Republicans have been conservative about cannabis. However, cannabis legalization is a popular discussion topic among Democrats. In the past, the bills and reforms were Democrats’ initiatives. Republicans oppose some of the reforms even in states where cannabis is legal. However, there could be some support from Republicans regarding marijuana.
Do Republicans want to join the cannabis action?
We haven’t seen much cannabis support from Republicans. They have always questioned the effects of cannabis. In many states, there has been strong opposition among the political party regarding legalization. Interestingly, a Forbes article in December discussed how a few Republicans are pushing for cannabis research. Cannabis research is the first step in the US towards federal legalization. Earlier, White House officials mentioned that they would like more research on cannabis before legalization.
Currently, four Republicans want a hearing on pending bills, which will smooth the research process to understand the effects of marijuana. The Forbes article said that the GOP members wrote to the chairs of the Energy and Commerce Committee and its Health Subcommittee.
The GOP members said, “We urge you to hold a legislative hearing regarding federally-sanctioned research on cannabis as soon as possible, with a panel of federal witnesses. This hearing would be an opportunity for members to learn about…legislation that offers potential solutions to help improve the research landscape.”
Republicans Greg Walden and Michael Burgess also discussed how drugs that fall under the “Schedule I” category are harder to research. Currently, marijuana, which is a Schedule I drug, is only available from a single farm at the University of Mississippi. Research is restricted due to the limited variety available to understand the components and its effects better. The GOP members also think that obtaining products from different registered manufacturers will help make the pros and cons more clear.
Democrats have passed various bills and reforms for legalization. However, since the Senate has a Republican majority, the bills get stuck. The House and the Senate have to approve a bill for it to become a law in the US.
Republicans and cannabis legalization
However, the GOP members’ attempt doesn’t entirely show that Republicans want cannabis to be legalized. The members want to understand the health effects of the CBD products that are available and used in the market.
In states like Texas, Republicans are completely against legalizing cannabis. Recently, I discussed how the state faces the least support from conservative residents or Republicans for legalizing recreational marijuana. Read Are Cannabis Edibles Coming to Maryland Soon? to learn more.
In the past, I have discussed that it’s important to understand the health effects of cannabis. President Trump and his administration are stern about their decision to understand the effects of cannabis use before allowing legalization. Recently, President Trump said that he could ignore Congress’s reforms on protecting states from federal interference. He could allow federal interference in US states where cannabis is legal.
The cannabis industry and legalization
US federal legalization will benefit Canadian cannabis players. Cannabis companies can successfully launch their new edibles products in Canada and countries where it’s legal. Many of the companies have been waiting to expand in US markets. Americans want to use marijuana, especially medicinal marijuana, to deal with many health issues. Medicinal cannabis has helped people dealing with chronic pain, cancer, epilepsy, post-traumatic stress disorder, nausea, muscle spasms, multiple sclerosis, Alzheimer’s, and many other medical issues. However, due to a lack of quality research, we don’t know if cannabis really helps people with these health issues.
In the US, only 33 states and the District of Colombia allow medicinal cannabis. The Drug Enforcement Administration still treats marijuana as an illegal drug. As a result, researchers have a hard time studying the drug. Republicans took this stance to allow researchers to obtain a license to study marijuana more.
Recreational marijuana is also popular in the US. Many individuals who can’t smoke cannabis want to try it in the edible form. The edible products include brownies, chocolates, gummies, beverages, and many other forms that could attract a huge consumer base. The edibles market could be worth 2.7 billion Canadian dollars annually, according to Deloitte. As a result, expansion in the US would benefit cannabis companies. Canopy Growth and Aurora Cannabis plan to launch their CBD-based products in US states where it’s legal.
However, the FDA still isn’t sure about CBD-based products. The FDA issued warning letters to Curaleaf in 2019. There are still challenges for cannabis companies.
Did cannabis players bottom out in 2019?
Cannabis players had a hard time in 2019. Many players, like CannTrust, saw the worst after violating Health Canada’s regulations. As a result, cannabis legalization is important for the cannabis industry. A small misstep could doom a company’s future. CannTrust, which earned a good name in the industry, lost investors’ trust after the regulation scandals. Legalization will also allow access to legal cannabis. Currently, consumers are obtaining cannabis from the illegal market. Notably, illegal cannabis sales are also rising in the US. Canada and cannabis companies struggled with illicit black market sales in 2019. As a result, Aurora Cannabis (ACB), Hexo (HEXO), Canopy Growth (CGC), and Cronos Group’s (CRON) revenues and profitability fell. In contrast, Aphria (APHA) was in a good place in 2019.
In 2019, Aphria lost 13.1%, while Hexo lost 69.7%. Canopy Growth stock lost 27.0%, while Aurora Cannabis stock lost 58.7% last year. Cronos Group returned 32.1% in 2019. The Horizons Marijuana Life Sciences ETF fell by 42.2% in 2019.
The cannabis sector has started in 2020 in the red. At 10:23 AM ET today, Cronos Group has fallen 2.7%, while Aphria is down 3.5%. Hexo is up 0.03%, while Canopy Growth and Aurora Cannabis have fallen 3.4% and 4.1%, respectively. HMMJ has fallen 1.6% today.