Why Congress finally voting on cannabis legalization is a ‘watershed moment’: CEO [Video]

Why Congress finally voting on cannabis legalization is a ‘watershed moment’: CEO [Video]

The House of Representatives is slated to vote this week on a bill backed by Vice President-elect Kamala Harris that seeks to not only legalize marijuana at a federal level, but also expunge certain cannabis offenses.

The bill, named the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, is largely expected to pass the Democratically-controlled lower chamber as soon as Thursday. House leaders had hoped to bring the bill to a vote earlier this year, but postponed it due to Republican pressure to focus on stimulus negotiations.

Despite the unlikelihood that the bill goes anywhere in the Senate so long as Republicans maintain control, the fact a bill that seeks to legalize cannabis at a federal level and expunge cannabis offenses is up for a vote shows just how quickly views on cannabis have evolved in the last few years. According to a November Gallup poll, a record 68{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49} of Americans support legalizing cannabis. That’s up from 60{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49} in 2016.

“It really is a watershed moment,” Trulieve CEO Kim Rivers told Yahoo Finance Live in a Wednesday interview. “Now, of course, the devil is in the details and we’ll start to talk about what [legalization] means, but to even have the conversation around the actual policy is in and of itself a huge step.”

Publicly traded multi-state cannabis companies like Florida-based Trulieve (TCNFF) have rallied since the election, not only due to the Democratic win at the top of the ticket, but also due to the fact that all five statewide cannabis measures up for votes this election cycle were approved by voters. According to industry firm New Frontier Data, those approved ballot measures in Arizona, Mississippi, Montana, New Jersey and South Dakota could add $9 billion in market size to the U.S. cannabis industry.

Marijuana flags are seen as protesters gather to smoke marijuana on steps of the U.S. Capitol to tell Congress to "De-schedule Cannabis Now" in Washington, U.S. April 24, 2017. REUTERS/Yuri Gripas
Marijuana flags are seen as protesters gather to smoke marijuana on steps of the U.S. Capitol to tell Congress to “De-schedule Cannabis Now” in Washington, U.S. April 24, 2017. REUTERS/Yuri Gripas

Despite more states continuing to legalize cannabis, the overhang at a federal level has long had an impact on cannabis companies that are taxed at higher levels and have been blocked from accessing normal financing. The MORE Act, if signed into law, would change both those issues and allow U.S. companies to list on major stock exchanges.

The tax burden being mitigated is perhaps most notable for companies like Trulieve, which paid more than $43 million in federal taxes in 2019. Changes in tax policy that would stem from cannabis being federally rescheduled could reduce the company’s tax burden by more than $16 million, Rivers previously said.

However, as analysts at Cowen have highlighted in the weeks leading up to the historic House vote, the hope of seeing the MORE Act move beyond the House could still be far off. As they note, it will be key to watch the vote margin and “whether re-elected Democrats vote against the MORE Act or if re-elected Republicans vote in favor of the bill” to gauge cannabis momentum and whether legalization has support to press the issue further next year.

Beyond direct business implications for the sector, progressives are also cheering the added focus the MORE Act gives to rectifying the impact on communities of color that has stemmed from America’s war on cannabis. According to Wes Moore, the CEO of anti-poverty organization Robinhood, the MORE Act could signal a major step in addressing a criminal justice system that has widened the nation’s racial inequality problem.

Zack Guzman is an anchor for Yahoo Finance Live as well as a senior writer covering entrepreneurship, cannabis, startups, and breaking news at Yahoo Finance. Follow him on Twitter @zGuz.

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