Why Congress finally voting on cannabis legalization is a 'watershed moment': CEO

The House of Representatives voted Friday to approve a bill backed by Vice President-elect Kamala Harris that seeks to not only decriminalize marijuana at a federal level, but also expunge certain cannabis offenses.

The bill, named the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, passed by a House vote of 228 to 164 but is unlikely to be taken up by the Republican-controlled Senate.

Despite that fact, advocates used the opportunity to gauge where support was at in Congress and spotlighted just how quickly views on cannabis have evolved in the last few years. According to a November Gallup poll, a record 68% of Americans support legalizing cannabis. That’s up from 60% in 2016.

“It really is a watershed moment,” Trulieve CEO Kim Rivers told Yahoo Finance Live in a Wednesday interview ahead of the vote. “Now, of course, the devil is in the details and we’ll start to talk about what [legalization] means, but to even have the conversation around the actual policy is in and of itself a huge step.”

Publicly traded multi-state cannabis companies like Florida-based Trulieve (TCNFF) have rallied since the election, not only due to the Democratic win at the top of the ticket, but also due to the fact that all five statewide cannabis measures up for votes this election cycle were approved by voters. According to industry firm New Frontier Data, those approved ballot measures in Arizona, Mississippi, Montana, New Jersey and South Dakota could add $9 billion in market size to the U.S. cannabis industry.

Despite more states continuing to legalize cannabis, the overhang at a federal level has long had an impact on cannabis companies that are taxed at higher levels and have been blocked from accessing normal financing. The MORE Act, if signed into law, would change both those issues and allow U.S. companies to list on major stock exchanges.

The tax burden being mitigated is perhaps most notable for companies like Trulieve, which paid more than $43 million in federal taxes in 2019. Changes in tax policy that would stem from cannabis being federally rescheduled could reduce the company’s tax burden by more than $16 million, Rivers previously said.

However, as analysts at Cowen have highlighted in the weeks leading up to the historic House vote, the hope of seeing the MORE Act move beyond the House is still likely far off. As they noted, it was key to watch the vote margin and “whether re-elected Democrats vote against the MORE Act or if re-elected Republicans vote in favor of the bill” to gauge cannabis momentum and whether legalization has support to press the issue further next year. Notably, Rep. Matt Gaetz (R., Fla.) delivered an impassioned speech in support of the MORE Act and urged fellow Republicans to push the federal government to follow states like Florida that have already decriminalized marijuana.

“The federal government has lied to the people of this country about marijuana for a generation," he said Friday. “My Republican colleagues today will make a number of arguments against this bill but those arguments are overwhelmingly losing with the American people.”

Beyond direct business implications for the sector, progressives are also cheering the added focus the MORE Act gives to rectifying the impact on communities of color that has stemmed from America’s war on cannabis. According to Wes Moore, the CEO of anti-poverty organization Robinhood, the MORE Act could signal a major step in addressing a criminal justice system that has widened the nation’s racial inequality problem.

An earlier version of this article was originally published on December 3, 2020.

Zack Guzman is an anchor for Yahoo Finance Live as well as a senior writer covering entrepreneurship, cannabis, startups, and breaking news at Yahoo Finance. Follow him on Twitter @zGuz.

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