“The complete restoration of America and the revolution of common sense.”
Donald J. Trump from his second inaugural address.
Really?An elected leader pushing “common sense?” Should cannabis investors be optimistic about this view? If Trump sticks to this common sense theme, I actually think the U.S. could see meaningful cannabis reform under his watch. It would also catapult cannabis stocks making them some of the best performers of the year.
That would be one of his most lasting legacies. Now is the time for him to steal that victory from the Democrats that failed in this regard.
During the 2020 presidential election and Congressional runoff in Georgia, cannabis patients, researchers, and investors were given a momentous regulatory gift. Biden, Harris, and a democratically controlled Congress presented the best-case scenario for real reform. Historically, Democrats support cannabis reform.
A look at the North American Marijuana Index (NAMMAR) clearly illustrates investor excitement during that time. Unfortunately, this proved to be a giant disappointment.
Conversely, the election of Donald Trump and a Republican held Congress in November 2024 created a decisively different response…
The market believes Republicans are not the friend of meaningful cannabis reform. That is not wrong. This is the prior president that gave us Jeff Sessions and “Ok Boomer” thinking about cannabis.
Additionally, of the states I classify as “Trying to Do the Right Thing” and “The Heads in the Sand” are 100% Republican controlled
When it comes to meaningful cannabis reform, Republicans have been anything but rational nor governing with “common sense.”
But we have a new sheriff in town.And I’d like to speak to him directly about the current lack of common sense in cannabis policy. Let us hope this makes it to his desk…
Dear Mr. President,
I applaud you for including the words “common sense” during your inaugural talks.
There is too little of it across the world these days. As of today, it looks as if you are following through with your major campaign promises.I would like to add a very important issue to your list…meaningful cannabis reform.
The current state of cannabis affairs is anything but rational or guided by common sense.In fact, it has not been for decades.I truly hope your administration has the courage to get this done where the Democrats could not.
Cannabis is riddled with what I call “policy conflict.”I would like to mention ten of my favorites to you.As the saying goes, you cannot make this stuff up.
Throw them in jail. Despite 73% of states having some type of legal cannabis program, nineteen states continue to jail people for cannabis possession creating a criminal record, hamstringing lives and careers.
Does that make sense?
Schedule 1 narcotic. Cannabis is considered on par with deadly drugs such as heroin and LSD which are deemed to have no medical benefits and high probability for abuse. For context, Fentanyl is a Schedule 2 drug and considered less dangerous than cannabis.
Does that make sense?
Epidiolex, an FDA-approved drug, is currently in use for certain seizure diseases. It is derived from the cannabis plant. The last I checked; the FDA is a federal agency. How could a federal agency approve a drug sourced from cannabis – a federally illegal substance? Moreover, would not the existence of an FDA approved drug fly in the face of cannabis as a schedule 1 drug having no medical benefit?
Does that make sense?
The 2nd Amendment or my health?The Federal Gun Control Act of 1968 and the Federal Omnibus Consolidated Appropriations Act of 1997 forbid cannabis users from owning guns. Current cannabis policy makes lawful citizens choose between obtaining a medical cannabis card (to treat the side effects of chemotherapy for example) and their Second Amendment rights. Conversely, consuming a bottle of whiskey a day has no connection to gun ownership. Ask yourself this, who would you rather meet in a dark alley – a group of drunk guys with guns, or a group of high guys with guns?
Does that make sense?
Billions of dollars.As of the most recent year available (mostly 2023 and 2024), state governments are collecting over $20 billion a year in cannabis tax revenues.The Federal government has collected zero. The potential is far greater as programs continue to expand and tax law evolves.
Does that make sense?
Section 280e forbids normal business deductions. Despite operating in legal state markets, U.S. cannabis businesses pay taxes on their gross income and not their net income. This is because they are not allowed to deduct the normal expense items like every other U.S. company. As a result, effective tax rates are commonly 70% and higher.
Does that make sense?
Washington ignores “We the People…”.A January 2024 Pew survey found that a net 88% of adults support full legalization(57%) or medical only legalization(32%). With the U.S. population overwhelmingly supportive of legal cannabis, why are lawmakers so hesitant to reform outdated and dangerous cannabis laws?
Does that make sense?
Mitch McConnell hates cannabis.Despite his home state of Kentucky being one of the largest producers of hemp (a cannabis plant), he will not vote for even the smallest of incremental federal reforms such as safe banking.
Does that make sense?Wait…it might…
Intoxicating synthetic cannabis is plentiful. Delta-8 THC and other synthetic cannabis is legal and unregulated at the federal level despite its psychoactive properties often more potent than the actual stuff.This is because it is mostly developed from hemp plants and CBD – which was legalized by the 2018 Farm Bill. Is that what Mitch is protecting?Unregulated, untested, synthetic cannabis products sold at gas stations across the country?
Does that make sense?
NO to American companies. Canadian cannabis companies such as Canopy Growth and Tilray are openly permitted to have their stocks traded on major U.S. stock exchanges. This allows them a robust and full market of investors offering needed capital. Conversely, innovative U.S. cannabis companies – many with far better financial results - are forbidden. Aren’t they selling the same product? Mr. President, you have been critical of Canada. Why are we letting them access to the biggest and best financial markets in the world while our own U.S. innovators scramble for capital crumbs on the pink sheets?
Does that make sense?
Mr. President, these are but a few of my favorite examples of the monumental idiocy embedded in the U.S. cannabis regulatory framework. There are many more examples.
Can we as a country get over this 50+ years of political agenda, war on drugs nonsense that has done far more harm than actual cannabis usage? This $50+ billion market already exists. It is not going away. Let us regulate, tax, and nurture this industry like alcohol, tobacco, health & wellness, and drug development.
Like you, I do not use cannabis. It is not for me. But I am a healthcare advocate, stock analyst, and purveyor of common sense in everything I do.
Please get this done. It would be the greatest of your lasting legacies.
Cheers,
Thomas Carroll
RuxtonPark Research
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Important Disclaimer. Nothing in this report or anything written by RuxtonPark Research, Thomas Carroll, or affiliated research should ever be considered individual investment advice. This is purely for information and educational purposes only. Every investment involves risk, and participants should do ample due diligence, seek the counsel of registered investment advisors, and only risk what they can afford to lose.
