Three lawmakers from the Democratic Party in the United States on July 14 unveiled an ambitious draft bill that would legalize cannabis across the United States, removing it from the list of controlled substances. If the bill is passed, the Drug Enforcement Authority would cease to have control over the drug that would instead fall under the domain of the US Food and Drug Administration. Marijuana stocks have been soaring since the bill was introduced, a final draft of which is expected to be submitted before legislators in September…
Some of the stocks that stand to benefit from the bill include Tilray, Inc. (NASDAQ: TLRY), GrowGeneration Corp. (NASDAQ: GRWG), and Innovative Industrial Properties, Inc. (NYSE: IIPR), among others. As part of the bill, the US government is expected to allow states to control the distribution, possession, and production of cannabis. States that chose not to legalize cannabis will be allowed to block entry to the drug into the state, but not to stop shipments from within the state to other regions in the country where it is legal.
However, in the days since the bill was introduced, Chuck Schumer, the Senate Majority Leader who introduced it, has come forward and said that it does not have enough votes to pass. This uncertainty has hit marijuana stocks, with top executives in the industry, such as Canopy Growth CEO David Klein, expressing frustration over delays in the process but affirming they expected the legalization of cannabis within the next 24 months. Klein said the bill was the beginning on the path to cannabis legalization.
It remains to be seen how the industry reacts to new developments over the fate of marijuana in political power circles. The new bill has plenty that will cause fierce debate, including proposals to expunge criminal records related to marijuana possession, a new tax on marijuana products, and removal of immigration-related consequences linked to marijuana. The bill will have to be approved by both the House of Representatives and the Senate, and signed by President Joe Biden, before it can be formally adopted into law.
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