(MENAFN- Perceptiona) The road to cannabis reform in the US has been very tough on investors and operators alike. An early look into Biden's presidency had investors supremely optimistic on cannabis reform occurring under the new Democrat regime and valuations quickly reached all-time highs in February 2021. However, political meandering meant that valuations in the sector dwindled over the months as Democrats stuck to a more comprehensive approach in favour of a business friendly incremental approach.
“Many months have passed with numerous attempts at reform running through Congress; this includes the SAFE Banking Act, the STATES Act, the CLIMB Act, the CAO Act, the MORE Act and many more. However progress remained slow with Senate leadership trying to find a fine balance between social equity provisions and business friendly legislation. However, over the past few months we have written about and gotten more optimistic on an enhanced version of the SAFE Banking Act being tabled and passing the Senate in the upcoming lame duck session. Discussions have been mostly behind closed doors but reports of progress have been encouraging.
“However, in a surprise announcement, President Biden revealed expungement of all small scale federal marijuana offences and a review of cannabis as a scheduled substance in the United States in a bid to gain popularity into the November midterm elections. The validation of cannabis reform from the top administrator in the country has led to a violent reaction for stock of cannabis and related businesses. This action opens to door for federal decriminalization as well as encourages near term business friendly reform which could potentially in the second bull market in US cannabis.
“The price action should be a boon for medical cannabis and ancillary business verticals held within CBDX. With further clarification and setting of timelines we anticipate this to be a secular pivot in the cannabis industry rather than a one-time revaluation. There is potential to recognize a market opportunity of up to $80B in the US alone and such action would send shockwaves throughout the western world. We are closely watching for next steps but are optimistic that those who have long endured the pain of the cannabis trade will soon see the bigger thesis come to life.”
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