Can Marijuana Legalization Spark Beto O’Rourke’s Bid?

Marijuana reform is central to Beto O’Rourke’s 2020 presidential campaign—how could his agenda that affect the cannabis industry?

Sushree Mohanty - Author

Aug. 22 2019, Updated 2:24 p.m. ET

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Beto O’Rourke has always been a supporter of marijuana legalization. Now that he is seeking the 2020 Democratic presidential nomination, marijuana reform could be his campaign’s primary agenda item. The 2020 election cycle is heating up—and so is the marijuana industry.

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Beto O’ Rourke takes a bold stance

O’Rourke first took a stand for cannabis in 2009 when he introduced a city council resolution protesting the prohibition of cannabis. O’Rourke believes that if legalized, marijuana would be sold by regulated businesses. In a regulated environment, he believes that cannabis wouldn’t be sold by teenagers on street corners and middle school playgrounds, keeping children safe. In March, he told a rally in Iowa, “We should end the federal prohibition on marijuana.”

O’ Rourke’s policy actions

A Marijuana Moment article noted that during his time in Congress, O’Rourke passed numerous reforms and bills in support of cannabis. He also cosponsored several drug reform bills focusing on federal cannabis and hemp laws.

He believes that regulating cannabis at the national level could also keep a check on black-market profits. O’Rourke has regularly stepped forward to pass bills to provide banking access to state-legal marijuana businesses, particularly the Secure and Fair Enforcement Banking Act of 2017.

We believe that, if elected, O’Rourke’s history of supporting marijuana legalization would make his administration’s approach to legalization an interesting process to watch.

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Other candidates are stepping up too

In Bernie Sanders Tweets on Marijuana Legalization, we recently discussed Bernie Sanders’ stance on marijuana legalization. Among the other candidates, Joe Biden, Andrew Yang, Bill de Blasio, and Pete Buttigieg have also expressed their views about marijuana legalization. In March, Vox reported that a 2018 Gallop poll showed that 75% of Democrats backed legalization.

Although President Trump hasn’t expressed his take on cannabis, we believe he can use it as a vital issue in his reelection campaign. Please read President Trump: Is Marijuana Legalization a Key Weapon? to learn more.

Where is the cannabis industry heading?

Cannabis is a growing sector, and we believe these particular candidates see potential in the industry. If regulated, the sector could bring in tax revenues and help improve job growth. So, these candidates are pushing for the industry to be regulated and legalized.

Regulations are vital to the cannabis industry, as they affect stock performance. Recently, we saw CannTrust (CTST) become entangled in a regulation scandal, and the stock suffered severely. CannTrust violated Health Canada regulations, which took a toll on its stock price. KPMG also withdrew the audit report for the company following this event. CTST is down 61.4% year-to-date.

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Some major cannabis players have shown tremendous potential, including Aurora Cannabis (ACB). Aurora Cannabis recently updated the guidance for its Q4 2019 results. It now expects to report revenue from 100 million–107 million Canadian dollars, and it expects growth across all key business segments.

The company plans to report its results next month. Aurora Cannabis stock is down 6.5% in August, and its stock has gained 17.7% year-to-date. Stay with us to see what analysts forecast for Aurora Cannabis.

Canopy Growth (CGC) (WEED), another major player in the cannabis space, reported dismal first-quarter results. CGC missed analysts’ revenue estimates by a wide margin. Canopy Growth also reported huge losses during the quarter, which also took a toll on the sector as multiple cannabis stocks declined.

Canopy Growth is down 18.5% in August and 1.1% YTD. In August, Cronos Group (CRON) has fallen 13.1% and Aphria (APHA) has risen 22.3%.

Check back to learn more about other presidential candidates’ stances on marijuana. Meanwhile, take a look at Marijuana: What Do Buffett and the Richest Americans Think?


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