Will Joe Biden’s Presidency Mean High Growth For Cannabis Stocks?

It’s one of the most divisive topics in investing, but could cannabis stocks be on the verge of massive growth following the 2020 election?

Nov. 24, 2020

The cannabis industry is a divisive one for investors. Previously touted as the biggest megatrend of our lifetime, growth in the U.S. began with 2012’s recreational legalization in Colorado and Washington. 

Fast-forward to 2020 and Marijuana is legal for all adults in 11 states, and for medical purposes in 34. Just this month, Arizona, Montana, New Jersey, and South Dakota approved ballot measures to legalize recreational cannabis, with South Dakota becoming the first state to legalize recreational use without first legalizing medical use.

The most important news for cannabis investors though is without a doubt the results of the 2020 U.S. Presidential election, which has seen Democratic candidate Joe Biden become president-elect. Since these results earlier in November, cannabis stocks have soared, including the Amplify Seymour Cannabis ETF, which is up 23% since the results were announced.

It’s pretty simple really. 

Joe Biden has officially taken a favorable stance on cannabis legislation. Per his 110-page term outlook document released back on July 9, his platform outlined three main cannabis-related plans:

  1. Support federal legislation for medical marijuana. 
  2. Let states decide on recreational cannabis. 
  3. Decriminalize marijuana use and change the drug’s schedule classification via executive action.

In that time, New York Governor Andrew Cuomo has also pushed aggressively for approval of recreational cannabis.

All of these plans bode well for U.S. cannabis growth, especially the new regulations allowing states to make their own decisions on recreational cannabis. The plan reads as if the federal government will approve cannabis via the passage of a bill such as the STATES act, which would give cannabis companies access to the banking system.

There are still a lot of risks surrounding pot investing, but with states not only continuing to legalize cannabis use, but using revenues from it to “plug holes” in their budgets, pot plays could be close to reversing the vicious bear market they’ve been in for the last year. 

Can the cannabis industry step out of its funk under Biden, or is this just another dangerous fad? We covered the dangers of ‘fad’ investing in our Daily Insight for MyWallSt subscribers here.

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MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here