Rescheduling Cannabis: What The First Pro-Legalization Presidential Ticket Could Mean For The Industry

LKP Impact Consulting CEO Laurie Parfitt remains cautious about the immediate effects of the first explicitly pro-cannabis legalization presidential ticket of Democratic candidates Kamala Harris and Tim Walz.

What Happened: When asked how the pro-legalization stance at the highest levels of government could impact federal cannabis policy, Parfitt — who will discuss these issues in depth at the upcoming Benzinga Cannabis Capital Conference — acknowledged the moment’s significance.

"For the first time, higher levels of government are positively engaging with the cannabis industry," Parfitt, a seasoned industry executive with over two decades of experience, said.

Harris’ stance would be a departure from past administrations, including that of President Joe Biden.

Biden previously supported the “War on Drugs” during much of his early political career as a U.S. senator, but shifted his position as U.S. president.

Parfitt emphasized that it remains to be seen how much of a priority cannabis reform will be amid other pressing issues, such as inflation, immigration, and global challenges like Ukraine or the ongoing conflict in the Middle East.

"Under a potential Harris-Walz administration, the rescheduling of cannabis might be viewed and promoted as a major victory, potentially delaying further efforts toward full federal legalization," she said.

Parfitt noted that the industry had initially anticipated federal legalization within four to six years, but rescheduling could reduce the urgency to push through full legalization.

"That being said, there might be other ways that the administration could support the industry, like safe banking," she added.

See Also: Florida Cannabis Ballot: NFL’s Ricky Williams Backs Legalization, New Ad ‘Hypocrisy Of Alcohol Vs. Marijuana’

Why It Matters: The prospect of rescheduling has already begun to affect investor confidence, though the results have been mixed so far, Parfitt says.

"The announcement that Health & Human Services recommended rescheduling cannabis and initiated the process has indeed enhanced investor interest and influenced the strategic direction of cannabis companies, albeit in strategic pockets of the industry," she adds.

Parfitt pointed to the broader capital markets crisis of late 2022 and early 2023, which hit the cannabis industry particularly hard due to its limited pool of investors and lack of banking options. The result was a period of stagnation, with investment activities mainly on hold, similar to the period from 2019 to 2020.

However, the announcement of rescheduling earlier this year marked a turning point.

"While this development has not yet resulted in a significant influx of additional capital, it has reignited interest among investors," Parfitt explained. "The hope is that we will start to see capital flow back into the industry so that operators can start making longer-term decisions that will set their businesses up for scale and success."

What’s Next: As the cannabis industry prepares for potential changes in federal policy, businesses and investors are watching closely for any developments that might help stabilize the market.

Parfitt's insights into how the political landscape impacts the industry will be a crucial topic of discussion at the Benzinga Cannabis Capital Conference, where industry leaders will gather to explore these issues and more.

While the cannabis industry prepares for a potential shift with rescheduling, Parfitt notes, "It remains to be seen how much of a priority this issue will be."

For now, stakeholders are waiting for the next steps and hope for a regulatory environment that allows businesses to thrive.

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Photo: Benzinga edit with images by Lawrence Jackson via Wikimedia Commons and Alesia Kozik via Pexels