The second week of April was the most critical week the legal marijuana industry has seen in the past five years, in the opinion of 420 Investor founder Alan Brochstein.
Like many who not only advocate legalizing marijuana but also hope to profit from the sale of medicinal and recreational weed, Brochstein was celebrating news that two of the nation’s most powerful Republicans had changed their minds about marijuana that week.
“This is likely to have a profound impact on the ability of both private and public companies to access capital. The fact that the cannabis industry has been built on a foundation of quicksand subject to the whims of the federal government has been an almost insurmountable challenge,” Brochstein told Benzinga.
Derek Peterson, CEO of Terra Tech, the largest publicly traded cannabis company in the U.S., said in a statement to PJM that former House Speaker John Boehner’s (R-Ohio) appointment to the board of Acreage Holdings — an investment firm with a solid footprint in the legal weed industry — is “a strong indicator of the political and social winds blowing in favor of legalization.”
Boehner, a longtime opponent of legalizing marijuana, did an abrupt 180-degree turn April 11 when he joined the Acreage Holdings Board of Directors.
Former Massachusetts Gov. Bill Weld, a Republican who was the Libertarian Party’s 2016 vice presidential nominee, also joined the Acreage board the same day.
“While we come at this issue from different perspectives and track records, we both believe the time has come for serious consideration of a shift in federal marijuana policy,” Boehner and Weld said in a joint statement.
“It seems that each day or week another material event takes place in our industry that validates and helps promote the cannabis marketplace overall,” said Jim Pakulis, CEO of TransCanna Holdings Inc., a privately held firm specializing in branding and logistics in California for cannabis-related companies, in a statement provided to PJM.
No matter what brought about the epiphany that changed Boehner’s mind, Erik Knutson released a statement to PJM in which he said, “Luckily for all of us, the Reagan-era drug warrior platform is dying.”
Fortune reported shares of the biggest legal marijuana companies shot up from 1 percent to more than 4 percent after Boehner’s surprising change of heart coupled with the news he was joining the Acreage board.
Pakulis couldn’t have known how prescient that statement would turn out to be. Just two days after Boehner shocked the marijuana industry came another watershed development that pushed the legal marijuana industry even farther forward.
Colorado Sen. Cory Gardner (R) said April 13 that President Trump promised him that he would support the protection of states that have already legalized marijuana. In exchange, Gardner vowed to stop blocking Trump’s Department of Justice nominations.
“Since the campaign, President Trump has consistently supported states’ rights to decide for themselves how best to approach marijuana,” Gardner said in a statement. “Late Wednesday, I received a commitment from the president that the Department of Justice’s rescission of the Cole memo will not impact Colorado’s legal marijuana industry.”
Within minutes after Gardner released those two sentences, the Global Cannabis Stock Index rose 8.8 percent to 112.61.
Rep. Earl Blumenauer (D-Ore.) described the Trump-Gardner deal as “another head-spinning moment.”
But then again, Blumenauer noted, we are talking about Donald Trump.
“We should hope for the best, but not take anything for granted. Trump changes his mind constantly, and Republican leadership is still in our way,” Blumenauer said in a statement. “Momentum is clearly building in the states and here in DC. The tide is changing. Now is the time to redouble our efforts.”
Still, Blumenauer also said that coupling the Boehner announcement with Sen. Gardner’s news about Trump’s new position, it was hard for legal pot advocates to be anything but optimistic.
“Can you feel the earth shifting for lasting marijuana reform?” Blumenauer, the co-founder of the Congressional Cannabis Caucus, tweeted.
Brochstein isn’t ready to go that far. He isn’t expecting complete legalization of marijuana at the federal level. But he said a new “hands-off approach” from Washington would result in a continuing marijuana stock rally.
“I expect the market to quickly price in a more optimistic scenario that few expected,” Brochstein wrote. “I believe an appropriate analogy may be the election of Justin Trudeau as the Prime Minister in Canada in October 2015, which fueled a massive rally in Canadian cannabis stocks.”