While the president of the United States doesn’t dictate the future of the stock market (and is often credited or blamed too much for the economy’s performance), when in office, the president’s policies can often determine the future of certain industries.
As such, marijuana stocks and renewable energy stocks are looking like they could explode in value in 2021.
The reason: Bernie Sanders.
This isn’t a political news site, so I won’t discuss politics too much, but whatever your political beliefs, if you’re an investor in marijuana stocks or renewable energy stocks, Sanders’s political success bodes well for the future.
A quick recap: Sanders is among the top two candidates to be the Democratic Party nominee to challenge Donald Trump for the White House in the November election.
Regardless of whether you’re happy about that, of the candidates with a chance at the presidency, Sanders is the greatest friend that the legal marijuana industry has ever seen.
Sanders has come out in full support of total legalization for both medical marijuana and recreational marijuana.
Now I know what you may be thinking: what about Congress? Just because the president wants something doesn’t mean it will magically happen. In fact, Sanders supported bills to legalize marijuana in the U.S. in the past, only to see those bills die in the House and Senate.
But that’s where the unique powers of the presidency come in.
Through executive orders, Sanders would be able to, overnight, issue orders to the Department of Justice and the Drug Enforcement Administration (and appoint his own people to those organizations) that would effectively legalize marijuana legalization.
Sanders has said that he would issue an executive order to legalize marijuana at the federal level if he assumes office. The thing about executive orders is that Congress has no say in them. That would mean his decree would pass straight into practice.
Sure, some states would be reluctant to follow through and there would be hurdles, but one major blockage would be removed: banks and institutional investors would be able to legally invest in marijuana-related companies.
Right now, large investors like banks are reluctant to put their money into pot companies. That’s because the federal prohibition on marijuana in the U.S. means that, at any moment, the federal government could come in and seize any money generated from marijuana activities anywhere in the U.S., even in states where the drug has been legalized.
That’s due to the practice of preemption, which boils down to federal law superseding state law.
The fear of that possibility has kept many banks out of the marijuana business altogether. Many refuse to even hold money generated from the marijuana sector.
But that would all change in a flash if Sanders wins the White House. An executive order would alleviate all those concerns and allow millions upon millions (potentially even billions) of dollars of capital to flow into the industry.
Not to mention that the weed black market, which is still thriving even in states where the drug has been legalized, would become more of a focus of law enforcement, allowing a coordinated effort to clamp down on that black market. That, in turn, would send consumers flooding toward the legal cannabis market, which would likely result in even more gains for marijuana stocks.
Another positive for pot stocks from a Sanders victory would be his interest in negotiating drug prices with Canada, something that could have a knock-on effect for the medical marijuana business.
While all these things could eventually take place even if Sanders doesn’t win, the timeline would be radically reduced if Sanders takes the White House. So while marijuana stocks are pretty much inevitably going to grow for years to come, Sanders being elected president would accelerate that process exponentially.
Renewable Energy Stocks
Another big beneficiary in the stock market if Sanders wins the presidency would be the renewable energy sector.
One of the staunchest opponents of climate change, Sanders would pour billions of dollars into the renewable energy sector, leading to massive gains among renewable energy stocks.
We’re already seeing countries the world over pour trillions of dollars into renewable energy in order to ward off a potential climate disaster.
One UN report estimated that worldwide investment in new renewable energy capacity (not including large hydro) would be $2.6 trillion from 2010 to 2019. (Source: “Global Trends in Renewable Energy Investment 2019,” United Nations Environment Programme, last accessed March 9, 2020.)
That’s more than three times what was invested during the previous decade.
Meanwhile, a Bloomberg L.P. report showed that global investments in clean energy totaled more than $332.0 billion in 2018. (Source: “Clean Energy Investment Exceeded $300 Billion Once Again in 2018,” Bloomberg NEF, January 16, 2020.)
And more is likely on the way. Therefore, renewable energy stocks are poised to continue gaining as the sector receives huge influxes of government cash and grows around the globe.
By that I mean that richer countries will be the first to adopt the new and expensive technology, but as time goes on we can expect it to get cheaper. Then we will see increased adoption rates, meaning a rolling wave of continuous stock market gains, potentially for decades to come.
Which is to say that this industry is is a well poised to exponentially grow in the near future, making it a must-watch sector.
The fact is, we’re in a time of flux. And in a time of flux—both technologically and politically—there are often great opportunities to make big money in the stock market.
In the technology market, we’re going to see a higher adoption rate of green energy. That process is likely going to mean big gains for companies operating in the sector, as well as for investors in renewable energy stocks.
Meanwhile, the marijuana industry is looking forward to what has long been considered the Holy Grail of pot stocks: U.S. marijuana legalization.
With that reality seeming ever more likely by the day, you can bet that investors will run back to the marijuana sector as we approach federal U.S. legalization, setting off a chain reaction of massive gains among pot stocks.
Overall, these two industries are among the best situated ones in the world right now.