Vice President Kamala Harris’s Cannabis Stance: Promises and Pragmatism
Vice President Kamala Harris’s recent endorsement of cannabis legalization on the “All the Smoke” podcast has reignited the debate surrounding federal cannabis reform. While her pro-cannabis stance is clear, industry leaders express cautious optimism, questioning whether her administration’s actions will match her rhetoric. Despite promises of reform and a shift towards rescheduling cannabis from Schedule I to Schedule III, the path to full legalization remains riddled with delays and uncertainty, leaving investors and industry stakeholders in a state of anticipation.
Key Takeaways: A Cautiously Optimistic Outlook
- VP Harris’s renewed push for legalization: Her public statements underscore a commitment to ending cannabis prohibition.
- Industry skepticism despite political support: While both Democratic and Republican presidential candidates now support federal reform, the industry remains wary of unfulfilled promises.
- Slow progress on rescheduling: The Biden administration’s plan to reschedule cannabis to Schedule III faces delays, pushing the timeline for meaningful change into the future.
- Market reaction: The cannabis market, while boosted by bipartisan support, faces lingering challenges like limited banking access and state-level sales performance issues.
- Uncertain future: The path to full federal legalization remains unclear, despite increased political momentum. The impact of either a Harris or Trump presidency on meaningful change remains to be seen.
Harris’s Public Commitment to Legalization
In a recent interview with the “All the Smoke” podcast, Vice President Harris unequivocally stated, “I just think we have come to a point where we have to understand that we need to legalize it and stop criminalizing this behavior.” This statement marks a significant reiteration of her long-held pro-cannabis position, previously expressed during her 2020 presidential campaign where she championed legislation to decriminalize and tax cannabis at the federal level.
Industry Reactions: Cautious Optimism and Demands for Action
While the Vice President’s words are encouraging to many in the cannabis industry, several key figures voice a need for tangible action beyond rhetoric. Jason Wild, executive chairman of TerrAscend, expressed this sentiment, stating, “I am encouraged by Vice President Harris’s support for cannabis legalization; however, we need real action, not just rhetoric. I hope this time around, these campaign promises aren’t just soundbites but will lead to tangible change.” This sentiment reflects a broader unease within the industry, stemming from past promises of reform that have yet to fully materialize.
The Slow Pace of Federal Cannabis Reform
Brady Cobb, founder of Sunburn Cannabis, highlights the slow progress of federal reform, questioning whether Harris has actually been the more pro-cannabis candidate. He points to the ongoing process of rescheduling cannabis, stating, “While rescheduling has advanced, and if adopted it would mark the largest incremental step forward in federal cannabis reform to date, the fact remains that it is not completed.” This delay underscores the complexities and political challenges inherent in achieving comprehensive federal cannabis legalization.
Rescheduling and its Implications
The Biden administration’s proposal to reschedule cannabis from Schedule I to Schedule III, while significant, has been met with delays. The Drug Enforcement Administration (DEA) postponed a crucial hearing on the proposed rule change until December 2nd, after the election. This postponement further fuels industry anxieties, leaving investors and businesses in a state of limbo, uncertain about the timeline for realizing the benefits of rescheduling, which would significantly impact research, medical access, and overall market dynamics. The public comment period, which concluded in July with over 43,000 comments submitted, highlights the significant public interest and potential influence of public opinion on the ultimate outcome.
The Investor Perspective: Hope and Uncertainty
The cannabis investment community is keenly watching developments, hoping for clarity on future proposals. Emily Paxhia, co-founder of Poseidon Investment Management, emphasizes the need for further details, stating, “We would welcome to hear more from the Harris campaign on how they envision reform on this issue, as several paths need to be improved, including banking and capital markets reform.” Access to traditional banking and capital markets remains a major hurdle for many cannabis businesses, hindering growth and expansion.
Market Response to Political Signals
The AdvisorShares Pure US Cannabis ETF (MSOS), a key indicator of market sentiment, saw a 12% rise following Donald Trump’s surprising announcement of his support for cannabis legalization, reflecting a broader belief that bipartisan support for the issue is a catalyst for federal legalization. This illustrates the market’s acute sensitivity to political dynamics and its belief that federal legalization is inevitable.
However, even with the heightened political interest, some maintain a more realistic view. Bernstein analyst, Nadine Sarwat, acknowledges while political support is bullish, “Despite all the headlines regarding potential federal reform, state-level sales performance is sobering.” This sober assessment highlights the enduring challenges within the cannabis industry: inconsistent state-level regulations, macroeconomic factors, and the reality that even with significant political support, economic realities must be carefully considered to understand future progress.
Trump’s Shifting Stance and its Market Impact
Donald Trump’s recent shift in stance regarding cannabis has added an interesting dimension to the conversation. Traditionally advocating for states’ rights on the issue, Trump recently announced that if re-elected, his administration “will continue to focus on research to unlock the medical uses of marijuana to a Schedule 3 drug, and work with Congress to pass common sense laws, including safe banking for state authorized companies, and supporting states rights to pass marijuana laws.” This statement, coupled with his declaration that he will vote ‘yes’ on Florida’s recreational cannabis legalization ballot measure, represents a significant departure from his previous position.
Comparing Harris and Trump’s Approaches
While both presidential candidates now express support for cannabis legalization, the approach and commitment are perceived differently by industry leaders. Cobb argues that, “Trump did not move the ball on cannabis either during his time as president, so they [Trump and Harris] are very much equal on this issue from my vantage point.” This perspective highlights that voters need to carefully consider what each specific candidate will realistically achieve. This highlights the need to examine implementation plans in comparison to solely the broad support of federal cannabis reform.
The Path Forward: A Long Road to Legalization
While the renewed political momentum surrounding cannabis legalization is encouraging for the industry, the path to full federal legalization remains uncertain and prolonged. Delays in rescheduling, concerns about access to banking and capital markets, and the need for consistent state-level regulations create significant hurdles. Both the Harris and Trump campaigns signal support for federal cannabis reform, making this issue a key part of the national conversation. However, investors and industry stakeholders must approach the situation with a balanced view, acknowledging substantial progress while also recognizing the significant challenges that lie ahead in achieving true national legalization.
