House of Representatives Passes the MORE Act
It’s already been a historic year.
And recently, another significant moment unfolded.
Last week, my phone and email started blowing up as the U.S. House of Representatives passed the Marijuana Opportunity Reinvestment and Expungement (MORE) Act of 2020.
After only an hour of debate, the bill was approved by a wide margin, 228 to 164.
This is another major milestone for the American cannabis industry. The MORE Act is not only a sweeping social justice reform measure, but also legislation that decriminalizes cannabis at the federal level. It would essentially do for cannabis what the 2018 Farm Bill did for hemp.
The legislation would unlock billions upon billions of dollars for the U.S. cannabis industry.
And almost as important, it would free cannabis companies from the destructive Section 280E of the federal tax code. This prevents marijuana businesses from taking deductions for ordinary business expenses.
Friends, colleagues and investors wanted to know my thoughts on what this means for pot stocks.
And that’s what I’m going to break down for you today.
Stonewall. Stall. Repeat.
I think there’s probably no more pertinent point than this one…
The MORE Act passed a full House vote slightly more than a year after its historic passage in the House Judiciary Committee.
That demonstrates how quickly the legislative front is evolving. But it also shows how pervasive the efforts are to stall its progress.
In 2019, the Secure and Fair Enforcement (SAFE) Banking Act cleared both the House committee and the floor votes. It was the first pro-marijuana piece of legislation to ever do so.
Under Senate Majority Leader Mitch McConnell’s reign, the SAFE Banking Act has never seen the light of day in the Senate. And it likely never will.
The MORE Act will undoubtedly suffer the same fate. Its pages are collecting dust, as Senate Republicans stonewall any efforts to legalize cannabis or to provide the industry access to the same financial instruments every other industry in this country enjoys.
Cannabis is now a 100% partisan issue.
For example, in the House vote on the MORE Act, 158 of the 164 nays were from Republicans.
But this doesn’t surprise me.
Vice President-elect Kamala Harris is one of the lead co-sponsors of the MORE Act. And I’ve repeatedly stated this year that when the House passed the MORE Act – because it no doubt would – it would largely be a symbolic gesture.
But I don’t believe that the Senate, in its current form with McConnell as majority leader, will ever give the time of day to cannabis legislation.
Now, the Democrats could win both runoff elections in Georgia. This would flip the Senate and give Democrats the majority. Obviously, that would make the path forward for cannabis legalization much easier.
That said, there’s still a route to expansion for the industry that bypasses Congress.
Fight the Power
The MORE Act’s passage this year was another historic moment for the cannabis industry.
But it could prove to be a hollow gesture, much like the SAFE Banking Act passage was a year ago.
The MORE Act will undoubtedly die in the Senate this legislative session. And the process will have to start all over again in January when the new session begins.
But here’s the deal… The MORE Act takes the federal government out of the industry. It clears the path for states to license and run cannabis as they see fit, without federal interference.
This year, I stated that no matter who won the White House on November 3, the clear winner would be cannabis.
That’s because there were five states – Arizona, Mississippi, Montana, New Jersey and South Dakota – with legalization measures on their ballots.
Voters in all five states approved these measures.
And now, 15 states allow for adult-use and 36 have medical use.
Well, I think there are another half-dozen states that could expand their markets next year!
I think my home state of Maryland, which already allows medical use, could debate adult-use legalization.
Connecticut’s governor has already talked about legalizing adult-use in 2021.
I would also keep an eye on New Mexico, New York, Rhode Island and Virginia.
Though it’s important to remember that 13 of the 15 states that have legalized adult-use have done so through voter initiatives. Illinois and Vermont did so through state legislative measures.
As I’ve stated many times before, it’s my opinion that the U.S. cannabis market will be worth more than $80 billion by 2030.
Large U.S. multistate operators such as Curaleaf Holdings (OTC: CURLF), Green Thumb Industries (OTC: GTBIF) and others will be the biggest winners. Meanwhile, my favorite ancillary plays, GrowGeneration (Nasdaq: GRWG) and Innovative Industrial Properties (NYSE: IIPR), will soar to new all-time highs.
I believe states will continue to lead the charge of the U.S. cannabis market expansion, regardless of who’s in charge or what’s happening at the federal level.
The best support the federal government can give is to simply get out of the way… as well as do away with Section 280E.
But in the meantime, American cannabis will keep on growing like a weed!
Here’s to high returns,
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