One of the biggest hurdles for the marijuana industry is that marijuana is classified as a schedule 1 controlled substance by the Drug Enforcement Administration. As long as it’s on the list, using and even researching marijuana will remain next to impossible in the U.S and many companies, including banks, will continue to shy away from being doing business with cannabis companies.
For there to be meaningful marijuana reform, it needs to first be removed from the schedule 1 list. There’s optimism that the removal could happen a lot sooner than later. While that doesn’t mean that full marijuana legalization will follow, it could be the first step toward decriminalizing it.
New Bill To Decriminalize pot on its way to the house
On Wednesday, the House Judiciary Committee approved the Marijuana Committee Reinvestment and Expungement MORE Act. The bill would not legalize marijuana. Even decriminalizing it would still be an important step forward for the industry. Under the bill, individual states would also be free to make their Own rules for marijuana.
After recently passing in the house, the SAFE banking bill will make it for banks to do business with cannabis companies. The MORE Act goes the furthest in terms of marijuana reforms and would be quite a significant development for the industry.
Passing it into law is still an uphill battle
The MORE Act will likely see strong support from a Democratic-controlled House of Representatives. There are two reasons the bill may not become law, at least not immediately.
For one, even if the bill pass into the House, the bigger battle will likely be in the Senate, where it have to win over the support of Republicans. The other challenge is that the bill may be trying to do too much. The more complex the bill is, the more items there is to debate about, which could stall the process.
The MORE Act could make the Acreage Canopy Growth deal a reality
Earlier this year, Canopy Growth (NYSE-CGC) made headlines when it announced that it was planning to buy Acreage Holdings (OTC-ACRGF). Although the two companies reached a deal, the caveat is that it would not be able to go through until marijuana becomes federally legal. If Canopy Growth were to complete the deal any earlier, its operations would then be in violations of the U.S laws and the company would run into trouble with both the TSX and NYSE, where its stores are currently traded. The lack of federal legislation also prevents Acreage from trading on a major U.S exchange as well. Passing the MORE Act could certainly the deal between the Two companies a possibility, and even the STATES Act could Suffice.
What does this mean for the investors?
Cannabis investors shouldn’t get too excited about the more Act just yet as there could still be a long road ahead before a significant piece of legislation is able to pass both the House and Senate. If it does, there could be a whole lot of activity in the industry.
If Canopy Growth and Ancreage are finally able to join forces, that could lead to even more expansion in the U.S by the two companies as the competition in the industry would likely ramp up.