Why This Bill May Lead to a Boon in U.S. Marijuana Stocks and a Massive Opportunity for Investors

U.S. Marijuana Stocks

Despite being a global trade, almost all of the top marijuana stocks are based out of Canada. And that makes sense: it’s the only country with a powerful economy that has fully legalized marijuana. Even so, many expect to see a boom in U.S. marijuana stocks when the entire country does eventually legalize pot. But we actually may see a U.S. marijuana stock boom sooner than we thought.

The U.S. House Rules Committee is currently considering an amendment that would seek to defend all state-legal cannabis programs from being interfered with by the U.S. Justice Department.

There’s already a provision in a spending bill that forbids the U.S. Justice Department from using funds to prosecute marijuana programs in states, but this would go one step further. (Source: “Congress Votes To Block Feds From Enforcing Marijuana Laws In Legal States,” Forbes, June 20, 2019.)

U.S. Attorney General William Barr has already previously stated that he would adopt a hands-off approach to marijuana, but this bill would preserve protections in law and would be a massive step forward for pot stocks.

While it’s worth noting that these protections are only guaranteed for a year, it may provide the cover necessary for U.S. marijuana stocks to grow without fear of federal government interference.

We’ve already seen a number of pot stocks list on the Nasdaq and New York Stock Exchange, already marking a shift in confidence.

But large banks and other national corporations have had reservations when dealing with marijuana companies (and their money) precisely because of the threat of violating federal law.

While this new bill won’t do away with all those issues (banking specifically is still going to be contentious), it will, at the very least, provide some cover for marijuana stocks that are operating solely within these states to become more surefooted and confident, which in turn may inspire them to take their companies public.

You’ll remember that when former U.S. attorney general Jeff Sessions was in power, a U.S. marijuana crackdown was a real concern and had investors rightfully worried about just how “legal” U.S. pot operations were, considering the federal government essentially held a sword over its head.

Federal law still prohibits marijuana and technically overrules state law in this case, allowing federal agencies to prosecute marijuana companies in legal states if they so chose.

But this provision in the bill would strip the Justice Department of those powers and provide a much higher degree of safety to U.S. marijuana stocks.

With that major threat removed, we could see another rush of U.S. marijuana initial public offerings that would in turn spur on another green rush, not unlike the massive gains we saw in Canada when legalization first became an inevitability.

This is by no means a certainty, but this bill may provide the cover that U.S. marijuana companies need to go public, and may provide a huge opportunity to investors.

Analyst Take

The future of marijuana lies in U.S. pot stocks. That’s pretty much undisputed. What is in dispute is just when those will fully emerge.

With this new bill potentially passing in Congress, that day may be sooner rather than later.