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?? The pandemic has led to increased sales to hemp companies
?? Legalization has come a long time ago
?? The US elections could lead to a turning point
The marijuana industry, including companies like Aurora Cannabis, Canopy Growth & Co., repeatedly suffered when hopes of legalization were dashed. Although laws have been relaxed in Canada, the United States remains a rough patchwork of the legal use of cannabis. Numerous industry representatives rely on and have already positioned themselves in the potential US market. But so far without the hoped-for turning point. How the industry has changed following the Corona crisis and what impact the upcoming presidential elections in the United States could have.
Between legalization and cannabis initiatives
The rules for using marijuana are not uniform in the United States. Cannabis is still illegal in three states. Marijuana possession is legal in eleven states including Alaska, California, Michigan, and Illinois. In the rest of the United States, sales for medical purposes are allowed, but here too there are some additional regulations that limit the THC content, for example.
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As CNBC reports, hope has already sprung up in the 2018 mid-term elections: lawmakers from three states had already moved towards an agreement, but last year the favorable votes weren’t enough. Due to the pandemic, legalization projects were initially put on hold. Legalization is an important milestone for the cannabis industry. Full legalization could be beneficial, especially with regards to potential tax revenues and jobs. According to CNBC, New Jersey is expected to pass legislation to legalize adult marijuana. The prognosis: in the first year, sales of 400 million US dollars could be generated.
The Corona pandemic increases cannabis sales
The corona pandemic has already increased the sales of cannabis sellers. CNBC cites data from Arcview Market Research / BDSA, compared to sales of $ 12.1 billion last year and about $ 15.8 billion this year. The focus is mainly on those countries where so-called recreational marijuana, i.e. use by adults, is allowed. The US state of Illinois posted record sales for the fifth consecutive month. Sales in Oregon have also increased 30% since the start of the pandemic, reports CNBC. “Overall, the industry is doing quite well,” said US broadcaster Chris Walsh, CEO of Marijuana Business Daily. “Some companies have had problems, but in general we haven’t seen a huge number of layoffs or companies fail.”
US Elections: Federal Legalization of Marijuana in the US?
At the federal level, marijuana remains illegal and is included in List I of the Drug Classification. But depending on the election outcome, nationwide legalization may be more likely than ever, according to CNBC. While both presidential candidates don’t have a completely straight stance on cannabis, a Democratic election victory with Joe Biden should give birth to green hope. During his tenure as Obama’s vice president, he and his colleague Kamala Harris supported the decriminalization and restructuring of adult marijuana. Then, last year, Senator Harris co-sponsored the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, which aimed to remove cannabis from the drug law and remove federal criminal penalties. Voting on the bill was likely postponed to next year, according to CNBC.
Taxes, Labor and Justice – Pro Cannabis
Decriminalization and legalization would bring benefits in many ways. Not only would it create another source of tax revenue, it would also create jobs. A report from Leafly earlier this year showed that 244,000 people are already employed in relation to legal cannabis. “But with the new states coming in and the [möglichen] Federal legalization could lead to tens of millions of jobs, ”Aaron Smith, executive director of the National Cannabis Industry Association in Washington, told CNBC.
As a further argument, CNBC also cites social justice reform as an argument. “The drug war has a history and will continue to affect communities of color disproportionately,” said David Abernathy, vice president of research and consulting for the Arcview group. The sector has a lot to offer, especially business opportunities from which minorities should also be able to gain opportunities. “It is more difficult for communities of color to get involved in the industry as it is better capitalized and people from other industries with their connections enter the industry,” said US broadcaster Abernathy.
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Growth trend in the cannabis industry
Not only did the coronavirus, which evoked a housewife mentality, show growth potential. Investors used the phase to enter the volatile market. But that’s not all: the legalization initiatives planned for next year should continue on this trend. At least Abernathy offered this upbeat perspective in an interview on CNBC.
Examples like Tilray, Cronos, and Aurora Cannabis show that the growing sophistication in the industry favors this trend. Specializations in the pharmaceutical, food or CBD products sector show the diversified potential that the industry holds. In the event of widespread legalization, the classic market with its traditional players is therefore likely to open up to marijuana startups, and the first small steps in this direction have already been taken.
In summary, it must be recognized that the industry offers many economic incentives. Especially in the economic situation shaken by Corona, it might be worth changing the perspective on the grass, still partly illegal. The trends towards decriminalization and the legalization initiatives already underway therefore offer great opportunities for the industry. It remains to be seen whether Joe Biden will fulfill this desire in the event of an election victory.
Editing of Finanzen.net
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Image sources: Lifestyle discover / Shutterstock.com, Leonteq
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