Jeff Sessions doesn’t scare everyone in the cannabis sector. Even though Sessions was quoted saying, "I reject the idea that America will be a better place if marijuana is sold in every corner store," many say that Sessions could impose much harsher penalties if his goal is truly trying to destroy the cannabis industry. For instance, he could charge cannabis investors with financing drug operations. But Sessions isn’t doing that.
Is the government relaxing a bit on its cannabis stance? It seems so. The recent pact between President Trump and Senator Corey Gardner (R-Colorado) encouraged many other states that things may get easier in the industry. Adding encouragement was Senator Mitch McConnell (R-Kentucky) who introduced legislation to legalize hemp farming in America. Last but not least, the Veterans Administration is in favor of studying whether cannabis can help PTSD and chronic pain, and the Food and Drug Administration is poised to approve the first-ever drug based on cannabis (the epilepsy drug Epidiolex made by GW Pharmaceuticals Plc (GWPH). To top it all off, Senator Schumer (D-New York) introduced a bill to deschedule cannabis, removing it entirely from the Drug Enforcement Agency’s (DEA) list of controlled substances. Cannabis remains a Schedule I narcotic drug, on the list with heroin and LSD, and the federal classification has kept many investors leery.
Some institutional investors do seem encouraged by these government gestures as a wave of new money has flowed into the sector in the last couple of weeks since these big announcements. Insiders say the government moves will definitely change the minds of other investors who have been skittish about entering the sector. Leslie Bocskor is president of Electrum Partners, a cannabis consulting and investment firm in Las Vegas. He says, “Sessions has no intention of harming the industry. And the agreement that Senator Gardner is talking about is great news for our industry. And there is more, the FDA with GW Pharmaceuticals, McConnell on hemp. I'm already hearing from investors.”
More traditional industry investors like Tiger Global Management have taken the cannabis leap. Known for investments like Netflix and Domino’s Pizza, Tiger Global will invest nearly $20 million in Green Bits, a cannabis retail management company. Investors look to Tiger Global’s market entry as a signal that more traditional mainstream investors will follow the lead.
However, other industry experts say that investors might want to use caution still. While Schumer’s move is bold, introducing legislation and passing legislation are two entirely different beasts. Mentor Capital’s CEO Chet Billingsley isn’t convinced that investors will automatically jump in. While he thinks it is great that the senators are trying to change things, he says most investors he knows will want to see those bills actually pass before they make a move.
The American public seems to be behind the senators. The latest Pew Research Center reports show that the majority of Americans (61 percent) believe that marijuana should be made legal in some fashion. Politically speaking, both parties support cannabis for very different reasons. The left views it as a social justice issue while the right is a strong advocate of states’ rights, letting each state decide how involved they’ll be in cannabis. It seems that roads are pointing in the right direction. Is elimination of prohibition the next logical step?