Harris Vs. Trump: Will Cannabis Rescheduling Survive Biden's Exit? Analyst On Potential GOP Victory

The recent announcement that President Joe Biden dropping out of the 2024 election campaign has stirred significant reactions across various sectors, including cannabis. Pablo Zuanic, senior analyst at Zuanic & Associates, outlines the implications for the cannabis industry in his recent report.

Market Reaction And Political Context

Zuanic notes that the news of Biden stepping down has been perceived positively for cannabis stocks. With Vice President Kamala Harris now more likely to face Donald Trump in the election, the market has responded optimistically.

Notable movements include Canopy Growth Corporation CGC increasing by 17%, several large producers (LPs) rising by 9%, and the AdvisorShares Pure US Cannabis ETF ARCA gaining 5.7%.

According to Zuanic, Harris has a better chance than Biden of defeating Trump in November, which could drive higher turnout for Democrats and reduce the likelihood of a Republican sweep. "A Harris vs. Trump election will likely bring cannabis more to the forefront of the overall political debate," Zuanic says.

He cautions that this heightened focus could make cannabis a more partisan issue, increasing risks if Trump were to win.

“Those who only wish for Trump to say 'leave it to the states' forget that would only mean status quo but no rescheduling,” Zuanic notes.

Rescheduling And Regulatory Implications

Zuanic emphasizes the narrowing path to cannabis rescheduling despite these developments.

He outlines several potential scenarios, from the Department of Justice (DOJ) deciding hearings are unnecessary and publishing the final rule soon, to prolonged delays due to administrative law judge (ALJ) reports and DEA involvement. "Yes, a final rule published before 12/21/24 is possible, but the roadblocks are mounting." 

Zuanic suggests that the Biden administration will prioritize completing the rescheduling process before Inauguration Day. However, he raises concerns about the DEA potentially delaying the process. "We believe the DOJ and White House will have some decisions to make, with the DEA's response to public comments being a significant factor." 

The Congressional Review Act could reverse the ruling if Trump secures a majority in both chambers. If not, Zuanic says he would need to start a new rescheduling process “from 3 to 1,”  which could take at least two years.

Future Scenarios And Market Sentiment

In the event of a Trump victory, Zuanic outlines possible actions, such as reversing rescheduling through the Congressional Review Act or initiating a new process to revert cannabis scheduling. "If the final rule has not been implemented before 1/20/25, we are doubtful his administration would continue the process," Zuanic adds.

Zuanic concludes that for cannabis stocks, a Harris victory is crucial. "In our view, Trump voters owning cannabis stocks are in denial. Harris would at least finish rescheduling and likely push forward other reform initiatives around cannabis," he said.

Read Next: What Is The Trump Factor? Justice Dept's Impact On Cannabis Rescheduling, Stocks And Investments

These issues will be among the hot topics at the upcoming Benzinga Cannabis Capital Conference in Chicago this Oct. 8-9. Join us to get more insight into what the wave of weed legalization means for the future of investing in the industry. Hear directly from top executives, investors, advocates, and policymakers. Get your tickets now before prices go up by following this link.

Photo: U.S. Senator Kamala Harris speaking with attendees at the 2019 Iowa Democratic Wing Ding at Surf Ballroom in Clear Lake, Iowa. By Gage Skidmore via WikiCommons - CC.