It’s an election year, which means that anyone who even remotely pays attention to the news is going to be inundated with constant media coverage of the horse race that politics often devolves into.
Whatever your political bent, this is without a doubt a monumental election when it comes to marijuana stocks. And Bernie Sanders, love him or hate him, has just opened up a huge political avenue for federal U.S. marijuana legalization.
It’s no secret that Sanders is among the most active proponents of cannabis legalization in the country. While the majority of the top five candidates for the Democratic Party presidential nomination are, to one degree or another, pro-legalization, none of them have made it quite the pillar of their campaign like Sanders has.
Again, you may not like his overall politics, but if you’re an investor in pot stocks, Sanders represents the single greatest opportunity for marijuana stocks to skyrocket in the coming years.
The reason is simple: executive orders.
While, in a technical sense, Congress forges the laws of the land, in the modern era, the president has become far more powerful in this regard, due to executive orders. These are directives that the president can dole out with near impunity.
For example, the infamous immigration ban, or “Muslim Ban,” as some in the media took to calling it, was an executive order signed by President Donald Trump. That’s a lot of power that lies at the tip of the president’s pen.
Furthermore, executive orders are not the only tools at a president’s disposal. A president’s administration can also issue directives in the form of memos to set policy priorities.
You may remember the “Cole Memo,” which was the Barack Obama administration’s guidance that the Department of Justice essentially cease to search out marijuana-related crimes in states that had legalized the drug.
That’s despite the fact that, under the rules of preemption, federal law supersedes state law. What that means is that, technically, marijuana in the U.S. remains illegal.
I don’t know if you’ve been paying attention, but there are healthy U.S. marijuana markets active today. In fact, California has the largest legal marijuana market in the world, even though technically it’s illegal at the federal level.
There’s a whole lot of confusion and bureaucratic paradoxes, but the important thing to note is that, when Obama approved the Cole Memo, he essentially legalized marijuana in all states that had state-level legalization.
Furthermore, any state that has legalized medical marijuana is, in fact, in direct confrontation with the U.S. drug scheduling scheme, which explicitly states that Schedule I narcotics have no medicinal value.
That is, without a doubt, one of the biggest absurdities you could think of, considering the advancements made regarding marijuana’s medical applications.
Heck, some of the biggest opportunities in the cannabis market are directly related to medical marijuana. Everything from pain management (a huge business in dire need of innovation) to treating PTSD and other mental health concerns could be big money-makers for marijuana companies.
The fact that the Drug Enforcement Administration (DEA) continues to list marijuana as having no medical value flies in the face of the scientific evidence.
And that’s just the thing: the continuing War on Drugs in the U.S. flies in the face of reality. The reality being that marijuana is a largely harmless drug (certainly much less harmful than alcohol) that could not only reduce crime and bring in huge tax revenue if legalized, it could also help jump-start the economy and provide investors with opportunities to make some serious money.
In any case, that brings us back around to presidential hopeful Bernie Sanders.
We’ve already established that there are many opportunities for the U.S. president to have a direct influence on how marijuana is handled in the country. As mentioned earlier, Obama took a huge step toward legalizing the drug with his approval of the Cole Memo.
Conversely, Trump was able to put a damper on that momentum when he installed Jeff Sessions as his original attorney general. That appointment led many to fear that the new sheriff in town, so to speak, wouldn’t be as forgiving when it came to marijuana.
Sanders has promised, if he gets into office, to go above and beyond what Obama did and federally legalize marijuana.
Sure, Congressional action would likely be necessary somewhere down the line, but Sanders could, on day one of his administration, legalize pot with the stroke of a pen. Here’s how.
U.S. Marijuana Legalization on Rocket Fuel
I always thought it would take years for marijuana to be legalized in the United States. Between the usually inactive and highly divided Congress, to opposition from law enforcement, I presumed that the U.S. legalization process would take at least as long as it did for Canada to implement.
Bernie Sanders, who is currently one of the front runners in the race to be the Democratic Party presidential candidate, has changed that.
Sanders released a detailed plan of what he would do in his first days in office as president, using the power of executive privilege.
Here are two items on his list: “unilaterally allowing the United States to import prescription drugs from Canada” and “directing the Justice Department to legalize marijuana.”
Those two policies, working in tandem, could lead to an explosion in value for marijuana stocks.
First, the obvious: by directing the Department of Justice (DOJ) to legalize pot, that would allow big banks to get involved with the marijuana industry.
While the move could meet opposition from states where the drug is still illegal, ultimately Sanders would permit large institutional investors to get involved in the marijuana industry without fear of the feds stepping in and seizing their money.
The other thing on the list that could be hugely important (although in a more roundabout way) has to do with opening up the U.S. to imports of prescription drugs from Canada.
Now, you may be asking, what does this have to do with marijuana investing?
Here’s the thing: this would undoubtedly improve the relationship between Canada and the U.S. that has been strained for the past three years, stemming from the fact that Trump and Canadian Prime Minister Justin Trudeau don’t see eye to eye on many things.
Trump hasn’t exactly dismantled the ties between the two countries, but he has put a damper on them.
Sanders, on the other hand, is an admirer of Canada. If he were to assume the presidency, he would undoubtedly look to rekindle the U.S.’s close ties with that country.
You don’t have to be an economist or political scientist to know that people tend to prefer to work with people they like than those they don’t.
Sanders and Trudeau, being of a more similar bent compared to Trump, would set off toward renewing the strong connection between Canada and the U.S., opening the door for Canadian marijuana companies to enter the U.S. market more readily.
Couple that with the intent to import more prescription drugs from Canada, and the knock-on effect could see marijuana stocks rise.
Look back at Richard Nixon and his opening of talks with China in the 1970s. While a very different situation, it’s a perfect example of how warming of diplomatic ties can lead to a huge economic shift.
Since relations between the U.S. and China were reestablished, China has become the U.S.’s top trading partner (a position formerly occupied by Canada, which now sits in second place).
The 2020 U.S. presidential election is going to have a massive impact on the economy, as presidential elections usually do. The marijuana industry is going to be doubly affected, seeing as how its fortunes are so closely tied to politics.
In that regard, there’s reason to hope for a president that could, in one signing, virtually legalize marijuana in the United States. If that comes to pass, investors could anticipate massive gains from marijuana stocks.