The S&P 500 has rallied hard off the index's March lows and is back at new all-time highs. Unfortunately for cannabis investors, cannabis stocks like Canopy Growth Corp (NYSE: CGC), Cronos Group Inc (NASDAQ: CRON) and Aurora Cannabis Inc (NYSE: ACB) are still down sharply in 2020.
No Pre-Election Highs For Cannabis Stocks: One of the most disappointing observations for cannabis stock investors is how poorly the stocks are performing with a little more than two months remaining until the U.S. presidential election.
Cannabis legalization appears to be an afterthought at this point for both Democratic nominee Joe Biden and incumbent Republican President Donald Trump, DataTrek Research co-founder Jessica Rabe said Tuesday.
Expecting Trump and the Republican Party to change their tune on cannabis may have been a long shot. Yet Rabe said investors were likely disappointed that the official 91-page Democratic Party platform document only mentioned “marijuana” and “cannabis” three times, and not at all until page 37.
While investors may have been hopeful that Democratic vice presidential nominee Kamala Harris would push for a more progressive approach to cannabis, it appears the best they can expect in the near future is nationwide decriminalization, rather than legalization.
Voters Want Legalization: A late 2019 Gallup poll found that 76% of Democratic voters favor marijuana legalization, while 68% of independent voters and even 51% of Republican voters do as well.
Biden has consistently said he is in favor of more cannabis research before he endorses federal legalization.
“Joe Biden’s views on marijuana are out of step with his party and base, so even a Democratic sweep of the White House and Congress does not assure national legalization,” Rabe said.
Ironically, the best chance for Democrats to take a more aggressive approach to marijuana legalization prior to the election may come if the race between Biden and Trump tightens heading into Election Day, she said.
“Perhaps an increasingly tight race will push Biden to embrace national legalization to rally voters to the polls, especially millennials, [who] broadly support the issue.”
Benzinga’s Take: Even if federal cannabis legalization is not a top priority for Democrats in the near-term, decriminalization would be a significant step in the right direction for the industry.
Passage of the SAFE Banking Act would have perhaps an even larger impact by reducing the risk banks and other financial institutions take in providing capital and other services to businesses operating in states that have legalized cannabis.
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