On the backdrop of cannabis company Tilray (TLRY) — which is traded on the Nasdaq (^IXIC) but operates primarily in Canada — reporting record revenues in its fiscal second quarter of 2024, what are the prospects of marijuana regulation looking like in the 2024 presidential election?
AdvisorShares Pure US Cannabis ETF Portfolio Manager Dan Ahrens — whose firm manages two cannabis ETFs (MSOS, YOLO) — comments on the hopes for cannabis reform being on 2024 ballots after administrative promises made in the past.
"A lot of people expected reform when Biden first got elected and Democrats got control of the House and, sort of, the Senate," Ahrens says to Yahoo Finance. "This year we feel strongly that we're finally going to get federal reform by bypassing all those politicians and having the government agencies doing it."
Click here to watch the full interview on the Yahoo Finance YouTube page or you can watch this full episode of Yahoo Finance Live here.
Editor's note: This article was written by Luke Carberry Mogan.
Video Transcript
- That's really interesting here, Dan. So how much of that also hinges on the results of the 2024 election, specifically at certain state levels? As we know, cannabis is going to be back on the ballot and some new jurisdictions.
DAN AHRENS: Well, cannabis has been growing state by state in the United States. There's only 12 states left that don't have any legalized cannabis. More often, we're talking about medical cannabis. But then other states that have had successful medical cannabis programs often look to add adult use onto the ballot. So cannabis continues to grow in the United States. But the big elephant in the room is at the federal level.
These companies are facing major, major headwinds. A lot of people expected reform when Biden first got elected and Democrats got control of the House and sort of the Senate. But they made promises before that election, and have failed on those promises. But this year, we feel strongly that we're finally going to get federal reform by bypassing all those politicians and having the government agencies do it.
The HHS wrote a letter that Biden asked for over a full year ago recommending a rescheduling of cannabis. Now it's in the hands of the DEA. We have no true known frame. We actually thought it might come in November or December.
But now people are thinking it could come any day where the DEA is expected to accept the HHS recommendation to reschedule cannabis from a DEA Schedule I where it doesn't belong at all. Those are heavy narcotics with no medical uses. And change it to a Schedule III drug. And a number of dominoes fall after that.
It would be a huge, huge windfall for US cannabis. And effectively decriminalizing it. It's a different move to reschedule. But that's what we're expecting at any point now. And it's a huge move for these beaten down stocks that we've been investing in for the last three years while we're waiting on politicians.
