Market Overview

Trump, Sessions, Spicer And Medical Marijuana: Industry Insiders Discuss The Future Of Cannabis

Share:
Trump, Sessions, Spicer And Medical Marijuana: Industry Insiders Discuss The Future Of Cannabis
Read more about our latest Cannabis News! CANNABIS HOME

There’s been a lot of talk about what the federal government will do about legal cannabis, especially due to the fact that government officials haven't said much about the issue.

However, there seems to be a certain level of consensus among industry insiders that “Trump will leave medical marijuana alone.”

Uncertainty Reigns

"When the [Trump] administration said 'we support medical marijuana,' there was an assumption that what that means is that they support medical marijuana as we currently, from the industry, understand medical marijuana," investment banker and President of cannabis advisory firm Electrum Partners, Leslie Bocskor, told Benzinga. "There’s an assumption that that means they support medical marijuana markets and states that have established medical marijuana markets [but] that might not be true."

"Maybe when [federal government officials] say they support medical marijuana, they actually are saying ‘we support that there are actual therapeutic uses based on the cannabis plant that, having gone through the proper clinical trials, could result in FDA approved medicines,'" Bocskor added. "So, there could be this assumption that what they said is good for the medical marijuana market as we know it, when it could in fact be the worst thing that could be going on."

Bocskor noted that "we won't know until we find out what is being said in the conversations taking place behind the scenes."

The Damper Potential

India Globalization Capital, Inc. (NYSE: IGC) co-founder and CEO Ram Mukunda has a slightly different vision.

"I think the message from both the Attorney General Jeff Sessions and Trump seems to be that they will leave medical [marijuana] alone, and they are not happy about the recreational part of cannabis. That seems to be the message," he said.

"Now, in terms of what they can do about it, I think there is a lot they can do to put a damper on the industry, frankly," Mukunda said. "I think there is a lot they can do to psychologically put a damper on the industry. What I mean is one or two federally-sponsored raids in one of the states where there is a grower would really scare a lot of people."

"So, I am concerned about the language that is coming out of the government because I think they don’t necessarily have to do a lot; I think just to psychologically scare people, to deter investors and banks… there is a lot they can do. It does not take much to get investors to back off and it certainly doesn’t take much to get the banks to back off," Mukunda said.

Banking Issues & Other Hurdles

One of the biggest problems the industry faces is banking.

"Just to give you some examples," Mukunda explained, "with being listed on the NYSE there is a lot of scrutiny about what IGC does and we have to stay on the medical side; we cannot be growing or processing or deriving a direct revenue from the recreational side. That’s a big constraint."

"Then there is the banking side, and then there is the SEC which requires a lot of risk factors associated with the industry, with banking, with where revenue is coming from (…) There are all these little things, and then there is Bank of New York Mellon Corp (NYSE: BK), which is one of the largest clearinghouses for shares; they have a list of companies that they have put on their blacklist (…) That’s a very serious problem for companies like us, who have been troubled because brokers will not clear the stock.”

The Opportunity Ahead

Against this turbulent backdrop, Mukunda sees a "very, very large opportunity [for] those who can navigate the regulations and make sure they are on the right side of the regulations."

Are there any companies safer from all these challenges? Mukunda noted they are leaving big pharma companies alone.

Mukunda thinks GW Pharmaceuticals PLC- ADR (NASDAQ: GWPH) is a company deemed safe because it's considered a big pharma.

For startups, it's harder.

"But again, it's one of those situations where it's a highly regulated market and you really have to know how to navigate the regulations and you really have to be very, very clear and be committed to abiding by the regulations," Mukunda said.

Related Links:

How To Pick The Right Marijuana Stocks

Top Cannabis Industry Experts Share 17 Predictions For Marijuana Markets In 2017

Read more about our latest Cannabis News! CANNABIS HOME

Posted-In: Biotech Cannabis Emerging Markets Health Care Politics FDA Legal Top Stories Best of Benzinga

 

Related Articles (BK + CANN)

View Comments and Join the Discussion!

Cannabis Movers

Sign up for our secret cannabis newsletter!
Never miss out on the breaking news in the Cannabis Industry!

EUR/USD Little Lower Ahead of Data

Fed Meeting Takes Center Stage Even As Blizzard Bears Down on East Coast