Biden Signs First Reform Cannabis Bill

Stephen Andrews
06 Dec 2022

President Joe Biden becomes the first U.S. president to sign a cannabis-specific reform piece of legislation into law. The bill focuses on marijuana research, making it easier for scientists to study the therapeutic benefits of the Cannabis plant. Operators such as Tilray, Canopy, and Cresco jumped on the stocks for as much as 9% after the law was affixed with a presidential signature.

President Biden signed a landmark marijuana-specific reform legislation into law on Friday, Dec. 2., making him the first person who has ever occupied the Oval Office to do so. 

The legislation is known as the Medical Marijuana and Cannabidiol Research Expansion Act. It is the first bill to be met with bipartisan support through both the Senate and the House. 

While the bill is a shortcut for scientists into cannabis research, it also calls on the federal government to investigate the potential therapeutic benefits of marijuana in line with the ongoing rescheduling review announced by Biden in October. 

Lawmakers behind the bill include Sens. Chuck Grassley, R-Iowa, and Diana Feinstein, D-California. Also, key members of the House who stand up for cannabis reform, like U.S. Rep. Earl Blumenauer, D-Oregon, Nancy Mace, R-South Carolina, and Dave Joyce, R-Ohio. 

In a joint statement, the lawmakers described the bill as a "monumental step in remedying our federal cannabis laws." 

"We celebrate the enactment of this critical and long-overdue legislation, and we know there is much more to do to remedy the ongoing harms of the failed war on drugs," the statement said. 

The Medical Marijuana and Cannabidiol Research Expansion Act will allow research facilities, including universities and private companies, to obtain permission from the Drug Enforcement Agency (DEA) to cultivate and handle cannabis plants for research purposes. This type of permit has been previously reserved for only seven institutions nationwide. 

If the research effort is successfully completed, marijuana-based products could be marketed and sold using medical claims based on science without conflict with the U.S. Food and Drugs Administration (FDA). It's something that will definitely attract more pharmaceutical behemoths in the game. 

The bill could directly and significantly impact the ongoing rescheduling review initiated by President Biden last month. Both the U.S. Department of Justice and DHHS are involved in this process to determine if their stances on Cannabis are consistent with contemporary science and law.

The ultimate goal of the review process is to reschedule marijuana from its Schedule 1 controlled substance status, which currently places it in the same category as dangerous drugs such as heroin. 

A few more cannabis bills are at the moment processed in the two chambers of Congress and might soon reach the president's desk as well. 

After Friday, there was speculation that there could also be progress on The SAFE Banking Act, which seeks to introduce banking reforms and end persecution of financial institutions that open accounts for state-legal cannabis operators. The rumors were enough to cause dramatic fluctuations in the pot stocks. 

The prices of several marijuana stocks, Cresco Lab in particular, surged over the weekend. Since then, their performance has gone back to "normal," although most companies that benefited from the efflux are still in the plus. 

Generally speaking, cannabis stocks have lost anywhere between 35% and 50% this year, an underperformance that financial experts blame on the postponement of federal legalization. 

The latest uptick is just another demonstration that investors are looking for any piece of good news to put money into pot stocks. More than likely, federal legalization is now several years away. Until then, with every good and bad word that travels around about Cannabis, we can expect similar dramatic up-and-down movements in stock prices. 

Stephen Andrews