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Will Biden and Harris Be a Benefit to These Pot Stocks?

The upcoming U.S. election will have a lot of effects on marijuana stocks and the cannabis industry. While U.S. pot stocks like Scotts Miracle-Gro Inc. (SMG Stock Report) and Innovative Industrial Properties Inc. (IIPR Stock Report), will see a change, Canadian pot stocks will also potentially benefit. Under President Trump, we have yet to see any major shifts in how the cannabis industry runs. But, if Biden and Harris are elected, we could see the cannabis industry reach new heights in the near future. This is because the pair seem to support legislation that backs the cannabis industry.

On day one, Kamala Harris has stated that they will decriminalize cannabis. After she announced this, the cannabis industry shot up by around 10% in value during the next trading day. While this could be just an empty campaign promise, it does seem likely that the two would do so given their past. In addition, while we do know U.S. marijuana stocks would benefit, Canadian cannabis stocks could see a boost as well. This boost may not be felt immediately, but rather in the long term of the cannabis industry. With this in mind, let’s take a look at two marijuana stocks to watch that could benefit from the upcoming election.

A Major Canadian Pot Stock to Watch: Aurora Cannabis Inc.

Aurora Cannabis Inc. (ACB Stock Report) is one of the largest marijuana stocks in the industry. After the U.S. government passed the Farm Bill two years ago, Canadian cannabis companies were effectively able to move into the U.S. market. In May of this year, ACB stock shot up in value after announcing that it had completed its $40 million acquisition of Reliva. For those who don’t know, Reliva is a CBD product retailer based out of the U.S. Although this in itself is not a reason to invest in ACB stock, it does present an interesting opportunity for ACB in the long term.

Progressive Alexandria Ocasio-Cortez shared her feelings on a bipartisan path towards the legalization of marijuana in the United States at a recent virtual town hall alongside Representative Earl Blumenauer. 

According to Representative Ocasio-Cortez, popularly abbreviated as AOC, the gap between Republicans and Democrats on the issue of cannabis has been decreasing recently in Congress, as well as on a few other matters, namely civil rights and civil liberties policies. 

“We’ve been able to propose solutions on a wide spectrum towards decriminalization, towards legalization, and that is increasingly becoming a position that more Republicans are amenable to,” AOC said. 

To support her claims, Ocasio-Cortez pointed to a recent amendment of hers that sought to divert millions in funding from the Drug Enforcement Administration (DEA) towards treatment programs for people suffering from opioid addiction. The congresswoman said she was “surprised” to discover “widespread” support from the GOP for her proposal.   

“That’s defund before defund became a widespread demand that we heard this year, and Republicans supported it and it passed. So there are some areas where you can find common ground,” the representative explained. 

While ruby red South Dakota may not be a swing state in the presidential election -- it may be at the forefront of the green revolution as one of five states where recreational and medical marijuana legalization are up for a vote this election year.

And it is the only state where both forms of legalization will be on the ballot.

Matthew Schweich, the deputy director of the nonprofit group the Marijuana Policy Project, which has been running campaigns across the country to legalize, told ABC News this is the first time in U.S. history that a state has had two ballot measures to ask voters for approval for recreational and medical marijuana during an election year.

While there is some opposition from Republican Gov. Kristi Noem and South Dakota business owners over the recreational ballot, Schweich noted that more than 50,000 residents signed on to that initiative and more than 30,000 signatures for the medical provision.

Compliance is a beast with many tentacles — it’s way more than just inventory tracking.

For cannabis cultivators, it can be easy to get tangled and tripped up in the bureaucracy. 

And things can quickly go sideways if a business isn’t responsive and professional when a regulatory agency flags an issue.

Officials in charge will likely wonder what other problems are brewing and take a closer look. 

It’s all too easy for minor infractions to become major (and expensive) headaches that pull you away from what you need to be doing to keep your business on an upward trajectory.   

Germany has the largest legal medicinal cannabis flower market in the EU, and it’s about to expand out even further. With imports coming from Canada and even Uruguay, the German cannabis flower market is, indeed, ready to fully explode.​

Germany has been growing its medical cannabis market in the last few years. According to worldstopexports for 2019, Germany imported $240 million worth of cannabis oil – or 7.8% of all cannabis imports for the year, making it the second largest importer behind the US. In that same time period, it also exported $230 million worth of cannabis oil – or 8% of the market for the year.

Now, the emphasis is more on cannabis flowers, and Germany sure isn’t slowing down. In July, Germany released data on medical cannabis imports for Q1 and Q2 of 2020. Q1 showed an increase of 16%, while Q2 showed an increase of 32%. It should be remembered that Q2 of 2020 was when the coronavirus was at its worst, and lockdown measures were strictest.

Prior to this year, Germany imported approximately 3.1 tons of cannabis flower in 2018, and 6.7 tons in 2019. During this time, Germany requested additional imported cannabis from the Netherlands to help with supply shortages it was experiencing. The increase this year in imports is related to the rise in new patients in Germany, as well as the addition of new cannabis exporting countries. Approximately 60,000 Germans are registered to use medical cannabis as of June 2019. That number has likely risen substantially since that time.

A little about Germany and cannabis

Possession of cannabis is still illegal in Germany, despite the growth of its medicinal market.  German law does allow for residents to have a ‘small amount’ of cannabis, but this amount is not consistent and can vary between 6-15 grams depending on location. Sale and supply crimes are predicably illegal, with prison sentences of five years or below for more standard cases, or up to 15 for more severe cases. Personal growing of cannabis is also illegal.

Wednesday afternoon, the Pennsylvania state House passed a bill amending the state’s existing DUI law to decriminalize driving while traces of marijuana are still in the system of legal medical-marijuana users.

In Pennsylvania, the current laws and provisions related to driving while under the influence of alcohol or substances, aka DUI, criminalize driving while tetrahydrocannabinol (THC), a component of marijuana, is still in a driver’s system, even if it has been weeks after ingestion. This currently also applies to those with medical-marijuana cards.

“I think you can ask any veteran or anybody that’s using medical cannabis that if they took a prescription on Monday, [by] Wednesday they’re not high and if they got pulled over, they darn sure shouldn’t be charged for being intoxicated or under the influence of medical marijuana and the last time they took it was Monday,” said state Rep. Ed Gainey (D-East Liberty) on the state House floor on Oct. 21.

The act amended this provision on grounds to decriminalize residual traces of THC left in the system of legal marijuana users. The amendment was introduced by state Rep. Mike Carroll (D-Luzerne). It passed 109-93 with unanimous support from Democrats, and 16 Republicans crossing the aisle, including local state Rep. Mike Puskaric (R-Elizabeth)

Moreover, the amended bill states that an individual may not drive under a controlled substance with the exception of “marijuana used lawfully in accordance with the act of April 17, 2016, known as the Medical Marijuana Act.”

Medical marijuana dispensaries are starting to open in Missouri. It may take a little longer in Columbia. 

N'Bliss dispensaries in the St. Louis area saw long lines when they opened over the weekend. A Kansas City area dispensary was to open Monday. 

Six different companies plan to open dispensaries throughout Columbia. As of Wednesday afternoon, they were not yet approved to operate.

Calls and emails were sent to all six, with GRD Columbia LLC, Shangri-La, COMO Health LLC and QPS Missouri Holdings LLC responding. 

GRD will be located at 204 E. Broadway near Walgreens, operating as Green Releaf Dispensary. The facility still is under construction, CEO Jay Patel said. 

Marijuana is back on the ballot for the third time in the last five election cycles. But this year, Montanans will decide for the first time whether to follow states like Colorado and Washington in legalizing use for all adults.

The issue comes in the form of complementary ballot initiatives I-190 and CI-118. I-190 creates the rules for a recreational marijuana system in Montana, including a 20% tax. It also allows each county the option to prohibit dispensaries in their county.

CI-118 would amend the Montana Constitution to allow the state to set the minimum buying age to 21. If both pass, Montana would join 10 other states and the District of Columbia in legalizing recreational marijuana.

New Approach Montana, a group founded in January 2019 by Montana political veterans Ted Dick and Pepper Petersen, is running the pro-legalization effort. After seeing a decline of tax revenue from previous economic drivers like energy production and mining, the two men asked Montana’s Office of Budget and Program Planning to study the economic benefits of legalized marijuana. The office estimated that retail taxes on recreational marijuana could generate upward of $38.5 million a year by 2025.

“This is a substantial amount of funding,” Petersen said, adding that the next steps were clear. “We wrote our own law — we have a uniquely Montana approach.”

After wading through a raft of comments from municipal leaders, established industry players and advocates, marijuana regulators on Tuesday ironed out the final wrinkles of their plan to establish a structure for home delivery of marijuana and create new business opportunities -- and rejected a proposal to delay delivery until 2023.

Home delivery of marijuana has long been allowed under the state’s medical marijuana program, and advocates pushed for a delivery-only license in the recreational market, arguing that it will help level the playing field between large corporations and small businesses because the barriers to entry for delivery are typically far less burdensome than those for retail licenses.

The Cannabis Control Commission has been thinking about a delivery framework for almost three years and will launch delivery with a period of exclusivity for participants in the CCC’s Social Equity Program and certified economic empowerment applicants.

“Consumers want delivery, we wanted delivery for a long time, and equity and economic empowerment businesses are ready to be a significant part of this market,” Commissioner Shaleen Title said. She added, “We as a commission have taken it very seriously since day one ... to live up to this mandate to include disproportionately harmed people in the industry and today was another significant step towards that. I’m really looking forward to it becoming reality sometime next year.”

The CCC met Tuesday morning to consider feedback and hold a final discussion about its draft delivery policy, which would create two delivery license types: a “wholesale delivery license” that could buy products wholesale from growers and manufacturers and sell them to their own customers, and a “limited delivery license” that would allow an operator to charge a fee to make deliveries from CCC-licensed retailers and dispensaries.

The U.S. Department of Agriculture has approved the Industrial Hemp Plan submitted by the South Dakota Department of Agriculture. The department is currently working to promulgate emergency administrative rules to establish a program in accordance with state law and the USDA approved plan. South Dakota Farmers Union Lobbyist Mitch Richter is pleased it’s moving forward as his group has been pushing for this plan for some time.

He says while there won’t be a huge number of acres of industrial hemp planted, there will be some farmers who will want to try growing the crop.

Richter says another positive for farmers being allwed to grow industrial hemp is the spin off economic development it will create.

Richter says it’s critical farmers wanting to grow industry hemp check with the State Agriculture Department and follow all their rules before proceeding. They also need to make sure they use only certified seed.

The hemp industry contends the Interim Final Rule is unlawful because it exceeds the DEA’s authority and violates the Agricultural Improvement Act, among other things.

The Canna Law Blog has been writing about the Drug Enforcement Agency’s (DEA) interim final rule (IFR) on hemp since its August publication in the Federal Register:Most recently, Nathalie Bougenies wrote about a petition for review against the DEA filed by the Hemp Industries Association and RE Botanicals in the United States Court of Appeals for the District of Columbia (the “D.C. Circuit”). Why the fuss? As Nathalie explained, the IFR:

suggests that in-process hemp shall be treated as a schedule I controlled substance during any point at which its THC concentration exceeds 0.3 percent on a dry weight basis. ‘Any point’ includes even fleetingly during the processing phase and includes situations where the THC percentage is brought back into legal compliance for the finished product.

So will the DEA start raiding hemp processors? Who knows, but the implications are not good and led to the hemp industry making a concerted effort against the IFR. One such effort is the petition for review, which contends the IFR is unlawful because it exceeds the DEA’s authority, violates the Agricultural Improvement Act of 2018, and contends that the DEA violated the regulations governing the promulgation of rules set forth in the Administrative Procedures Act (“APA”).

This week, the hemp industry opened a new front against the DEA and the IFR. On October 12, Petitioners in the D.C. Circuit filed a separate lawsuit against the DEA in the United States District Court for the District of Columbia. This is the “trial court” for Washington D.C. as opposed to the appellate court, the D.C. Circuit, in which the petition for review was filed. (Email me if you’d like a copy of the Complaint).

The tally of cannabis seizures at the Peace Bridge running between Canada and the U.S. increased yet again last week when U.S. border officers in Buffalo discovered a commercial shipment with more than a ton of weed.

An internal inspection of a commercial shipment of 20 pallets revealed 2,145 vacuum-sealed packages of cannabis weighing 2,410 pounds (1,093 kg), according to U.S. Customs and Border Protection (CBP). The haul was estimated to have a street value of north of US $8 million.

The seizure is being investigated by Homeland Security Investigations (HIS).

Staff efforts and an enforcement-focused approach “have produced record-setting results for narcotics seizures within the Buffalo Field Office,” which covers 16 ports of entry throughout New York State, port director Jennifer De La O says of the Oct. 15 seizure.

Over the last couple of months, multi-million-dollar cannabis seizures in Buffalo have included 3,836 pounds (1,740 kg) of weed, 250 kg of dried cannabis flower and 505 kg of weed manifested as office furniture.

A state district judge cleared the way for hundreds of patients to be re-authorized to participate in New Mexico’s medical marijuana program.

The ruling stemmed from a challenge of a mandate issued in September and a subsequent emergency rule adopted by the state health department just weeks later that placed additional requirements on some patients with medical marijuana cards from other states.

Ultra Health, the state’s largest cannabis company, asked the court to step in. It argued that the agency overstepped the intention of the state Legislature and created more hurdles for patients seeking to gain reciprocal admission into the New Mexico program.

Judge Matthew Wilson said the agency’s justification for adopting the emergency rule in early October was inadequate and therefore unenforceable.

“It’s important to patients who were already part of the program and got it taken away and patients who are in need of access. This was their only hope,” said a patient advocate.

Read entire article at Benzinga

The United States continues to have the largest prison population globally. Some 2.1 million Americans were incarcerated as of November 2018.

On the federal level, marijuana sentencing has dropped sharply in recent years. Just 92 individuals were sentenced for possession in 2017.

Yet according to Federal Bureau of Investigation data, officers on the state level made roughly 663,000 marijuana-based arrests in 2018, totaling 40% of those arrested for drugs that year.

Possession accounted for 92% of those arrested in 2018.

On 18 September 2020, the Financial Conduct Authority (FCA), the securities regulatory authority in the United Kingdom, released long-awaited guidance for cannabis companies considering a listing in the United Kingdom on a regulated market, such as the Main Market of the London Stock Exchange. Whilst preliminary in nature and subject to further consultation, the guidance is welcome news for UK investors and suggests increasing openness by UK regulators to the medicinal cannabis sector.

Since the reclassification in 2018 of cannabis under the Misuse of Drugs (Amendments) (Cannabis and Licence Fees) (England, Wales and Scotland) Regulations 2018, cannabis can be prescribed by specialised medical professionals based in the United Kingdom in certain circumstances. However, the recreational use of cannabis remains illegal in the United Kingdom.

Notwithstanding that cannabis for medicinal purposes was decriminalised in 2018, companies engaged in medicinal cannabis activities (or which have exposure to proceeds therefrom) which have sought a listing in the UK have encountered many inquiries from the FCA in relation to the UK Proceeds of Crime Act 2002 (PoCA) (discussed in more detail below).

The FCA Approach

In the recent guidance, the FCA sets out the circumstances in which it would admit a cannabis-related company for listing on the Main Market of the London Stock Exchange in the United Kingdom. The guidance does not apply to companies seeking to list on Alternative Investment Market (AIM) but it is expected that a similar approach will be adopted by AIM.

FARMERS IN Ireland are set to ask the government to legalise medical cannabis so they may become 'major players' in the cultivation of the plant.

The Irish Farmers Association are set to ask the government to consider legalising access to cannabis for medicinal reason, which would allow the plant to be grown by farmers in the Irish countryside.

The trade is growing quickly worldwide,and some countries, such as Canada and the United States, have legalised it for recreational use for those over the age of 18.

The IFA have asked the Department of Health for a meeting on the matter of medical cannabis, with a letter to the department implying Ireland could become a 'major player' in the production of the plant on an industrial scale.

In the letter, seen by The Sunday Times, IFA representative Fintan Conway said there was huge potential in the market for "industrial hemp, CBD oil and medicinal cannabis" thanks to Ireland's temperate climate and soil type.

Last week, California Governor Gavin Newsom (D) signed a handful of cannabis-related bills into law. Among the biggest changes are updates to the state’s banking laws, and while overall positive, the potential of AB 1525 is severely limited.

As anyone in the industry already knows, cannabis professionals have long struggled to gain access to banking and other financial services for their businesses. AB (Assembly Bill) 1525, signed last Tuesday by Gov. Newsom, removes any penalties previously imposed on banks for working with legal cannabis companies.

In his signing statement on the banking bill, Newsom directed state cannabis regulators to establish rules meant to protect the privacy of marijuana businesses that seek financial services, urging that data be kept confidential and is used only “for the provision of financial services to support licensees.”

“This bill has the potential to increase the provisions of financial services to the legal cannabis industry,” Newsom wrote in a signing statement, “and for that reason, I support it.”

Very Little Help

Newsom isn’t not wrong, this bill definitely has that potential, but it remains only that until cannabis becomes legal at the federal level. Regardless of state laws, banks, which are federal entities, have been hesitant to work with cannabis clients because the plant’s Schedule 1 status.

For reference, a Schedule 1 narcotic is categorized that way because there is a “high risk of abuse and no recognized medical value.” Despite the decades of research in other countries or the fact that medical cannabis is accepted in 33 states already. It’s also worth mentioning Cocaine, which has some anesthetic properties but is known for its high propensity for abuse, is categorized as Schedule II. Alcohol and tobacco aren’t scheduled at all. Yes, it’s the ultimate hypocrisy.

Chris Leanzo didn’t have any experience in farming when he put 155 hemp plants into the ground this June.

One of the first 59 farmers to receive a license to grow hemp in New Jersey, Leanzo mentally prepared to only harvest 20 plants this fall from his Frelinghuysen, Warren County farm. But even after facing spider mites and inch worms as well as a dry and cold September, the farm may net some 50 pounds of hemp from its 130 successful plants.

That far surpasses his cautious estimates, and could have him making a profit on their first season.

But as the state eyes marijuana legalization via a ballot question this November, the promise and struggles of hemp farming have become secondary to New Jersey’s race to become the first state in the region to offer legal marijuana. That industry is expected to bring hundreds of millions in tax revenue as well as new jobs.

“As small farmers, we all share this unified struggle of fear of losing the market before we had a fair share of even getting it,” Leanzo said.

A new report from the Cannabis Council of Canada, which represents some of the country’s largest licensed producers, including Canopy Growth, Tilray, and Cronos Group, has graded the government’s performance over the first two years of legalization with a ‘C’ average.

Led by president and CEO George Smitherman, the former Minister of Health, the council seeks to be a national voice for producers, focusing on the development, growth, and integrity of the legal industry. The report card was informed by a national survey of 2,000 Canadians.

As part of that focus, the council has released a legalization report card, offering grades on 10 issues, including cannabis amnesty, medical patient access, and the efforts to combat the illicit market.

Support for cannabis legalization: B+

Public support for legalization has remained robust and consistent, the report says, with the percentage of Canadians who oppose the legal industry dropping modestly year-over-year to 24 per cent.

Keeping cannabis away from children and youth: B+

Citing Statistics Canada, the report states that cannabis use among 15- to 17-year-olds fell by nearly 10 per cent in the first year of legalization. Reducing youth access to cannabis was one of the core planks of the Cannabis Act.