What would a Kamala Harris presidency do for pot stocks?

Cannabis stocks are predictable in their unpredictability these days. They all move together, or they don’t.

And more than anything, they are fed by externalities, more than individual results. The biggest externality, of course, is legislation in the United States and, in some way or some form, that should come to a head with the U.S. election on Tuesday. And while Donald Trump has been viewed as the more pot friendly candidate, that may have changed.

In a research report issued to clients November 4, Beacon Securities analysts Doug Cooper and Russell Stanley addressed the U.S. election with a lens toward the sector.

Cooper and Stanley say the potential for the U.S. Drug Enforcement Agency to reschedule prior to the inauguration day looks very unlikely right now.

“Trump has endorsed Rescheduling, his pick for DEA head may be marginally less likely to be supportive than a Harris pick would be, so the importance of a Harris win has increased…”

“Per Marijuana Moment, Chief Administrative Law Judge (ALJ) Mulrooney has issued a preliminary order indicating it needs additional information on those set to testify in the forthcoming hearing,” the pair wrote. “The DEA’s list of hearing participants did not indicate whether those participants are for/against Rescheduling or specify how the participants satisfy the ‘interested person’ definition set by regulations. An initial hearing will still take place on December 2, but no evidence or testimony will be taken at the time. Participants are to come prepared with availability dates for January-February. Earlier last week during a webinar hosted by the US Cannabis Council, Kelly Fair (Partner at Dentons) pointed out that regardless of who wins the election, we will likely see a new DEA head appointed, and it is therefore ideal for the process to be completed before January 20th (Inauguration Day) to pre-empt that changeover. She opined that January 20th was tough-but-achievable assuming the early December hearing was limited to one week. With this latest development, completion of the Rescheduling process prior to January 20th does not look possible, so the risk of a new (unsupportive) DEA head interfering has inched higher. Though Trump has endorsed Rescheduling, his pick for DEA head may be marginally less likely to be supportive than a Harris pick would be, so the importance of a Harris win has increased.”

The analyst also noted that cannabis legalization enjoys bipartisan support. A new Gallup poll confirmed this, but also showed that many now feel Harris is the clear choice for the cannabis industry.

“A new Gallup poll shows that 68% of Americans favour cannabis legalization v. 31% opposed,” the analysts noted. “Total support is down slightly from 70% in the last poll, though that is within the +/-4% margin of error. The results featured 53% support from Republicans, along with 69% of Independents and 85% of Democrats. In a YouGov poll, 45% of respondents predicted the cannabis industry would do better under a Harris administration v. the 16% who believe Trump would be preferable. Another 26% indicated uncertainty between the two, and 13% felt the two candidates were about the same.”