• Biden pardons cannabis possession crimes
    • Classification “makes no sense”
    • Legalization not yet heralded

    Joe Biden wants to decriminalize cannabis

    In early October, US President Joe Biden announced that he would advance the decriminalization of marijuana in the US, which he previously promised during the 2020 presidential election. Not only does he want to pardon “all previous federal offenses of simple possession of marijuana,” he also wants governors to treat state possession offenses in the same way. “Just as no one should be in a federal prison just for possession of marijuana, so no one should be in a local jail or state prison for that reason,” the president wrote on his Twitter profile.

    reassessment required

    By presidential decree, he called on the Justice and Health Ministries to reclassify cannabis as soon as possible. We consider marijuana on the same level as heroin – and higher than fentanyl,” Biden tweeted after the announcement. “It doesn’t make sense.”

    U-turn after previous rejection

    Even if Biden already fought his adversary and predecessor in the election campaign donald trump positive towards the liberalization of cannabis, he was not a supporter of the intoxicant for a long time, as “Forbes” reports. Last year, a wave of layoffs among new White House employees also caused a stir. Workers had to resign because of past cannabis use, the White House confirmed when asked — even though marijuana was already legal in Washington, DC at the time. “I also want to note that as federal and state regulations change, we still need important restrictions on the trafficking, marketing and sale of marijuana to minors,” Biden also said during his decriminalization campaign earlier this month.

    Cannabis stocks briefly soaring

    According to “MarketWatch”, cannabis producers have previously requested that the classification of the active substance be checked under federal law. Investors sent cannabis stock prices skyrocketing after Biden’s announcement. Notable industry winners included SynBiotic, Tilray, Aurora Cannabis, and Canopy Growth. Exchange-traded funds that track cannabis producers have also hit record prices, according to MarketWatch. In the days that followed, however, prices for marijuana stocks and ETFs mostly bounced back — in some cases falling below their pre-announcement levels.

    However, Pablo Zuanic, managing director of Bank Cantor Fitzgerald, could not see a reason for this. “There is nothing that Biden has said that is negative for Canopy or Tilray that would justify these stocks being below where they were before Biden made the announcement,” Zuanic told Forbes. “These are just very liquid, high beta stocks, so they go up on high-risk days and down on low-risk days.”

    No legalization expected for the time being

    Nevertheless, the industry and investors who are invested in such companies or funds should not react too euphorically to the news, warned Ian Katz, analyst at Capital Alpha Partners. “Marijuana-related stocks like Tilray, (Sundial) and Canopy Growth rose on the news as the broader market fell,” the strategist said in a note obtained by MarketWatch. “But if investors have bet that Biden’s actions will lead to legalization of marijuana, they will likely be disappointed.”

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    Merida Capital Holdings founder Mitch Baruchowitz also told the portal that the legalization of cannabis still has a rocky road ahead. “It still shows his [Bidens, Anm.d.Red.] Reluctance to do anything bold in relation to cannabis.”

    First step in the right direction

    Jigar Patel, who heads California cannabis producer and distributor NorCal, takes a similar view. “Honestly, it is beyond disappointing that President Biden has not done more to protect some of the most vulnerable veterans, patients, students and disenfranchised Americans who have been unfairly treated and targeted for decades,” the company executive said. Although Biden’s efforts to advance the decriminalization of marijuana are a first step in the right direction, the measures are not sufficient. Instead, Patel would have liked to see less stringent policies reinstated, which the ex-president Barack Obama implemented in his terms of office, which include regulating cannabis use at the federal level and better protecting medical marijuana users, including veterans.

    Major uncertainties for Canadian manufacturers

    Baruchowitz also criticized the fact that the US market for Canadian manufacturers still did not prove to be a profit guarantor after Biden’s announcement. “How many of them now have money to even go to the US?” the investor said. “The US is just another market where they’re losing a few hundred million dollars a year.” Although some Canadian producers are already selling products with cannabidiol (CBD), a component of cannabis, which do not have the intoxicating effect of the active substance, it remains to be seen whether the companies are now also allowed to sell goods containing THC in the USA.

    In general, US cannabis companies are better positioned as part of the announcement, according to Zuanic. Domestic manufacturers could benefit from tax advantages if marijuana actually migrates to a lower class of drugs.

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