Joe Biden and Marijuana

What is the relationship between Joe Biden and marijuana? Coming out of a disastrous pandemic and its associated economic blight, many Americans’ hopes for a brighter future are pinned on the President Joe Biden. One area in which Biden has taken a lot of criticism is regarding his approach to the country’s marijuana industry, which could do much to get people back to work. However recreational cannabis is still illegal under federal law despite the broad unpopularity of national cannabis legislation.

Joe Biden on the Legal Status of Cannabis

Oddly for a candidate who built a great deal of political capital out of his outspoken support for the War on Drugs in the 90s, Biden’s current approach to legalizing marijuana has been woolly. It is on record that he opposes recreational use of marijuana, and in November 2019 Biden courted controversy by alluding to the view that it has been considered a gateway drug. He insists that more research is needed to determine whether the plant is harmful before he will reverse the policy of national drug control for recreational cannabis. However, Biden is in favor of federal legalization of medical cannabis. He does, it should be said, regard it as a flawed tool unworthy of a ‘humane society’. The Biden administration has come under fire for firing or reassigning staffers based on their admitted usage of recreational cannabis legal at the state level, even when Biden’s own Vice-President Kamala Harris infamously shared that she smoked cannabis at a time when it was still illegal. While the administration claims that there were other factors in the decisions, the optics are unhelpful at a time when there is so much focus on how people in color in particular are penalized for usage of marijuana while the Ashley Bidens of the world evade legal or professional consequences for their cannabis consumption.

Joe Biden on the Cannabis Industry

At present, the national status of cannabis is clearly at odds with the states where recreational cannabis is permitted: states that comprise over one-third of the US population. Cannabis is the only Schedule I drug with state-legal markets in the country. A major pillar of Biden’s cannabis policy is the rescheduling of cannabis from Schedule I to Schedule II. However, this reclassification will not do anything to resolve its legal status, nor makes it more accessible to researchers. Schedule II drugs, such as cocaine, or methamphetamine, can also be illegal.

For the marijuana industry, rescheduling is an insufficient measure. It has been criticized as pandering to the anti-drug lobby, as not being based on science, and as being anti-business. Industry leaders and academics both have criticized cannabis rescheduling, warning that it would undermine the extant legal marijuana industry by enshrining the substance’s research and development as a solely pharmaceutical endeavor. Rescheduling as Schedule II, and federal enforcement of those standards, would lead to the shutdown of all present state-legal activities. For business to continue as normal, the cannabis industry would need to lobby for an exemption along the same lines as those that the alcohol and tobacco industries currently enjoy. Many small businesses would be pushed out, consolidating the control of the industry between a handful of corporations. This would likely lead to a negative effect on employment and tax income for affected states. Sean Donahoe, an Oakland, California-based cannabis industry consultant, says “His stance is to blow up 90 percent of the existing regulated and traditional market…shows [Biden’s] fundamental worldview is framed through a corporate lens with no regard for existing operators, nor good public policy.”

Joe Biden on the War on Drugs

The Democrats in general are in favor of criminal justice reform to correct the trend of federal mass incarceration, which began in the 1970s but escalated in terms of drug-related prison sentences in the 90s and early 21st century. Joe Biden’s marijuana policy involves decriminalizing (but not legalizing) cannabis use, automatically expunging prior possession convictions, and deferring to states with regard to rules about recreational use. This is a considerable departure from his previous stances on marijuana as a member of the Senate Judiciary Committee, where he drafted and supported federal drug legislation that was ‘tough on crime’, including advocation of civil asset forfeiture. His ostensible goal was to combat drug trafficking and a burgeoning crime wave. He worked with the Reagan administration to establish the Office of National Drug Control Policy, which rapidly soaked up more and more federal funding, and the role of the ‘drug czar’.

Biden’s Marijuana Stance is Behind the Curve

While Biden’s anemic gestures in the direction of federal marijuana reform are not inspiring to those in the industry, the Democrats in control of the Senate and the House of Representatives are more eager to substantially alter current cannabis laws. Unfortunately, there are roadblocks— notably, Montana Senator Jon Tester (D) is opposed to recreational and medical marijuana legalization in spite of a) his state already having passed unilateral legalization and b) over 4 in 5 Democrats supporting legalization.

Joe Biden and the Future of Marijuana Policy

Around 4/20 in 2021, Press Secretary Jen Psaki clarified the administration’s stance: “The President supports leaving decisions regarding legalization for recreational use up to the states; rescheduling cannabis as a Schedule II drug so researchers can study its positive and negative impacts; and, at the federal level, he supports decriminalizing marijuana use and automatically expunging any prior criminal records. He also supports legalizing medicinal marijuana.”

What this means for any bills which manage to make it to his desk but outstrip his conservative perspective on the issue of cannabis remains to be seen.

Foothill Capital Management is the advisor of the Cannabis Growth Fund and is not affiliated with the distributor.

OF SPECIAL NOTE

Statements, estimates and forecasts are subject to significant legal, business, economic, and competitive uncertainties, including competition, limited access to bank services, litigation, enforcement actions, and the receipt of government authorizations. This includes differences in, among other things, laws, regulations and guidelines relating to the manufacture, transportation, and storage of cannabis, and the conduct of operations, which vary among the U.S. federal government, various states, and foreign jurisdictions. There can no assurance that such estimates and/or forecasts will be realized, and these are not indicative of future investment performance. Historical data is not indicative of future performance.

Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses. This and other information is in the prospectus, a copy of which may be obtained from 888.885.0588 or at https://www.cannabisgrowthfunds.com/. Please read the prospectus carefully before you invest.

Investing involves risk, including possible loss of principal. The cannabis industry is subject to rapidly evolving laws, rules and regulations, and increasing competition which may cause such companies to change business model, shrink or suddenly close. These may limit access to banks, and create significant burdens on company resources due to litigation, enforcement actions, receipt of necessary permits and authorizations to engage in medical cannabis research or to otherwise cultivate, possess or distribute cannabis. Possession and use of cannabis is illegal under federal and certain states’ laws, which may negatively impact the value of Fund investments. Where legalized by states, cannabis possession and use remains a violation of federal law. The companies in which the Fund invests are subject to various laws and regulations relating to the manufacture, management, transportation, storage and disposal of cannabis, including health and safety, conduct of operations, and environmental protection. Even if a company’s operations are permitted under current law, they may not be permitted in the future, and a company may not be able to continue operations in its current location. Controlled substance legislation differs significantly between countries and may limit a company’s ability to sell products.

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