While plenty of issues separate the candidates in this year’s presidential election, pot legalization isn’t necessarily one of them.
While not a top tier election issue, legalization was in the spotlight this week as House Democrats prepared for, and then ultimately postponed, a vote on the MORE Act. That bill, which calls for federal legalization of marijuana and expungement of some pot-related criminal records, is unlikely to be voted on before the Nov. 3 election.
The vote was pushed back after moderate Democrats reportedly worried it could hurt their chances at the ballot box.
Regardless of the validity of those concerns, multiple people close to the industry don’t see marijuana playing a large role in this year’s race between President Donald Trump and Joe Biden, his Democratic rival. Further, they said they don’t expect the results to significantly alter the legalization landscape.
Garrett Graff, an attorney with Hoban Law Group, which represents cannabis businesses, is among those skeptical that either candidate will bring major change for the industry. He argued the makeup of Congress and the Senate will likely matter more.
“Neither of them can necessarily, or is likely to, act without there first being a vote and approval by the House and Senate [on a potential legalization bill],” he said. “Because I suspect that that’s unlikely in the near term, I suspect that legalization at the federal level is probably a few years away, potentially as a political chip to be used leading up to the 2024 election.”
Before the pandemic steamrolled the political landscape, many insiders believed marijuana would play a major role in this year’s presidential race.
Biden and his running mate, Kamala Harris, have both expressed opposition to federal legalization in the past, but Harris in recent months has thrown her support behind the effort. Perhaps most notably, she was the chief Senate sponsor of the MORE Act.
Where Trump stands on the matter is more of a mystery.
He has mostly side-stepped pot-related issues as president, and hasn’t offered much comment. He was derided by industry advocates for nominating Jeff Sessions, a legalization opponent, as attorney general in 2016. In January 2018, Sessions reversed an Obama-era policy that essentially called on the federal government to not prosecute marijuana crimes in states that had legalized it.
Trump fired Sessions in 2018, though cannabis isn’t known to have figured in the decision.
“I don’t know that he’s a friend of cannabis, and I don’t think that anybody really knows,” Steve Schain, another attorney with Hoban Law Group, said of the president.
Although Trump’s conservative base isn’t typically associated with supporting legalization efforts, recent polls have shown majorities of both parties support legalization.
It’s because of that broad support that some felt Trump might use the issue for political gain this year and perhaps become an unlikely champion of legalization.
Graff said he’s heard those rumblings, but suggested the pandemic muscled out any potential gains to be had from supporting marijuana legalization in the lead-up to Nov. 3.
“If you would’ve asked me that a year ago, I certainly would have told you that Trump could and/or would use the issue of marijuana legalization to his benefit for purposes of this election,” he said. “I think the COVID pandemic and all the changes over the past year have dictated a change across the board, in terms of priorities.”
Support of status-quo
CPA Jim Marty, CEO and founder of Colorado-based Bridge West, which provides accounting and advisory services to the cannabis industry, agreed legalization is unlikely in the short-term. Unlike many within the industry, though, he thinks that’s for the best.
“We’ve got a good thing going right now,” he said. “The feds are leaving us alone, for the most part, and not busting marijuana shops or grows, even though it’s still federally illegal.”
Marty said he feels the current set-up is better than federal legalization, at least for the time being. If cannabis were to be removed from the Controlled Substance Act, where it is listed as a Schedule I drug, big-money operators would swoop in and “crush the industry as we know it.”
“You’d end up with two or three brands, like Budweiser and Miller [in the alcohol industry] or Marlboro and Winston with cigarettes,” he said.
While he acknowledged that legalization would be beneficial for tax purposes – marijuana businesses are taxed at a much higher effective rate than traditional companies – and that it would clear the path for operators to utilize banks, he suggested those would be outweighed by the negative impacts.
“The devil you know is better than the devil you don’t know.”
If anything, Marty said he’d be supportive of the STATES Act, a bill introduced last year by Sens. Cory Gardner (R-CO) and Elizabeth Warren (D-MA) that would essentially force the federal government to recognize states’ legalization efforts.
A report published Tuesday by Key Investment Partners, a venture capital firm focused on the industry, suggests the 2020 race could alter the pace of legalization.
That report identified the presidential election and control of the Senate, which the November election will also determine, as key to the industry’s near term future.
Of the four possible scenarios, assuming Democrats retain control of the House, the only scenario it suggested would bring rapid change is if Biden wins and Democrats take control of the Senate. Even then, it suggests legalization will likely occur in stages.
Given Trump’s unpredictability, Graff said he can see the president taking up the issue if he is re-elected and it proves to be convenient.
“At the end of the day, I think President Trump sees marijuana legalization as a sort of negotiating or bargaining chip – a poker chip, so to speak – that, if and when to be appropriately played, he would consider employing,” he said.
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