Industry insiders believe Democrat-held Congress would likely take up the SAFE Banking and MORE Acts, generating long-term market effects.
Despite ongoing attempts by the Trump Administration to delay the transition, President-elect Joe Biden and Vice President-elect Kamala Harris are expected to take power on January 20, 2021, creating an impact on the cannabis stock market that could be substantial.
A Biden/Harris presidency could prove beneficial for a surging cannabis reform movement and its market after a clean sweep across five states on Election Day. Still, financial and legal experts point out that cannabis reform relies on more than the White House. As such, a delay in both reform and market impact could occur.
Power, Potential Reform Remains In The Balance
The Biden White House should provide the marijuana market a bump of some form. However, its scope hinges on Biden, a decriminalization proponent, and the U.S. Senate’s power, which remains in limbo until January when two runoffs in Georgia are held.
The results will determine if the Democrats control both chambers of Congress or Biden’s opposition from cannabis opponent Mitch McConnell.
“We will see a positive bump due to the Biden/Harris win, but a Democratic Senate will be critical to effectuating any big changes such as the MORE Act,” said Matt Hawkins, founder and managing partner of Entourage Effect Capital.
Jonathan Storper, a partner at Hanson Bridgett and leader of its Cannabis Law practice, said a Biden decriminalization plan would provide modest increases in market support if implemented. However, he does not expect the market to receive much of an early impact due to other pressing matters in the world. He did, however, say that an executive order from Biden could provide an early market impact.
Storper believes a Democrat-held Congress would likely take up the SAFE Banking and MORE Acts, generating long-term market effects. He predicted that Biden would at least support SAFE banking, if not both acts.
“This support could also enable more research and development of drugs and other therapeutics using CBD and THC,” he said of the potential impact.
The Presidency and Senate remain in various stages of doubt. Hawkins said that if investors want to focus on policy, then January’s runoffs in Georgia are crucial to gauging what may happen in the 117th Congress.
Upward Market Momentum Regardless
Both Hawkins and Storper predict continued cannabis momentum regardless of the results.
“We will see continued positive momentum simply because of how companies are performing, which is unrelated to what’s happening in Washington,” said Hawkins, crediting an overall positive perception of legalization around the country as the driving factor.