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Industry professionals and executives have no doubt whom they favor when it comes to cannabis politics.
The Motley Fool looked into investment opportunities in the marijuana industry and which presidential candidate will get the vote of marijuana professionals and executives. This year might be the year that the marijuana industry will be transformed. At least eight states are due to vote on recreational and medical marijuana legalization.
At this moment 25 states have legalized medical marijuana, four along with Washington, D.C. have legalized recreational use and sales to adults. Speculation has it that this number might double by the end of elections in November.
Why the sudden shift?
States where marijuana use has been legalized realized the new revenue sources in tax and licensing have potential. Colorado, for instance, earned $135 million in 2015 from $996 million sales. Sales are expected to top $1 billion in 2016 in Colorado alone.
The U.S. Drug Enforcement Agency (DEA) is currently conducting a review, looking into rescheduling marijuana from schedule 1 to 2. As a schedule 2 substance new doors could open to the cannabis industry.
The major change for the cannabis industry might lie in the hands of the next elected president.
Hillary Clinton on marijuana politics.
Hillary Clinton laid out a clear three-step plan on her campaign website to tackle marijuana if she becomes the next president.
Number one: is to focus on violent crime. Too many current arrests focus on marijuana. She believes regulation changes could save money and make the US a safer place.
Number two: is to allow states that have enacted cannabis laws to act as “laboratories of democracy”. This is the current hands-off approach, which allows states to govern their own issues if they choose to legalize marijuana. The prerequisite being that it should stay out of the hands of minors and keep crime rates under control.
Number three: and the most important to marijuana business: she wants to reschedule marijuana to schedule 2 to lift medical restrictions on the research done on cannabis.
Donald Trump on cannabis politics.
Trump has no concrete plan to regulate cannabis but spoke almost over-eagerly on legalizing medical marijuana since the beginning of his campaign. When Fox News pressed him for his opinion on medical marijuana his answer was that he is 100% for it being approved.
In the same interview by Fox News, when asked about recreational use, he pointed out positive and negative data from Colorado and said additional research was required. He didn’t rule out the idea of recreational marijuana being legalized at federal level at some point in the future. It seems Trump would also allow individual states to continue regulating their own recreational cannabis industries.
Clinton or Trump?
Surprise, surprise, when Marijuana Business Daily asked which candidate they’d prefer to see in office, 724 cannabis business professionals across the USA had no doubt.
Findings of the poll showed, 43% of cannabis professionals were in favor of Clinton compared to 26% for “The Donald.” 16% prefer Libertarian Party candidate Gary Johnson, and the rest were undecided. The choice of cannabis industry investors showed 46% favored Clinton and 38% were in favor of Trump.
The Marijuana Business Daily suggested that the more progressive history of the Democratic Party towards marijuana legislation probably swayed the polling results.
If marijuana were rescheduled, it would signify recognition for its medical benefits and open avenues for medical research.
The not-so-obvious problem is that if marijuana became schedule 2, it would allow tight regulations by the Food and Drug Administration (FDA). Not only would the FDA have a say on packaging and marketing but also on manufacturing. This could make life difficult and complicated for marijuana businesses.
The FDA would expect businesses to run full clinical trials, which is very costly and would put most small operators right out of business. The risk to investors considering the conundrum is just too great. Until there is more certainty, no one is advised to invest in marijuana stocks.
Have your say
Would the regulation that comes with rescheduling be a good or bad thing for medical cannabis users? Already, cannabis companies are discouraged from making unproven medical claims. Would rescheduling really shut down medical marijuana dispensaries?