What the Democratic Senate victory means for the legalization of cannabis
The Democratic Party won its 50th seat and the last of 100 Senate seats not long ago, according to the Georgia state poll. Democrats now control the House of Representatives, the Senate and the Presidency. Does this mean that American citizens can expect cannabis to be legalized?
U.S. cannabis stocks are skyrocketing after the Democrats' Senate majority victory was announced at the last minute thanks to the party's victory in a state race in Georgia. A majority of 50 and 60 is required for the approval of a law.
With 50 votes in the Senate, Democrats equalize the 50 votes of Republicans so that the Senate is split evenly among the parties. However, Vice President-elect Kamela Harris will carry some weight as the next President of the Senate. This is how the control of the Sénatson control will therefore pass to the Democrats.
What is the link with legalization? The Democratic Party has been leading the MORE law for some time, calling for legalization at the federal level. As the bill reads, the criminalization of cannabis users in federal law would be abolished, criminal records would be removed retroactively, and a federal tax would be imposed on a legal adult commercial market.
The proposal is at an advanced legislative stage and has already received historic approval from the House of Representatives - the lower house of the US Congress. The next step in the legislative process is a vote in the Senate, so now that the Senate and the Presidency are in the hands of the Democratic Party, the chances of approval increase in the Upper House as well.
On the other hand, we should not forget that unlike the House of Representatives, which requires a majority of 51 votes, the Senate needs a minimum majority of at least 60 votes. In other words, to pass the MORE law, Democrats will have to work hard to garner opposition votes - which will certainly not be easy to implement.
Investors are also recognizing the potential for legalization, and as a result, cannabis shares in the U.S. stock market have soared several percent in recent hours. At the top of the ranking are Cronos, up 15%, followed by Tilray and Hexo, up 13%, followed by Aphria and Canopy with an increase of 11% and "Organigram" and "Aurora" with 9% and 5%.
In principle, the Republican Party has opposed the MORE law and is working to advance the STATES Act which calls for the continued prohibition of cannabis in federal law, but to allow the 50 states to approve the legalization in their territory if they wish, as is currently the case on the basis of 'Cole Memo from the time of former President Obama.
One bill that is likely to be successful is the SAFE Act, which requires federally regulated banks to accept what is still defined in US law as "drug money." This definition prevents free trade for cannabis companies in countries that have approved legalization or models of medical cannabis and does not even allow industry practitioners to open a bank account.
New Vice President Harris updated her stance on cannabis in the last election campaign when she announced her support for legalization following her previous opposition. The new president, Joe Biden, does not support legalization, but has said he will promote the abolition of the criminalization of consumers.
To date, 15 out of 50 US states have approved cannabis legalization after 4 states joined the list in the last election in November. New York State is estimated to be the 16th state in the coming months, after which more will surely join.