The White House confirmed Thursday that President Biden will pardon all prior offenses for simple cannabis possessions. The announcement, signaling the possibility of broader marijuana reform sent cannabis stocks surging.
The pardons will also apply to anyone in Washington DC convicted of simple possession of marijuana, a senior administration official told reporters.
"No one should be in jail just for using marijuana," Biden said.
This was a historic moment for the U.S. cannabis industry, but the question is – what’s next?
Cantor Fitzgerald’s analyst Pablo Zuanic said there are “reasons to be bullish, even after yesterday’s spike.”
Biden’s Actions Could Help Push For SAFE Plus
It is possible that President’s pardons would ease up the talks between Senate Democrats and Republicans to pass SAFE Plus, Zuanic said in a Friday analyst note.
The ‘SAFE Banking Plus’ Act is an updated version of a bill that contains provisions to protect financial institutions that provide services to state-legal cannabis businesses. It also contains some equity components.
The issuance of pardons could help lower the pressure on Democrats to add a few “restorative justice” features to SAFE Plus, which could diminish much-needed Republican support to pass the bill. As for cannabis stocks, the analyst believes little would change in the short term, without SAFE Plus.
The Department of Justice/U.S. Department of Health and Human Services review process to change marijuana’s status in the Controlled Substance Act could take a minimum of 1-2 years. What’s more, without a final recommendation for the descheduling or rescheduling of cannabis, U.S. exchanges won’t be able to uplist cannabis stocks. But with SAFE Plus, uplisting is possible, the analyst said.
The Three Questions
Zuanic highlights the three important questions in relation to Biden’s pardon announcement: a) Is this just election posturing, b) was this done in isolation from Senate Democrats working on federal level reform, c) does this stall SAFE Plus and suck the air from the related negotiations?
While the timing is suspicious, being so close to midterms, the executive action is already signed and the process has started, Zuanic answers to the first one.
“Also, while we do not know for certain, we do not think the White House acted in isolation. His action, in our view, facilitates the negotiations with Republicans in the Senate for SAFE Plus.”
If SAFE Plus passes in the lame-duck period it would become effective immediately, while the DOJ/HHS procedure could take a year or two.
Photo: Courtesy of Kindel Media and Paula Nardini by Pexels
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