For cannabis investors observing the lobbying activities of the legal cannabis industry in the United States, there are two messages.
First, the industry is stepping up its efforts. New numbers (up to the end of September) on cannabis industry lobbying show a total of $3.77 million spent so far this year in the U.S. As of July 24, 2019; that total stood at roughly $2 million.
That means that in just over two months, the U.S. cannabis industry nearly doubled its lobbying spending. That shows that the cannabis industry is now serious about getting its message across to U.S. government officials.
Who is doing this lobbying?
Individual lobbying leaders include Curaleaf Holdings (CAN:CURA / US:CURLF) ($700,000), private cannabis company Parallel Brands ($420,000), Tweed Inc (Canopy Growth) ($210,000), and California-based Canndescent ($190,000).
Industry lobbying leaders include the Cannabis Trade Federation ($760,500), National Cannabis Roundtable ($445,000), and the National Cannabis Industry Association ($430,000).
The Cannabis Trade Federation is “a national coalition of cannabis-related businesses”. Board members include Curaleaf (Curaleaf’s Ed Conklin is the chair) and Parallel Brands.
The National Cannabis Roundtable “promotes common sense federal regulation, tax equality and financial services reform”. Former U.S. House Speaker John Boehner is the Chair. Other principals include former Acreage Holdings CEO Kevin Murphy and Chanda Macias, Owner/General Manager of NHHC, based in Washington, D.C.
The National Cannabis Industry Association represents “nearly 2,000 member-businesses and tens-of-thousands of cannabis professionals”. It’s led by Chair AC Braddock (Eden Labs), Vice-Chair Khurshid Khoja, a cannabis law-policy specialist, and Executive Director Aaron Smith, a co-founder of the NCIA and staunch cannabis-reform advocate.
While the industry is rapidly stepping up its lobbying efforts, there is an enormous amount of work to be done. In 2019 alone, well over 1,000 cannabis-related bills have been tabled across the U.S. at the state or federal level. That’s a lot of legislation to attempt to support.
Among these initiatives include several, crucial national issues. The SAFE cannabis banking bill currently before the Senate is vital to improving financial services and streamlining operations in the U.S. cannabis industry.
Congress continues to debate the legalization of cannabis at the national level. While there is little hope of passing anything before the 2020 election, there is an important opportunity to build bipartisan consensus heading toward that window.
The FDA continues to drag its heels on providing a federal framework for CBD commerce. Meanwhile, U.S. hemp farmers struggle to find markets for their crops.
Then there is the health/safety issue surrounding cannabis (and tobacco) vaping. U.S. cannabis stocks have taken a substantial hit from the media hype with respect to this regulatory issue.
Yet this also provides the cannabis industry with a potent additional argument in favor of legalization at the national level. It’s the partially-legalized, patchwork regulatory system for cannabis that exists today in the U.S. that has allowed this problem to occur.
To date, there is little tangible success that these lobbyists can point to. Nothing important has gotten done in the U.S. cannabis industry in 2019.
At the same time, there is reason to think that these lobbying efforts are starting to get traction. Senate Majority Leader Mitch McConnell recently met with U.S. cannabis industry leaders for “a private lunch”.
The self-declared “Grim Reaper” of the U.S. Senate has been an outspoken opponent of cannabis legalization. However (for various reasons), McConnell may be much more receptive to hearing what the U.S. cannabis industry has to say today.
As 2019 starts to wind down, it has not been a good year for the U.S. cannabis industry. But 2020 brings more than a new year for legal cannabis.
It stands to be a pivotal year: (possible) passage of SAFE, new rules for CBD commerce, new legalization initiatives at the state level across the U.S., and the very real possibility (at the end of 2020) that the U.S. achieves the necessary political consensus to pass full legalization.
Lingering anti-cannabis prejudices and customary U.S. political inertia have combined to slow the pace of cannabis reform in 2019. Looking ahead, as the cannabis industry becomes much more vocal and aggressive with its lobbying efforts, there are plenty of reasons for cannabis investors to be cautiously optimistic.
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