The topic of cannabis legalization has lost some of its heat since the first Democratic presidential debate on September 12. For more on this topic, please read Cannabis Legalization: Dark Clouds Loom Post Debate. Before that, cannabis legalization had been widely discussed among the Democrats. On November 17, former Vice President and Democratic candidate Joe Biden detailed his reasons for not supporting marijuana legalization. Let’s see why.
Joe Biden won’t legalize marijuana
According to a November 17 in The Hill, Biden said that the topic of cannabis legalization was still up for debate. Biden discussed marijuana legalization at a town hall in Las Vegas on Saturday. As Biden feels there isn’t enough evidence to support legalization, he wouldn’t legalize marijuana if elected.
Biden had supported the idea of medical cannabis in his previous presidential campaigns. He also supported the idea of decriminalization of marijuana. However, he has always opposed full-scale legalization, which we discussed in Marijuana: Will Trump Have an Edge over Biden?
President Trump has been quiet about this issue, leaving this decision to the states. However, it appears that Biden has echoed President Trump’s opinion about legalization, noting that cannabis legalization is a state issue for now. More states are legalizing cannabis, which we detail in Cannabis Legalization in Minnesota: Things to Know.
More research is needed before legalizing marijuana
The Hill reported that Biden said, “The truth of the matter is, there’s not nearly been enough evidence that has been acquired as to whether or not it is a gateway drug.”
He continued, “It’s a debate, and I want a lot more before I legalize it nationally. I want to make sure we know a lot more about the science behind it.”
Notably, White House officials have also expressed this same view. Two federal drug officials and a member of the Office of National Drug Control Policy (or ONDCP) feel that additional research needs to be done before the decision reaches a federal level. To learn more, please read Marijuana Legalization: Is the White House Warming Up?
On a federal level, cannabis is illegal in the US. Although the advantages of medical marijuana are becoming more apparent, the Trump administration wants to understand the pros and cons before legalizing it. However, conducting additional research requires capital, which would be easier once federally legalized.
Does Biden’s opposition to legalization affect his campaign?
Surveys indicate that Joe Biden has the edge over President Trump in the general election. A national poll in September showed that Biden has an edge of 55% to Trump’s 40%.
Marijuana is gaining popularity among Americans. A survey by Pew Research showed that two-thirds of Americans now support marijuana legalization. It will be interesting to see whether these shifting attitudes affect Biden’s chance of being elected.
Meanwhile, Trump can improve his chances by showing support for legalization. However, vaping-related health concerns still present a significant issue. Among the other Democratic candidates, Elizabeth Warren, Andrew Yang, Cory Booker, and Bernie Sanders support full-scale legalization.
What’s happening with the cannabis industry?
While the legalization topic is picking up steam again, the cannabis industry is in turmoil. The sector has suffered this year mainly due to regulatory issues, which underscores the potential importance of legalization. The industry is down this month after several large cannabis companies reported dismal earnings.
Aurora Cannabis (ACB) missed revenue estimates for the first quarter of fiscal 2020. However, its revenue grew 153.57% YoY (year-over-year). It also reported a loss of 39.67 million Canadian dollars. To learn more, read Aurora Cannabis: Good or Bad News for Its Q1 Earnings? Aurora’s stock has taken a hit since its earnings.
Canopy Growth’s (CGC) (WEED) Q2 of fiscal 2020 revenue of 78.6 million Canadian dollars also missed analysts’ estimates. Canopy Growth also reported EBITDA of -155.7 million Canadian dollars. To learn more, please read Canopy Growth Stock Falls after Weak Q2 Earnings.
After suffering since last week, cannabis stocks were trading in the green on Wednesday. At 11:14 AM ET, ACB stock was up 9.1%. Meanwhile, CGC and Cronos Group saw their stocks rise 11.7% and 1.0%, respectively. Cannabis ETFs have also suffered this month.
For more marijuana-related news and updates, please visit 420 Investor Daily.