The cannabis industry was the clear winner of the 2020 election.
In several states, the question of legalization of recreational marijuana was posed and it passed with flying colors in Arizona, Montana, New Jersey and South Dakota, with medical use being okayed in Mississippi and South Dakota.
This clear mandate is an indicator of the normalization of cannabis use throughout the United States. And with a state like New Jersey getting on board, there is a good chance that New York will follow, because the will of the people will push legislators in New York to consider it.
There are only 14 states in the country that have not legalized marijuana consumption for either medical or recreational use. That’s a clear indication that the industry is growing and becoming more of a reality in every part of the country.
Middle America’s view of cannabis
Cannabis is being normalized in everyday society at an unprecedented level. This election could be the point where recreational use of marijuana becomes like alcohol and cigarettes: just a normal part of society. Unlike those other two widely available and legal options, more and more people are seeing the benefits of cannabis as an effective way to manage stress and anxiety, help people relax and sleep and, in general, contribute to their wellbeing.
Part of the reason this is becoming more mainstream is that there are new ways to consume cannabis that don’t involve inhaling. Everything from edibles to transdermal solutions and nano-technology for transference are becoming more widely available. While smoking is becoming a taboo in much of society due to the effects on lung health, the options available for cannabis consumption are helping to push its normalization.
As these options grow and consumers ask for them, from state to state, the federal government will eventually have to take notice. Just looking at the taxation benefits for state coffers might be an incentive, but time will tell on that.
Is cannabis a partisan topic?
Different states view cannabis differently, and that perspective does tend to run along party lines. Republicans are more cautious about legalization in general.
That said, though President Joe Biden has in the past opposed the federal legalization of marijuana, there are signals that Biden and Vice President Kamala Harris might look more favorably on the idea than ever before. Of course, it is a little bit like opening the barn door wider, when most of the horses have already left, but better late to the party than never.
Cannabis and the Biden-Harris White House
Biden’s tone changed somewhat during his presidential campaign, but it’s also clear that the new administration is going to be pretty busy in the first 100 days of their term and beyond, dealing with issues that quite naturally need to take precedence over pot: COVID-19 and the economy, for example.
Will Biden and Harris spend any political capital in their early days in office dealing with the legalization of recreational marijuana at a federal level? Probably not, but their signals of being open to it are encouraging for the industry.
Ultimately, it’s up to Congress to legalize of cannabis at the federal level. Even the Supreme Court has elected not to hear cases involving legalization, instead leaving it in the lower courts.
Whatever happens federally, the states would still need to agree on issues such as possession, transportation and taxation for the industry to continue to evolve and grow.
However, with public support for the legalization of marijuana growing, cannabis companies will eventually be a part of many mainstream investment portfolios. For the time being, investment in the industry should still be viewed with a long-term lens, as there is a healthy market that is growing but could ultimately face some short-term regulatory hurdles, depending on where companies operate.
The timing of investment, as with any company, depends on the stock performance and overall corporate standing of each company. Investors need to evaluate their own interests and objectives, as well as their risk tolerance, before moving forward with any investment and the same is true of investing in the cannabis industry.
It’s entirely likely that bigger players will start to come to the table, expanding by acquiring smaller operations and businesses and creating a template for future entrants into the industry. Ultimately, the continuing growth of this industry seems to clearly show a positive direction for the foreseeable future.