The U.S. marijuana market has reached some major milestones in the last few months, with profits geographically and politically extending from New York to South Dakota. Even where there are hiccups — for example, in Mississippi, where last year’s medical marijuana plan was overwhelmingly approved by voters, it now faces some legal hurdles — not reversing these tides. Choosing state-by-state successes has not yet translated into big stock-price gains for US companies, but that is about to change.
The recent surge in marijuana precedence marks a big moment in the horizon: the Comprehensive Cannabis Reform Bill. It was an effort led by Democrat senators Chuck Schumer, Ron Wyden and Corey Booker. The traditional political advocacy group founded by the Koch brothers — especially for Americans who have approved the legalization of marijuana — should not be considered partisan. In addition, 91% of Americans, including a large number of Republicans, say the pot should be legal in some form, according to the Pot Research Center.
The easing of federal laws will allow U.S. cannabis companies to attract investor money raised by Canadian growers in recent years and grow the industry in ways that are currently not possible. It starts with the Safe Banking Act, which was passed last week in the U.S. House of Representatives with bilateral support. The Senate is unlikely to take it for a vote, but don’t consider it a setback. This is the policy plan of the Democrats who do not want to see America’s great start of Cannabis Inc.
To understand that, it is important to first understand the specifics of investing in cannabis companies.
The biggest names that have US stock tickers are actually Canadian businesses — Africa Inc., Canopy Growth Corp and Tilrey Inc. Their American rivals — Curlif Holdings Inc., Green Thumb Industries and TrueLeave Cannabis Corp. — are sent to Canadian exchanges or over-the-counter trading because at the U.S. federal level the PAT is still illegal and the listing standards maintained by New York are listed on the Stock Exchange and Na. This gives Canadian operators an advantage in capturing investor enthusiasm for the lucrative growth opportunities that marijuana offers, as evidenced by their angular values.
The Safe Banking Act allows banks to do business with marijuana companies, which also opens the door for US companies to be listed on the American Stock Exchange. Gradually, Canadian companies could use their relatively rich stock prices to earn marijuana businesses in the US where their customers have market prices.
However, Schumer told the Marijuana Movement last week that he did not want to leave small businesses and minority-owned businesses because the pot encourages new-class millionaires and billionaires: “We need to make sure there are re-investment programs. Not everyone goes to the big shots.” It does not allow to take into account that the great price paid here and get some reward. “
Instead of traveling safely in a vacuum, Schumer concludes key elements of the “bills bill” that includes a broader marijuana version that will help draft, which will help win the support of Republicans, Pablo Juanic Fitzgerald, analyst for Cantor, wrote in a note to clients. The plan may also include measures to eliminate low-level marijuana violations from public records and to reinvest cannabis tax money back into categories that need it.
Another important provision in the Controlled Substances Act is to re-classify marijuana, where it is listed as a Schedule 1 drug, along with heroin, as the most serious class. In October, Compass Point Research & Trading analysts demonstrated how meaningful the cannabis schedule is for the lower tier of marijuana companies, which are currently banned from cutting certain business expenses for tax purposes.
Lifting those profit barriers and paving the way for public offerings in America will attract a flood of investment, including by creating connectivity for institutional investors.
But payments are great with a reform that takes a broader and more equitable approach, rather than being implemented with a bill that focuses on banking. This will take longer.
Tara Lachapelle Bloomberg Opinion columnist, business of entertainment and telecommunications, as well as extensive deals.