Cannabis stocks went on a tear on Thursday with news that United States President, Joe Biden, pardoned thousands of Americans for “simple” cannabis possession convictions under federal law. The long-awaited ruling is both a symbolic and dramatic step forward for the United States, as the country heads towards decriminalization of cannabis, and acknowledging the disproportionate impact that these convictions have had on people of color in the US.
“[N]o one should be in jail just for using or possessing marijuana.” Biden said in his statement to the press, noting that his administration is taking steps to end the US’s “failed approach to marijuana”
Biden hopes that this move will alleviate the “collateral consequences” that stem from cannabis possession convictions. In fact, having a possession record in the US, can impact a person’ ability to seek employment, secure housing, or pursue an education.
The President’s pardon additionally extends to the people of the District of Columbia. And Biden is encouraging other state governors to follow suit and extend pardons to people convicted of state cannabis offenses.
In the US, state offenses for cannabis account for most possession cases. Truth be told, the Administration admitted that the there is no one in federal prison for “simple possession” leading to the assumption that the 6,500 Americans that would benefit from the pardon, are for state offenses.
Biden didn’t stop at a just a pardon for minor offenses. He also called for the secretary of Health and Human Services along with the attorney general to expedite the review of how cannabis is classified. Surprisingly – or not really! –, cannabis is still considered a schedule I drug, (think: LSD and cocaine), and therefore remains federally illegal in the United States. However, since 2012 when Colorado and Washington became the first states to legalize cannabis, more and more states are slowly legalizing cannabis, with now nearly 40 states with cannabis approved for recreational use.
Should Biden be successful in his quest to reclassify cannabis, it would be a momentous step forward towards a broader legalization. Already, the majority of Americans approve the move. Additionally, given the state-by-state governing of cannabis, federal legalization could go a long way to bring overarching change and cohesion to the cannabis industry.
Good News for Cannabis Stocks
Everyone loves good news, even the stock market. Following the President’s address on Thursday, investors similarly rejoiced as lagging cannabis stocks (Tilray, Canopy Growth, Sundial Growers) climbed more than 20% with the news. The gains, unfortunately, were short-lived and stocks dipped back again on Friday, except for Roundhill Cannabis ETF, which saw an additional 11% bump on Friday.
Despite all the gains on Thursday, cannabis stocks are still in the red, with Tilray down 99% from its all-time high of $300 per shar in 2018…. Yikes.
Nevertheless, with the hope of more good news for the state of cannabis in the US in the future, we’ve got our fingers crossed Thursday’s move by US President Biden will be the first of many positive changes for the cannabis industry in the US.