Cannabis reform just got another big win.
Last week, the House of Representatives passed the MORE Act.
The bill legalizes cannabis and adds a tax to its sales.
Now it’s headed to the Senate, where its future is uncertain.
But, as I explained in December, I still believe this is the year Congress will legalize cannabis.
And that sets up a huge rally for cannabis stocks as we dive into election season…
Election Season Is Heating Up
Passing cannabis reform in the Senate won’t be easy.
That’s because Republicans can filibuster a bill if it has fewer than 60 votes.
But with midterm elections coming up, lawmakers are focused on one group…
Independents, aka swing voters.
The latest Gallup poll shows that 42% of American voters are independent.
Meanwhile, only 29% are Democrats, and 26% are Republicans.
And most independents are in favor of cannabis reform.
Another Gallup poll from October shows that 71% of independents support legalization.
Also, there are 15 Republican senators up for re-election this year. And eight of them are in states that voted for medical or recreational cannabis.
In the image below, the 37 states with cannabis reform laws are in dark green or very dark green.
Red dots show the states that have a Republican senator up for re-election.
(Sources: Ballotpedia, the National Conference of State Legislatures.)
So cannabis will be a huge campaign issue as these senators kick off their re-election bids.
That will put pressure on them to support cannabis reform bills in Congress.
Some of these Senate seats may seem safe now. But those races will likely become closer as election season heats up.
Cannabis Reform Has Bipartisan Support
We’re already seeing the first signs of bipartisan support for cannabis reform.
In March, the Senate passed a bill that makes it easier for researchers to study medical cannabis.
It also encourages the Food and Drug Administration to create cannabis-based medicine.
In addition, Congress is working to finalize the bipartisan SAFE Banking Act.
The bill would let banks provide services to cannabis businesses.
A majority of Republicans in the House voted for it last year, so it will likely become law.
And even if the MORE Act fails, the Senate can create its own cannabis bill as a compromise.
Catalysts Can Boost Stocks 100% or More
So far, cannabis stocks haven’t benefited from the new legislation.
The AdvisorShares Pure US Cannabis ETF (NYSE: MSOS) is down over 50% in the past year.
U.S. Cannabis Stocks Dropped More Than 50%
But that shouldn’t be a surprise.
Wall Street flocked to cannabis stocks in early 2021, and that ended up being a big mistake.
So, this time, investors want to wait until legalization is a sure thing.
When that happens, cannabis stocks could rally 100% or more, like they did last year.
And this is just one of the upcoming events that could be huge for the stock market in 2022.
Catalysts like these are the focus of Ian King’s latest stock-picking strategy.
There are dozens of stocks with catalysts that can boost their prices in areas such as:
- Electric vehicles.
- Renewable energy.
- And more…
You can learn more about Ian’s groundbreaking strategy by clicking here.
Assistant Managing Editor, Banyan Hill Publishing
From open till noon Eastern time.
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