This month saw a watershed moment in the cannabis industry. The House of Representatives approved the MORE Act, a bill that would end the federal prohibition of cannabis.
The bill officially passed by a vote of 228-164.
It’s the first significant congressional action on marijuana since the passage of the Marihuana Tax Act of 1937, which federally criminalized all aspect of cannabis production, sale, and possession.
And if legislation continues like this under the new Biden presidency, we could see legal cannabis in all 50 states.
It would be revolutionary for cannabis investors…
Here’s what the MORE Act would do, as explained by Bruce Barcott at Leafly:
- Remove cannabis from the list of federally controlled substances, as defined by the Controlled Substances Act of 1970. This would effectively take the federal government out of the marijuana criminalization game and allow each state to control cannabis as state leaders see fit — which is how alcohol is handled.
- Establish a federal excise tax on legal cannabis, starting at 5% and rising to 8% over the first five years after implementation.
- Reinvest some of that tax revenue in communities most adversely affected by the drug war.
- Establish a federal Small Business Administration loan program for people from communities most affected by the drug war.
End the nightmarish application of IRS rule 280E to legal cannabis companies, [which forbids businesses from deducting otherwise ordinary business expenses from gross income associated with the “trafficking” of Schedule I or II substances, as defined by the Controlled Substances Act].
- Expunge and seal federal marijuana arrests and convictions.
- Require the federal Bureau of Labor Statistics to regularly publish demographic data on cannabis business owners and employees.
Essentially, the bill would completely normalize the cannabis business, allowing companies to function like any other business would. Its passage would ensure billions of dollars in taxes and create countless thousands of jobs — both of which are badly needed right now.
The only question now is whether Mitch McConnell and the Republicans will maintain control of the Senate. McConnell has already displayed his opposition to getting any cannabis legislation done in the Senate. If Democrats take Georgia, every cannabis-related bill will be pushed through.
Even if Republicans hold on, the writing is already on the wall. Five more states have now legalized marijuana for adults: New Jersey, Arizona, Montana, and South Dakota recreationally and Mississippi medically.
New Jersey is large enough alone to move the needle in terms of the market’s scale and reach.
Expect New York and Pennsylvania to follow New Jersey’s lead next year…
The MORE Act is already a huge step toward ridding cannabis of its ridiculous federal Schedule I status alongside drugs like cocaine and heroin.
The ball keeps moving down the field, and it’s only a matter of time before enough Republicans start listening to their constituents and pass a very reasonable, long-overdue reclassification. There are too many jobs and too much tax revenue on the table to be partisan right now.
2021 should be the single biggest year for the cannabis market — and cannabis stocks — that we’ve ever seen. Cannabis sales hit a record $18 billion this year, an almost 40% increase. Experts are predicting $24 billion in 2021 — without factoring in federal legislation or new markets.
If Congress can move at all on the issue, that number will skyrocket.
I’ve identified my pick for a U.S. cannabis explosion next year.
