Trump on Marijuana Stocks
In the past two weeks, President Donald Trump squabbled with G7 allies and traversed half the globe to negotiate with the “Little Rocket Man” of North Korea. But, believe it or not, we’re most interested in something he said before any of that happened.
Trump was waiting to board “Marine One,” the presidential helicopter, that would carry him to Andrews Air Force Base when a reporter asked him about a bill put forth by Senator Cory Gardner (R-Colorado).
The bill would prevent the Department of Justice—or more specifically, Attorney General Jeff Sessions—from obstructing the sale of recreational marijuana in states like California and (you guessed it!) Colorado, where voters have elected to decriminalize cannabis-related products.
“I support Sen. Gardner,” said Trump when asked about the bill. “I know exactly what he’s doing. We’re looking at it. But I probably will end up supporting that, yes.” (Source: “Trump says he is likely to support ending blanket federal ban on marijuana,” Los Angeles Times, June 8, 2018.)
It was an offhand remark, something that the president said without a great deal of thought. Yet, it moved markets. What’s more interesting, however, is that his words contradicted those of the Department of Justice .
But maybe the contradiction shouldn’t surprise us. Trump has openly criticized Sessions in the past, calling him “weak” and “disgraceful.” Trump even voiced regret for having hired him.
I think the animosity between them is significant. It means that, in a standoff between weed-friendly states and the Department of Justice, Trump might side with the states.
This translates into good news for Senator Gardner’s bill. Why, you ask? Well, because, whether you’re a fan of the president, there’s no denying that his support will likely drag fence-sitting Republicans into the “Yes” camp. They respond to strength.
So, what started as a passing remark might help Congress cobble together real-life legislation.
Senator Gardner’s Marijuana Bill
Senator Gardner’s bill is a bipartisan effort with some big names attached to it, including Senator Elizabeth Warren (D-Massachusetts).
If passed, the bill would transform the legal framework for cannabis businesses in the United States, freeing them up to pursue bank financing or listing on U.S. stock exchanges.
“If you are in the marijuana business…you can’t get a bank loan or set up a bank account because of concern over the conflict between state and federal law,” said Gardner at a news conference to unveil the new bill. (Source: Ibid.)
“We need to fix this. It is time we take this industry out of the shadows, bring these dollars out of the shadows.”
Although the Gardner-Warren bill faces a reluctant Congress, tentative support from President Trump could push the conversation forward. After all, it was President Trump who stopped the Department of Justice from cracking down on weed companies in April 2018.
He has taken action in the past, and that may convince GOP lawmakers to get on the right side of history before the ink is dry.
What could also help is reframing the issue as one of “states’ rights”—something that Republicans in Congress have long supported.
“This is a chance for us to express that federalism works,” said Gardner. We have “to take an idea that states have led with and provide a solution that allows them to continue to lead.”
What’s Next for Marijuana-Legalized States?
By 2025, the U.S. marijuana market’s expected worth could reach $24.1 billion. (Source: “Current and projected legal cannabis market value in the United States in 2016 and 2025 (in billion U.S. dollars),” Statista, last accessed June 12, 2018.)
This could include a 474% increase in sales of legal recreational pot, plus a nearly threefold increase in medical marijuana sales, the bulk of which will probably come from California, a state so populous it has the world’s fifth-largest economy (only the U.S. as a whole, China, Japan, and Germany are bigger).
However, it’s important to remember that these forecasts are conservative. They are built around today’s marketplace, factoring in only states that have already legalized marijuana.
What they fail to recognize is that legalization is contagious. It spreads from state to state as lawmakers realize that marijuana taxes are a gold mine of untapped revenue.
Furthermore, there are 20 states where medical marijuana is legal but recreational marijuana is not. These states are halfway there. Over the next few years, I expect more of them to complete the journey to full-scale legalization.
To Read The Rest Of This Article By Gaurav S. Iyer, IFC on Profit Confidential
Published: June 14, 2018
Founder & Interim Editor of L.A. Cannabis News