U.S. Marijuana Legalization Wins Big in Budget Proposal, Protects Stocks

USA Marijuana Legalization
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U.S. Marijuana Legalization

In one of the more unexpected moves last week, Congress came out in defense of U.S. marijuana laws in its budget proposal. The move was a huge win for U.S. marijuana legalization and shows that while the federal government may not be the marijuana industry’s biggest friend, Congress was willing to protect laws already on the books in weed-legal states. As for investors, this was a huge win as it has dramatically lowered the possibility of a U.S. marijuana crackdown and solidified the legitimacy of the drug in the country.

So let’s dive into the details of what happened.

The thing about the budget proposal is that it very much flew in the face of what much of the Trump administration had been jockeying for, which is strange considering that both the House and Senate are controlled by Republicans.

One of the most radical deviations from the White House’s agenda, however, came by way of the Rohrabacher-Blumenauer Amendment, which essentially bars the federal government from meddling in states where medical marijuana has been legalized. (Source: “Major Risk To Cannabis Stocks On Verge Of Lifting,Forbes, March 22, 2018.)

The inclusion of the amendment in this budget proposal was a huge coup for marijuana supporters, as it prevents the Department of Justice and known drug crusader Attorney General Jeff Sessions from being able to march into pro-marijuana states and imposing his will.

Should Sessions attempt to attack marijuana laws in the states, he would face a strong political backlash that would be reinforced by the new amendment.

This is a massive shift in fortune for marijuana in the U.S. since the Trump administration took power.

While President Donald Trump himself has not really signaled a strong position one way or the other on marijuana, he did appoint Sessions to attorney general (AG), and Sessions’ position is clear. The man believes that marijuana is a danger to society and has at his disposal the highest law enforcement agency in the land, with federal law still prohibiting marijuana across the entire country, regardless of state law. That’s due to a concept called preemption, whereby federal law supersedes state law.

The Obama administration had issued the Cole Memo, which essentially said that states could act as they so chose when it came to marijuana and face little interference from the federal government, but the Trump administration rescinded that memo.

The passing of the budget proposal with clear defenses put in place to protect marijuana is then not only a major shift in what the Department of Justice and AG Sessions have the power to do, but also clearly demonstrates that Congress is willing to put a little skin in the game to protect state autonomy and marijuana laws already in the books in many states.

Analyst Take

This was a big win for states rights and for marijuana laws already on the books.

The fact is that marijuana is legal in many states across the Union with hundreds of millions of people living either in states that allow marijuana or are well within driving distance to one.

Marijuana legalization in the U.S. had long ago begun its slow crawl across the map, but the amendment included in the budget proposal only further cements that there’s no turning back the clock on marijuana.

We’ve long covered how the U.S. could threaten a marijuana crackdown and how the move would devastate marijuana stocks. While I was skeptical that this would actually take place, the budget proposal only serves as another bulwark to protect marijuana from federal government overreach.

Investors should be breathing a sigh of relief as this move has put a lot of power behind state marijuana laws, making U.S. marijuana legalization a lot more solid than before.