating a cannabis business.” Until banks buy-in, regulatory issues will continue to limit cash availability. With the pandemic making operating costs high, profits are falling.
Sam Armenia, VP of producer C21 Investments Inc, hopes that banks get on board soon. He said, “From a business perspective, (decriminalization) will level the playing field by allowing companies to expense normal operational costs instead of being taxed on gross profit.” A positive, national acceptance for marijuana would free up the industry. It can attract more customers who are still wary until now. Companies get greater access to capital markets, as more exchanges will accept them.
Harris Has Clouded History on Marijuana
Senator Harris (D-Ca) supported cannabis decriminalization even before accepting the VP nomination. Before this, she spent years as a California prosecutor opposed to weed legalization. As San Francisco DA, she made 1,900 convictions for marijuana offenses. Her stand pivoted in full in 2018 when she became a junior Senator. She sponsored the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act of 2019. This bill sought to end the federal prohibition of marijuana. Compared to her running mate Joe Biden, she is more experienced in the subject matter. Right now, Harris is the one that bridges marijuana acceptance and the rest of the Dems.
Biden was once a vocal opponent of legalization. But in the earlier days of his campaign, he agreed with the majority of Democrats. Biden now supports decriminalization, moderate rescheduling, and medical cannabis legalization. He is also in favor of allowing states to set their own laws and remove records.
Change of Hearts
In fairness to the GOP, they did not come out fully against marijuana. President Trump himself has changed positions over the years. 30 years ago, he pushed for legalizing all drugs. He said at the time: “We’re losing badly in the war on drugs. You have to legalize drugs to win that war. You have to take the profit away from these drug czars. What I’d like to do maybe by bringing it up is cause enough controversy that you get into a dialogue on the issue of drugs so people will start to realize that this is the only answer; there is no other answer.” 25 years later, during the Conservative Political Action Conference, he said that he feels strongly that marijuana legalization is “bad.”
Yet, Trump does support states’ rights to set their own marijuana laws. He wants the burden going to the head of state, saying, “If they vote for it, they vote for it.” He also cleared that for medical marijuana, he supports that “100 percent.”
Watch this as CNBC reports that marijuana stocks get high as VP candidate Sen Kamala Harris says Biden administration would decriminalize pot if they win:
Weed is not a hot topic as it was a few years back. Now, usage is not the issue but its effects. Criminal records, business opportunities, medical use. These are the new talking points. And a principled stand on this issue can attract a lot of voters. Do you support the decriminalization of marijuana? Let us know what you think by leaving your comments below.