In January, Kamala Harris announced that she would run in the 2020 presidential election as a Democratic nominee. Previously, she served as California’s attorney general. Currently, she’s a senator from California. Harris is California’s first African-American senator.
Kamala Harris’s stance on cannabis
Initially, Harris was against cannabis legalization. In 2010, she opposed Proposition 19 while serving as California’s attorney general. The initiative would give local governments the power to regulate and tax recreational cannabis, as reported by the Los Angeles Times on November 4, 2016. In 2014, while Harris was running against Ron Gold to become California’s attorney general, she opposed Gold’s support for cannabis legalization. In February, the Washington Free Beacon reported that more than 1,560 people were sent to prison for cannabis-related offenses from 2011 to 2016 in California. During that time, Harris was serving as the attorney general.
Kamala Harris spoke at a conference organized by Center for American Progress in May 2017. She said, “Let me tell you what California needs, Jeff Sessions. We need support in dealing with transnational criminal organizations and dealing with human trafficking – not in going after grandma’s medicinal marijuana,” as reported by The Charlotte Observer on May 16, 2017. She opposed Sessions’ anti-drug policies. Harris shifted her stance towards cannabis legalization.
In May 2018, Harris cosponsor Senator Cory Booker’s Marijuana Justice Act. The act aimed to legalize cannabis at the federal level. In a press release, she said, “Right now in this country people are being arrested, being prosecuted, and end up spending time in jail or prison all because of their use of a drug that otherwise should be considered legal.” Harris also said, “Making marijuana legal at the federal level is the smart thing to do, it’s the right thing to do. I know this as a former prosecutor, and I know it as a senator.” In 2018, Harris and Senator Orrin Hatch asked Sessions not to block research efforts on medical marijuana.
Harris introduced MORE
On July 23, Kamala Harris and Judiciary Committee Chairman Jerrold Nadler introduced the Marijuana Opportunity Reinvestment and Expungement Act or MORE Act in Congress. The act intends to remove marijuana from the Controlled Substances Act and decriminalize drugs. The act will allow states to set their own policies. Notably, the act requires cannabis-related convictions to be expunged or resentenced. The bill proposes a 5% tax on cannabis products to create an Opportunity Trust Fund. Overall, the bill would help individuals suffering from the war on drugs.
Cannabis performance this year
The cannabis sector has been hit by several regulatory scandals this year. So far, the sector has underperformed the boarded equity markets. The ETFMG Alternative Harvest ETF (MJ) and the Horizons Marijuana Life Sciences Index ETF (HMMJ) have returned -0.6% and 1.2%, YTD. In comparison, the S&P 500 Index has risen 13.6%.
In the cannabis space, CannTrust Holdings (TRST) and Tilray (TLRY) have lost 62.3% and 59.9% of their share value this year. CannTrust had several compliance issues with Health Canada. The company fired its CEO and asked its chairman to step down due to regulatory scandals. Tilray reported an increase in its net losses in its first and second-quarter earnings. In the second quarter, the company reported net losses of $0.32 per share. Analysts expected a loss of $0.25 per share. Increasing net losses might have made investors skeptical. As a result, the company’s stock price fell.
In comparison, Aurora Cannabis (ACB) and Cronos Group (CRON) have returned 10.9% and 5.1%, respectively. Recently, Aurora Cannabis acquired Hempco Food and Fiber. The stock rose due to the acquisition and strong fourth-quarter guidance. Recently, Aurora Cannabis increased its secured credit facility from 200 million Canadian dollars to 360 million Canadian dollars.
On August 8, Cronos Group reported its second-quarter earnings. The company beat analysts’ sales estimates. However, Cronos Group’s operating losses were wider than analysts’ expectations. The company’s management announced that its operating losses will rise in the second half of this year, which offset some of the gains in its stock price.
Kamala Harris isn’t alone
Apart from Kamala Harris, many Democratic nominees have supported cannabis legalization. Some of the prominent nominees that support cannabis legalization at the federal level are Bernie Sanders, Joe Biden, Pete Buttigieg, and Andrew Yang.