On March 15, 2024, Vice President Kamala Harris made headlines during a roundtable conversation at the White House, where she addressed the pressing issues of marijuana reform and criminal justice. This event marked a pivotal moment for Harris, who, as a candidate, has increasingly aligned herself as a pro-cannabis advocate. “We need to legalize it and stop criminalizing this behavior,” she asserted, emphasizing the urgency of reforming outdated cannabis laws. This statement not only underscores her commitment to the cause but also reflects a broader societal shift towards acceptance and regulation of cannabis.
However, industry leaders are cautiously optimistic about Harris’s promises. Jason Wild, executive chairman of TerrAscend, a major player in the cannabis industry, expressed hope for meaningful action rather than mere rhetoric. “I hope this time around, these campaign promises aren’t just soundbites but will lead to tangible change,” he stated, highlighting a common frustration among cannabis advocates who have seen many discussions but little progress.
Historically, Harris’s involvement with cannabis reform dates back to her tenure as a senator when she championed legislation aimed at decriminalizing and taxing cannabis at the federal level. Her selection as Biden’s vice president signaled a commitment to advancing discussions on both criminal justice and cannabis reform. Yet, as the Biden administration attempts to navigate the complexities of rescheduling cannabis, progress has been notably slow. Brady Cobb, founder of Sunburn Cannabis in Florida, pointed out that despite some advancements, the actual reclassification process remains incomplete.
In a significant step, the Biden administration announced plans to move cannabis from the strict Schedule I classification to the less stringent Schedule III. This change would not only facilitate research into the medical benefits of cannabis but also enhance sales and distribution systems in states where cannabis is legal. However, the reclassification process has faced delays, with the Drug Enforcement Administration postponing hearings on the proposed rule change until after the upcoming election. This stagnation has left investors and industry stakeholders eager for clarity on future reforms.
Emily Paxhia, co-founder of Poseidon Investment Management, noted the importance of understanding the Harris campaign’s vision for cannabis reform. “Several paths need to be improved, including banking and capital markets reform,” she said, indicating that a comprehensive approach is crucial for the industry’s growth. The skepticism extends beyond the Democratic camp; even former President Donald Trump’s recent remarks on cannabis have drawn scrutiny from within the industry.
In a surprising shift, Trump recently expressed support for cannabis research and stated that his administration would work towards reclassifying cannabis to Schedule III, while also advocating for safe banking measures for state-authorized companies. This statement has led to a notable uptick in the AdvisorShares Pure US Cannabis ETF, which has seen a 12% rise since Trump’s comments, signaling investor optimism about potential bipartisan support for cannabis reform. Bernstein analyst Nadine Sarwat noted that the convergence of support from both Republican and Democratic candidates raises the likelihood of federal legalization, suggesting that it may only be a matter of time.
Nevertheless, while this political momentum appears promising, Sarwat cautioned against complacency, pointing out that state-level sales performance remains sobering amidst macroeconomic challenges. The cannabis market’s growth has stagnated, and the industry continues to face significant hurdles, including regulatory barriers and economic headwinds.
As the landscape of cannabis reform continues to evolve, it becomes increasingly clear that both political will and industry advocacy are essential for driving meaningful change. The commitment from leaders like Kamala Harris is vital; however, the industry is watching closely to ensure that promises translate into actionable policies that foster growth and equity in the cannabis sector. As the 2024 election approaches, the discourse surrounding cannabis reform will likely intensify, reflecting broader societal attitudes and the urgency of addressing the complex issues surrounding cannabis legalization.
