Biden’s Marijuana Pledge and its Impact on Stock Market Biden’s Marijuana Pledge and its Impact on Stock Market

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By Ronald Tech

President Joe Biden’s campaign promises include rescheduling marijuana from Schedule I to III, which might positively impact the stock market and fuel stock rallies.

Senior analyst Pablo Zuanic of Zuanic & Associates has emphasized the potential impact of reclassifying marijuana on the cannabis stock market.

Factors Affecting Market Influence

The extent of the impact is influenced by the timing and manner of the announcement, the duration of the comment period, and the content of the DEA memo.

Pharmaceutical and alcohol lobbies, reactions from liberal and conservative sides, and the swiftness of the process before the election are highlighted as critical factors.

Uncertainties And Regulatory Framework

The DEA’s impending decision may align with the traditional approach of moving marijuana to Schedule III, but uncertainties persist regarding the DOJ’s final stance and the regulatory framework.

Zuanic questions whether the DEA will recommend a regulatory framework consistent with other Schedule III substances or opt for descheduling altogether.

Stocks are positioned favorably if the conventional wisdom route is taken, but any alternative outcome could have adverse effects on the industry.

Biden’s Ability to Fulfill Cannabis Promises

The report also delves into the fulfillment of Biden’s promises related to decriminalization, medical cannabis legislation, state autonomy on marijuana laws, and record expungement.

It points out the complexities of federal versus state jurisdiction, legal intricacies of rescheduling versus descheduling, and potential challenges in enforcing laws within the illegal market.

Zuanic’s analysis indicates that while progress is being made toward campaign promises, regulatory challenges complicate their full realization.

Considerations for Investors

Investors are advised to evaluate not only growth potential but also profitability and debt leverage when considering cannabis stocks. The report recommends a cautious approach to trading given the variations in stock performance and valuations across the sector.

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Zuanic advises a nuanced approach to stock evaluation considering potential growth, profitability, and debt leverage. He also stresses the importance of understanding the implications of the DOJ’s actions on stock prices.

Zuanic anticipates bullish stock performance if the DOJ announces a regulatory framework before the election, but doubts the likelihood of an early release. He also expects the industry to push for aggressive tax provisioning and payments regardless of the decision’s timing.

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