After Kamala Harris was nominated to be President Elect Joe Biden’s running mate, we knew that brighter days were ahead for the cannabis industry……..and the market seemed to agree with us.
After Joe Biden was projected to win the election, the cannabis sector recorded strong moves to the upside for almost two months. Although the sector has come off its recent highs, we believe the recent additions to President Elect Joe Biden’s cabinet send a very bullish sign to the cannabis industry.
During the last month, President Elect Joe Biden has announced several key cannabis-friendly additions to his cabinet. When you combine the democrats winning two key senate seats in Georgia (and became the majority of both the House of Representatives and the Senate) with the recent additions to the cabinet, we believe that the US cannabis industry is going to flourish.
Most recently, President elect Joe Biden selected former South Carolina Democratic Party Chair Jaime Harrison to lead the Democratic National Committee (DNC). He is a strong supporter of cannabis legalization and will be responsible for coordinating Democrats’ national political activities. Harrison still needs to be confirmed by party leaders, but we are confident that he will.
When Harrison ran for a Senate seat in South Carolina, he said that the US should legalize, regulate and tax cannabis like alcohol and tobacco. We are favorable on his appointment and believe that his views on cannabis will be reflected in the Democrats’ national political activities.
While we can hope for the legalization of cannabis the federal level, we believe the new administration (and government) will quickly pass cannabis decriminalization legislation. If we see cannabis decriminalized, we believe that companies will quickly notice significant margin appreciation. If cannabis is decriminalized, 280 E should be revoked, and this would prove to be a substantial catalyst for companies.
280E is the worst legislation we have ever seen in any industry. The rule does not allow companies to deduct basic business expenses and makes it much more challenging for operators to reach profitability. We believe the revoking of 280E is inevitable and is something that our readers should be aware of.