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Legalisation in Motion? Biden Pardons Explained

October 12, 2022

Legalisation in Motion? Biden Pardons Explained

Last week, President Biden ordered a sweeping pardon for people convicted of marijuana possession, finally fulfilling one of his campaign promises.

The announcement marks the most significant step the U.S. has seen toward cannabis law reforms, with many expecting re-evaluation, decriminalisation, and market growth in the pipeline.

The pardons affect around 6,500 people convicted of possession at the federal level.

Biden is now pursuing the removal of cannabis from the Schedule One category, the level shared with the likes of heroin.

Surging Stocks Amidst Rescheduling Expectations

Companies with ties to the marijuana market, from CBD retailers to commercial growers, saw stock surge after Biden’s announcement and his call on federal regulators to review the classification of the drug.

The rise of stocks is unsurprising, as an immediate re-schedule of cannabis would likely see U.S. businesses able to claim deductions and reduce their tax burden. If the drug is re-evaluated to a Schedule Three or below, new opportunities will open for businesses in the industry. For example, medical research on the therapeutic benefits of the drug could see reduced restrictions and U.S. stock exchanges could allow cannabis companies to list under their rules.

Normalising the Industry

Experts around the world have welcomed the ‘momentous’ decision by the President, expecting an inevitable shift in attitudes and acceptance of the drug around the world.

With a focus on ‘social justice’ and a ‘health-based approach’, cannabis could be normalised as both a medicinal and recreational drug.

The Impact

Whilst long-term impacts are yet unknown, the move could have an impact across the globe for businesses, consumers, and patients.

Countries across Europe are increasingly moving towards cannabis regulation. The likes of CBD products have already become the ‘norm’,with products available through many leading retailers.

Consumers are actively trying hemp-derived products, inspiring increased offerings across brands and, with intensive media coverage, expectations for the CBD sector are high.

Cannabis products could expect a similar reception, if the drug was to be de-scheduled in the U.S., with products readily available without complex testing, tracing or licensing. At present, a re-schedule may appear to be more likely. Nevertheless, this would likely change how investors value cannabis businesses and help breathe life into the sector - Cannabis would remain illegal but subject to far fewer restrictions.

 

It’s a gripping time for businesses in the sector, with eyes locked on the U.S. and its next steps.