It doesn’t matter if you have a disdain for politics -the marijuana industry is heavily tied to legislative machinations. When it comes to U.S. marijuana legalization, which is sure to generate the most momentum in the market due to America’s size and consumer spending potential, we’ve just encountered what could be a huge boon for marijuana stocks.
And, surprisingly, the good news comes from a bit of politicking that has nothing (directly) to do with marijuana stocks.
Allow me to explain.
Recently, the House and Senate passed a bipartisan infrastructure bill that, among things, seeks to improve roads, bridges, internet, freight and rail, and a whole host of other needed infrastructure improvements.
The important takeaway for marijuana investors, however, is not so much what the bill contains (though that does also bode well for pot stocks and we’ll go over that below) but instead is how the bill passed.
This bipartisan infrastructure bill was exactly that, bipartisan. A rare, rare word to see coming out of Washington these days. The bill had the support of 69 senators. On divisive spending bills like infrastructure, which has a price tag of over $1.0 trillion, this is rare indeed. (Source: “Senate passes $1 trillion infrastructure bill after months of intense bipartisan talks,” CNN, August 11, 2021.)
But here’s something that it proves: bipartisanship isn’t completely dead.
For years, it was looking like we’d entered some ossified state of democracy where no politician was willing to compromise on even common-sense spending.
The political deadlock ensured that only when in control of slim majorities could Congress actually, you know, do its job and pass legislation.
And that was the exact problem we’d encountered with marijuana legalization in the U.S.; with only a one-seat majority in the Senate, any marijuana legalization bill would have to include either every Democrat or, if they lost some of the more conservative senators, they’d need a Republican to cross the aisle.
Again, that seemed downright unfathomable . . . until today.
This bipartisan bill shows that there can indeed be compromise between the two ruling parties, even if it is rare. And considering that this is largely voluntary spending (I mean, that point could be argued when you see bridges crumbling and roads in disarray and people stranded in internet wastelands, but I digress) that’s even better news for marijuana stocks.
You see, what this is telling us is that there is room for a potential bipartisan marijuana legalization bill in the U.S.
What would it take? A lot of compromise, to be sure, and there certainly would be some sticking points. Democrats, for instance, often want to include full expulsion of non-violent marijuana-related crimes and the release of the people locked up for said crimes.
Many conservatives on both sides of the political divide would likely have a problem with this policy.
And there’s also a question of taxation, regulation, licensing, packaging, marketing, etc.
In other words, there’s a lot to consider.
The good news is that we now have dozens of successful pilot programs in states across the Union from which the feds could pick their favorite aspects.
That would make creating a bill from scratch a lot faster. And it could also help eliminate some of the potential sticking points that the parties might face when passing this hypothetical legislation.
But, overall, this is really good news. Considering that there are many pro-business Republicans that would love to see marijuana legalized, there now exists an opportunity for there to be some real bipartisan action on pot legalization.
That doesn’t mean it’s going to happen overnight, of course, but it does mean that we won’t necessarily have to wait for a supermajority of one party.
The other good news is that infrastructure bills are almost always solid investments. Think of the highways and how much revenue they’ve generated over the decades-we’re talking billions.
This infrastructure bill, while unlikely to reshape America in the same was as the railroads and highways of yesteryear did, will still help drive commerce and modernize shipping channels.
All this to say that investment in infrastructure is almost always a boon to businesses, and marijuana stocks will be no exceptions.
If they can cut down on shipping time as a result of these road improvements and other aspects of the bill, then we’ll see that efficiency reflected on marijuana stocks’ quarterly reports.
And considering that investors are mainly concerned with growth right now (as they should be-this is a emergent industry, after all), then any opportunity to show revenue gains quarter over quarter is a great way to stimulate share price growth.
All this to say that this bill, while not monumental for marijuana stocks, certainly has more than a few features that should have people excited about the future.
What’s more, it’s shown that bipartisan action is possible in the U.S. And marijuana legalization is something maintains bipartisan support.
I’ve written for years about how politicians can only deny the will of the people who elected them to office for so long. Eventually they’ll have to make a move on marijuana legalization.
And in this case, we could see that move much earlier than I first expected.
Marijuana has always been closely tied to the legal machinations of the U.S. But right now, with some actual bipartisan action taking place, we have cause for celebration that there is hope that Congress can, you know, actually do something for once and work together to legalize marijuana.
Considering how popular that move is with the American people, I’d say it’s only a matter of time, but when it comes to Congress, anything absurd and stupid is possible.
Still, this infrastructure bill is a strong start, and will also have some positive direct consequences as well for marijuana stocks, generating even more optimism in the market in my eyes.