Five states had cannabis legalization on their November ballots. All five states — New Jersey, Arizona, Mississippi, Montana, and South Dakota — passed those ballot initiatives. As the presidential election wraps up with a win for the Democratic Biden/Harris ticket, a Wall Street analyst predicts a Biden’ Blue Wave’ that will launch the U.S. cannabis industry into another realm.
Vivien Azer, an analyst for Cowen, told investors she expects a “Biden Blue Wave.” That scenario would provide the biggest catalyst for the cannabis industry, Azer said in an October 29 note titled “Last Minute Predictions,” because it would increase the likelihood of passage for cannabis-related legislation in Congress.
“[W]ith a Biden victory and a Democratically-controlled Congress, we would expect regulatory momentum to continue into 2021 and beyond,” Azer wrote.
Before this most recent presidential election, cannabis was legal in 11 states, plus Washington D.C. It remains illegal on the federal level.
During the vice-presidential debate, Harris said that a Biden administration would decriminalize weed at the federal level. That resulted in soaring cannabis stocks the very next day. Supporters of legalization tout the tax revenue the industry generates, in addition to a boost in employment opportunities and job creation. Advocates are lobbying hard to promote the social justice aspect as well — on both state and federal levels.
Even the most anti-cannabis person can’t deny the tax revenue the devil’s lettuce generates. According to Marijuana Business Daily, New Jersey anticipates $63 million in annual state tax and another $19 million in local tax revenue by 2024. For those states struggling after COVID shutdowns, these taxes are mighty appealing. Cannabis advocates involved with the Marijuana Policy Project are waging on a pending weed race. East Coast states are rushing to join the fray by legalizing.
Cowen also predicts that the new administration means a high likelihood that the STATES Act will get through Congress within the next two years. The STATES Act allows each state to regulate its own cannabis markets, keeping federal interference (read: enforcement) at arms’ length.
The MORE Act and the SAFE Banking Act are in a distant second and third place. The MORE Act would take away marijuana’s controlled substance status and essentially decriminalize weed at the federal level. Criminal records involving cannabis would be expunged, too. Another enticing tidbit: the MORE Act’s passage could allow Canadian cannabis companies to expand into U.S. markets.
The SAFE Banking Act is one that the cannabis industry has been clamoring for, which would give banks certain protections for working with businesses in the cannabis industry and open up banking access, banking services, and capital. Until cannabis is legalized federally, it’s highly unlikely that the banking and finance side of the equation will expand.