2020 Election & Cannabis Legalization

A lot of cannabis operators are paying close attention to the upcoming 2020 presidential election because the outcome could have a major impact on the U.S. cannabis retail market. Depending on who is elected president, there could be a push to legalize marijuana at the federal level.

Trump or Biden: Who Is More Likely to Legalize Cannabis Across the United States?

It is expected that the Democratic Party will nominate former Vice President Joe Biden as its presidential candidate, while the Republican Party is likely to officially nominate incumbent Donald Trump for re-election to a second term as president. As one might expect, there are a number of significant policy differences between the two candidates. Just one example: Biden has expressed clear support for the Affordable Care Act that he and former president Barack Obama signed into law in 2010, while Trump has continually tried to repeal Obamacare during his first term. Other examples of strong policy differences between Biden and Trump include immigration, climate change, tax policy, and social justice issues. Surprisingly, the two candidates do seem to be aligned on at least one policy matter: marijuana legalization.

Roughly two-thirds of the American public is in favor of legalizing cannabis for recreational use, according to an October 2019 Gallup poll. This number is up nearly 50% from just 10 years ago. Despite the widespread support for pot legalization, however, there has been a reluctance from federal lawmakers to back any measure perceived as endorsing increased drug use of any kind. Interestingly, both Donald Trump and Joe Biden appear to be opposed to legalizing cannabis federally.

What Would President Biden Mean for Federal Marijuana Laws?

On Tuesday, November 3, 2020, voters across the country will cast their ballots in the presidential election, as well as state and local races. (Many voters are also expected to vote early through mail-in voting.) Some states have cannabis legalization measures on the ballot: New Jersey and South Dakota voters will weigh whether to legalize recreational marijuana, Mississippi voters will consider whether to make medical marijuana legal, and Oregon is set to vote on whether to decriminalize all drugs. Other states, such as Arizona, Idaho, and Montana, may have pot legalization measures on the ballot as well, depending the outcomes of pending court cases.

In the long term, the choice of president in the upcoming election could have the greatest effect on the cannabis industry. Although neither Trump nor Biden seems likely to push to legalize cannabis in the U.S. any time soon, it is possible that a President Biden might come around on the issue because it is what his supporters want. A recent poll found that 76% of Democrats strongly favor the legalization of cannabis for recreational use, as compared to just 51% of Republicans. At a minimum, the election of Joe Biden would probably signal that federal enforcement of laws against marijuana possession would not be increased. And if the recommendations of a recent Joe Biden-Bernie Sanders task force become law, medical marijuana would be legalized nationwide.

It is also possible that cannabis could be decriminalized at the federal level if Joe Biden wins the November election. This is something that Biden has voiced support for in the past and that the Biden-Sanders task force made a point to include in the 110-page document submitted to the Democratic National Committee’s Platform Committee. So, what would decriminalization actually mean? While marijuana distribution would still not be legal, minor possession offenses would no longer result in prison time for offenders. This could provide a big boost to the retail cannabis industry in states where marijuana has already been legalized for recreational and/or medical use.

Impact of 2020 Election on Cannabis Real Estate and Financing

A win for expected Democratic nominee Joe Biden in the November election could also profoundly affect the cannabis industry by leading to banking reform. Currently, cannabis companies have a difficult time accessing capital because banks are reluctant to provide financing to businesses that technically violate federal law. In order to get the funds needed to operate their retail dispensaries and cultivation sites, many cannabis operators enter into sale-leaseback agreements in which they sell their real estate to an investment fund and then lease back the property from the investment fund. The 2020 presidential election might change the way that cannabis operators do business in the future.

Cannabis Investing After the 2020 Election

The country could look much different in January 2021 than it does right now. If a new president is sworn in at that time, the cannabis industry could also look much different. What kind of effect will this have on cannabis operators? Could cannabis investors see a greater opportunity for strong financial returns after the upcoming presidential election?

Contact Scythian for Information About Cannabis Real Estate Investment Opportunities

Scythian Real Estate is a trusted real estate partner of cannabis operators that are interested in accessing capital through sale-leaseback deals. Scythian currently owns 19 cannabis properties spread across several states, including Colorado, Pennsylvania, and North Dakota – with an acquisition pipeline that is expected to continue growing the fund’s portfolio. To learn more, email Scythian Real Estate today.