Cannabis stocks rallied anew on Thursday, with the Cannabis ETF on track for its biggest weekly gain since March of 2020, as hopes the Democrat’s victory in the Georgia Senate run-off will spur the reforms needed to allow the legal sector to flourish.
“The Democratic Party will now effectively control the House, the Senate and the White House, which could pave the way for a number of pro-cannabis initiatives that have been bottlenecked in the House of Representatives to begin working their way through applicable political/legislative channels,” Canaccord analysts wrote in a note.
The legislation most likely to find its way back to the House is the MORE Act, or Marijuana Opportunity, Reinvestment and Expungement Act, which seeks to decriminalize cannabis at the federal level. The House voted in favor of the bill in December, but it was not expected to find favor in the then-Republican-controlled Senate.
The MORE Act also seeks to bolster social justice reforms and expunge criminal convictions for nonviolent cannabis-related offenses, while offering the states the chance to govern their own policies.
“Although the Act will need to be reintroduced, as soon-to-be Vice President Kamala Harris originally co-introduced this bill into the House, we believe the prospect of it now moving to the Senate and eventually being brought into law is significantly improved due to the results of Wednesday’s Senate elections,” said the Canaccord analysts.
There are also increased hopes for passage of the SAFE Banking Act—or Secure and Fair Enforcement Act, a bill that sought to allow cannabis companies access the federally insured banking system and capital markets without the risk of federal enforcement action.
That bill was passed in the House back in September of 2019, but failed to gain traction in the Senate.
Then there is the Strengthening the Tenth Amendment Through Entrusting States Act, or States Act, a bill that seeks protections for businesses and individuals in states that have legalized who comply with state laws.
” The value creation potential in US cannabis is a generational wealth opportunity,” said Jefferies analyst Owen Bennett in a note.
There was more good news for the sector when New York Gov. Andrew Cuomo unveiled his latest plan to legalize cannabis in the Empire State, an effort that has been attempted every year for the last several, only to be thwarted by a failure for lawmakers to agree on social equity measures.
Cuomo said he is aiming to create a system to oversee and regulate cannabis as part of his 2021 State of the State. The governor is proposing to create an Office of Cannabis Management that would be tasked with managing a new adult-use program, alongside existing medical and cannabinoid hemp programs.
The program would include licensing opportunities and assistance for communities of color who have suffered disproportionately during the U.S.’s yearslong “War on Drugs.” Cuomo estimates New York could generate more than $300 million in tax revenue, much needed income given the devastation the state budget has suffered during the coronavirus pandemic.
was up 3.5%.
was up 2%.
The Cannabis ETF has gained 78% in the last three months, while the S&P 500
has gained 11%.