Home / World / 7 Reasons Marijuana Has Virtually No Chance of Being Legalized in the U.S. Before 2021

7 Reasons Marijuana Has Virtually No Chance of Being Legalized in the U.S. Before 2021



If investors looked around, they would probably find a series of fast-growing trends, such as blockchain, cloud computing and gene therapy in the health sector. But perhaps there is not an industry with a more impressive growth rate at this time than marijuana.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "It seems that the sales for the cannabis industry are only limited by our imagination, while I personally thought that Cowen GroupThe estimate of $ 75 billion in global sales for the year 2030 was quite aggressive. The recent report by Stifel analyst Andrew Carter pulled me out of the water. $ 200 billion in annual sales in a decade.. This scenario has a key to succeed: The United States must legalize marijuana at the federal level. "Data-reactid =" 12 "> It seems that sales for the cannabis industry are only limited by our imagination, while I personally thought that Cowen GroupThe estimate of $ 75 billion in global sales for the year 2030 was quite aggressive. The recent report by Stifel analyst Andrew Carter pulled me out of the water and demanded $ 200 billion in annual sales in a decade. Such a scenario has a key to succeed: The United States has to legalize marijuana at the federal level.

A person with cannabis leaves in their cupped hands.

Image source: Getty Images.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Make no mistake: we have come an incredibly long way in the US since 1995, when no state legalized medical or recreational marijuana, and support for legalization reached approximately 25%. two thirds of the respondents The annual Gallup survey favors the legalization of marijuana, with 33 states that have approved medical cannabis to some extent. Of these 33 states, a third (11) also allows recreational consumption, with Illinois being the last to legalize marijuana last month. Retail sales in Lincoln Land will begin on January 1, 2020. "data-reactid =" 34 "> Make no mistake: we have come an incredibly long way in the US Since 1995, when no state has legalized it the medical or recreational boat, and support for legalization stood at approximately 25% .Today, two-thirds of the respondents in the Gallup annual survey favor the legalization of marijuana, with 33 states that have approved cannabis Medicinally in some capacity, of these 33 states, a third also allows recreational consumption, with Illinois being the last month to legalize marijuana last month.Retail sales in Lincoln Land will begin on January 1, 2020.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "According to Carter, the United States represents $ 100 billion opportunity annual, or about half of all sales in a decade. Bank of America& nbsp; Christopher Carey, who has asked $ 166 billion in annual utopian sales, with EE UU generating more than $ 56 billion a year in legal revenue. "data-reactid =" 35 "> According to Carter, the US represents an annual opportunity of $ 100 billion, or approximately half of all sales in one year. decade. Bank of AmericaChristopher Carey, who has requested $ 166 billion in annual utopian sales, with the United States generating more than $ 56 billion a year in legal revenue.

But there is a fairly important problem with most of these random sales estimates: in general, they all assume that the US. UU They will legalize marijuana at the federal level, which is far from being a guarantee. In fact, there are seven good reasons to believe that, despite discussions about cannabis reform underway in Congress, there is virtually no possibility of federal marijuana reform before 2021.

<h2 class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "1. Republicans in general are not fanatics of cannabis."data-reactid =" 37 ">1. Republicans in general are not fanatics of cannabis.

As many of you already know, Republicans historically have had a more negative view of cannabis than people who identify themselves as democratic or independent. In the October 2018 Gallup poll, 75% of Democrats and 71% of independents preferred broad legalization, which compares to "only" 53% of Republicans.

It is worth noting that the favorability towards legalization has improved significantly within the Republican Party over the past 15 years (20% in 2003 versus 53% in 2018), but there is a clear gap in support for the party that currently controls the Senate and the Oval Office. .

The hammer of a judge then a handful of cannabis buds.

Image source: Getty Images.

<h2 class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "2. McConnell will likely block attempts to reform the Senate."data-reactid =" 65 ">2. McConnell will likely block attempts to reform the Senate.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Another reason why the efforts to reform marijuana they do not go anywhere in the US before 2021, the majority leader in the Senate, Mitch McConnell (R-Ky.). On more than one occasion, McConnell has blocked the jockeys or specific bills linked to cannabis reform to address the Senate for voting. Even if there were the possibility of approval in the Senate, which is not guaranteed given the slight majority of Republicans in the upper House of Representatives, McConnell seems unlikely to allow bills centered on marijuana to make him vote. "Data-reactid =" 66 "> Another reason why marijuana reform efforts will go nowhere in the United States before 2021 is Senate Majority Leader Mitch McConnell (R-Ky.) Addressing To the floor of the Senate for voting, even if there is the possibility of approval in the Senate, which is not guaranteed given the slight majority of the Republican Party in the Upper House of Congress, McConnell seems unlikely to allow bills centered in marijuana, they do it to vote.

<h2 class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "3. The Congress has more pressing issues."data-reactid =" 67 ">3. The Congress has more pressing issues.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "As much as I enjoy covering, and investing in, the industry of the pot, it is important to recognize that there are Much more urgent problems in the file For legislators in Congress. Yes, the legalization of marijuana could help create jobs and boost economic growth through tax collection, but broader economic issues, such as the trade war with China or the resolution of health reform, will take precedence over the idea of ​​reforming cannabis in the Capitol. . "data-reactid =" 68 "> While I enjoy covering and investing in the marijuana industry, it is important to recognize that there are many more urgent problems on the record for lawmakers in Congress, Yes, legalizing marijuana could help to create jobs and promote economic growth through tax collection, but broader economic issues, such as the trade war with China or the resolution of health reform, will take precedence over the idea of ​​cannabis reform in the Capitol .

<h2 class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "4. Despite public preference, cannabis is not a single voter problem"data-reactid =" 69 ">4. Despite public preference, cannabis is not a single voter problem

A fourth problem is that favorability alone is not enough to force lawmakers to embark on marijuana reform in Washington, D.C.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Last year, the independent Quinnipiac University asked the adult respondents, whether or not they could vote for a political candidate with whom they shared much in common, but who had a different opinion about cannabis from their own. Only 13% of respondents said they could not vote for that candidate, with 82 Noting that they would still vote for a candidate with an opposing opinion about marijuana, what this shows is that Cannabis is not a problem of only one voter, which means that elected officials are little afraid of losing their elected seats by adopting a contrary opinion of the majority. "data-reactid =" 71 "> Last year, independent Quinnipiac University asked adult respondents if they could still vote for a political candidate with whom they shared much in common, but who had a different opinion about cannabis from their Only 13% of respondents said they could not vote for that candidate, and 82% said they would still vote for a candidate Candidate with an opposing opinion about marijuana What this shows us is that cannabis does not It is a single voter issue, which means that elected officials are little afraid of losing their elected seats by taking an opposite view of the majority.

<h2 class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "5. Marijuana remains largely unknown to the FDA."data-reactid =" 72 ">5. Marijuana remains largely unknown to the FDA.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Legislators are also taking into account the food of the States United Drug Administration (FDA), which currently considers cannabis and its cannabinoids as have two medical benefits& nbsp; – the treatment of two rare forms of epilepsy starting in childhood. In addition to approving a single drug derived from cannabis, the FDA does not consider marijuana to have medical benefits. In the opinion of the regulatory agency, it is necessary to conduct a considerable study to understand its benefit and its risk profile, which is something that some legislators have been insisting for years. "Data-reactid =" 73 "> Lawmakers are also following the For example, the Food and Drug Administration (FDA) currently believes that cannabis and cannabinoids have two medical benefits: the treatment of two rare forms of childhood-onset epilepsy. only drug derived from cannabis, the FDA does not consider Marijuana has medical benefits From the point of view of the regulatory agency, a considerable study must be done to understand its risk and benefit profile, which is something that some legislators have been insisting during years.

A car keychain that is surrounded by dried cannabis flowers.

Image source: Getty Images.

<h2 class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "6. There is no definite limit of cannabis deterioration."data-reactid =" 95 ">6. There is no definite limit of cannabis deterioration.

However, another dilemma that legislators should consider is that there are no defined deterioration parameters for drivers who are behind the wheel and who have used marijuana. When it comes to alcoholism, there is a very well defined line in the arena with a blood alcohol content of 0.08%. If you are above this limit, you are legally considered disabled. But there are no uniform limits of deterioration for cannabis use, which makes some legislators even hesitate to raise the idea of ​​amending federal cannabis laws.

<h2 class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "7. It's a matter of money."data-reactid =" 97 ">7. It's a matter of money.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The seventh and last reason that should not wait The legalization of marijuana in the US at any time before 2021 (and 2021 might even be pushing it) is that reform creates a bit of a money problem. "data-reactid =" 98 "> The seventh and final reason why you should not wait for the legalization of marijuana in the United States at any time before 2021 (and 2021 could even be pushing it) is that the reform creates a problem of money.

US companies that sell marijuana are restricted by US tax code 280E. UU In summary, this tax code does not allow pot companies to make normal corporate deductions, except for the cost of the products sold, which is often only a small part of total sales. This can lead to profitable marijuana companies paying an effective tax rate of more than 70%, which can mean slower expansion and greater hiring capacity. However, despite being illegal at the federal level, the IRS has no qualms about collecting taxes on the profits of profitable cannabis companies.

However, if marijuana were legalized at the federal level, these businesses would no longer be subject to Section 280E. Or, to put this in another context, the federal government would lose its ability to impose a really high effective tax rate on profitable businesses. Estimates suggest that this would cost the federal government around $ 5 billion over a 10-year period.

A black silhouette of the United States that is partially filled with cannabis sachets, rolled-up joints and a scale.

Image source: Getty Images.

<h2 class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The wait continues for the participants of the market of hemp of the United States."data-reactid =" 122 ">The wait continues for the participants of the market of hemp of the United States.

So what does all this mean for investors in marijuana stocks? As you can imagine, it suggests that the established Canadian producers who are eager to participate in the great movement of cannabis from the USA. UU They will have to be patient. Of course, this does not mean that these licensed producers still can not find a way to leave their mark in the United States.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Since President Trump signed the agricultural bill in December, we have seen & nbsp;No less than six major Canadian cannabis producers. announce its entry into the cannabidiol (CBD) market derived from hemp and hemp. Two of the most recent participants include HEXO (NYSEMKT: HEXO) Y CannTrust Holdings (NYSE: CTST). "data-reactid =" 124 "> Since President Trump enacted the agricultural bill in December, we have seen no less than six major Canadian cannabis producers announcing their entry into the market for hemp and cannabidiol derived from hemp (CDB) Two of the most recent participants include HEXO (NYSEMKT: HEXO) Y CannTrust Holdings (NYSE: CTST).

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "HEXO recently created a US subsidiary (HEXO USA) and announced plans in its latest operating results to enter up to eight US states. UU In 2020 with its CBD products. Meanwhile, CannTrust is forming a 50-50 joint venture with Elk Grove Farming Company in California. The duo will initially plant 300 acres of hemp by 2020, but the joint venture will have access to up to 3,000 acres of arable land for future hemp harvesting purposes. "Data-reactid =" 125 "> HEXO recently created a subsidiary in the US (HEXO USA) and announced in its latest operating results plans to enter eight states in the US In 2020 with its products Meanwhile, CannTrust is forming a 50-50 joint venture with Elk Grove Farming Company in California.The duo will initially plant 300 acres of hemp by 2020, but the joint venture will have access to up to 3,000 acres of farmland. for future purposes of hemp harvesting.

Like many of its peers, HEXO and CannTrust are taking advantage of this opportunity to establish an infrastructure and business relationships that could be fruitful if the US federal government legalizes marijuana. But at the moment, the sales ceiling is still relatively low in the United States for at least half a dozen licensed Canadian producers.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " More from The Motley Fool "data-reactid =" 127 "> More from The Motley Fool

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Sean Williams owns shares of Bank of America and CannTrust Holdings. The Motley Fool recommends CannTrust Holdings Inc and HEXO. The Motley Fool has a disclosure policy."data-reactid =" 132 ">Sean Williams owns shares in Bank of America and CannTrust Holdings. The Motley Fool recommends CannTrust Holdings Inc and HEXO. The Motley Fool has a disclosure policy.


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