Cannabis has the highest profile it has ever had as an election-year issue. This confirms my core thesis that powerful cultural momentum favors of cannabis reform. That’s bullish for cannabis stocks. Plus, once again, they’re extremely out of favor – another good reason to buy right now.
Because politicians are involved, it’s tough to predict the timing of any reform that would boost cannabis stocks. But one thing is clear. Politicians are now paying attention to cannabis reform, because voters favor change. Polls consistently show that. This increases the odds of reform that would favor cannabis companies.
Here’s a closer look at what I mean.
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Presidential Candidates Support Cannabis Reform
Both presidential candidates have highlighted their favorable positions on cannabis reform, obviously because voters in the key swing states favor change.
Vice President Kamala Harris recently confirmed publicly that she favors cannabis legalization. “People should not be going to jail for smoking weed,” she said in an interview on the podcast “All the Smoke.” “We know historically what that has meant and who has gone to jail,” she said, a reference to the relatively high per capita arrest rate among minorities. About 200,000 people were arrested for cannabis in 2023 mostly for possession, says the FBI. Arrests of African Americans came in at 29%. They make up 13.6% of the population.
“I think we have come to a point where we have to understand that we need to legalize it and stop criminalizing this behavior,” said Harris. The comments were her first campaign reaffirmation of a view on cannabis legalization which she has had for years. “This is not a new position for me. I have felt for a long time we need to legalize it.”
Her cannabis policy reiteration landed as the presidential candidates ramp up their battle for swing state voters. Several polls show that a majority of voters in key swing states support cannabis reforms like legalization of recreational use.
Presidential candidate Donald Trump backs cannabis rescheduling which would boost cannabis company cash flow. He supports cannabis banking reform that would allow banks to serve cannabis companies. He also implicitly supports legalization, or at least decriminalization, given his stance on a Florida initiative.
Voters in Three States Will Weigh in on Cannabis Reform
* In Florida, voters will decide on legalization of recreational use. They will be voting on this issue in a referendum called Amendment 3. Trump, a Florida resident, supports the initiative.
The lawsuits are flying in Florida over this initiative. Trulieve (TCNNF) has sued the Republican Party of Florida, which opposes the change, and two media outlets to try to stop what it says are false and misleading advertisements opposing the referendum. The suit says the GOP, Sun Broadcasting, and Fort Myers Broadcasting are spreading “intentionally deceptive” claims about the referendum, called Amendment 3.
The lawsuit challenges mailings and TV ads that accuse Trulieve of backing Amendment 3 as a “power grab” to eliminate competition and enshrine a monopoly position in the state constitution. Trulieve says the statements are “demonstrably false,” an assertion supported by the facts.
Trulieve cites the plethora of competing cannabis companies and stores in the state. “No single company accounts for more than half of Florida’s cannabis market,” the complaint states. Trulieve handles 30% to 38% of the state’s cannabis sales depending on the product format, says Florida’s Office of Medical Marijuana Use. Trulieve also says Amendment 3 would increase competition by allowing the state to issue more licenses to produce and sell cannabis.
The Florida vote outcome will have ramifications beyond the state, says one cannabis sector expert. “When Florida acts, other conservative states listen,” says Hirsh Jain, who is on the board of the Los Angeles branch of NORML. “If legalization does pass in Florida, the decision would be an incredibly important concession for American conservatism.”
To pass, Amendment 3 needs at least 60% of the vote. Polls continue to suggest the vote will be close. Betting sites like Polymarket confirm the vote will be close.
* In Arkansas, voters will weigh in on an initiative that would expand the state’s medical-use sales. It would allow healthcare professionals to recommend cannabis for more medical conditions, and allow patients to grow their own supply. The initiative would also broaden the group of healthcare professionals who can recommend cannabis to pharmacists, nurse practitioners, and physician’s assistants.
A majority of voters in the state approve the changes, according to a survey. But the Arkansas secretary of state is challenging the validity of signatures gathered to support the referendum. The referendum will be put to voters anyway because ballots are already printed. The dispute comes down to whether the results will matter if voters approve the referendum.
* Voters in North Dakota will weigh in on a recreational-use legalization referendum. Polls show this initiative does not have enough support to pass. But a large percentage of voters are undecided, so it seems too early to call the outcome.
The bottom line: Patience can be rare among investors, but it is normally rewarded – eventually. I believe that will be the case with cannabis stocks. For details on the best ones to own, consider subscribing to Cabot Cannabis Investor today.
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