The potential for a Kamala Harris-Tim Walz presidency, the first explicitly pro-cannabis legalization ticket, has the cannabis industry on edge, wondering what the future holds. While the excitement is palpable, Laurie Parfitt, CEO of LKP Impact Consulting, urges caution.
Parfitt, a seasoned industry veteran with over two decades of experience, acknowledges the significance of this moment. “For the first time, higher levels of government are positively engaging with the cannabis industry,” she says. This marks a stark departure from past administrations, including that of President Joe Biden, who initially supported the “War on Drugs” before shifting his position.
However, Parfitt emphasizes that the priority of cannabis reform remains uncertain amidst a host of pressing issues, including inflation, immigration, and global conflicts. She believes that rescheduling cannabis, a potential outcome under a Harris-Walz administration, could be perceived as a major victory, potentially delaying further efforts toward full federal legalization.
The industry initially anticipated federal legalization within four to six years, but rescheduling might lessen the urgency. “That being said, there might be other ways that the administration could support the industry, like safe banking,” Parfitt adds.
The prospect of rescheduling has already begun to affect investor confidence, albeit with mixed results. “The announcement that Health & Human Services recommended rescheduling cannabis and initiated the process has indeed enhanced investor interest and influenced the strategic direction of cannabis companies, albeit in strategic pockets of the industry,” Parfitt explains.
She points to the broader capital markets crisis of late 2022 and early 2023, which hit the cannabis industry particularly hard due to its limited pool of investors and lack of banking options. This led to a period of stagnation, with investment activities mostly on hold, similar to the period from 2019 to 2020.
However, the announcement of rescheduling earlier this year marked a turning point. “While this development has not yet resulted in a significant influx of additional capital, it has reignited interest among investors,” Parfitt says. “The hope is that we will start to see capital flow back into the industry so that operators can start making longer-term decisions that will set their businesses up for scale and success.”
As the cannabis industry braces for potential changes in federal policy, businesses and investors are closely watching for developments that could stabilize the market. Parfitt’s insights into the political landscape’s impact on the industry will be a crucial topic of discussion at the Benzinga Cannabis Capital Conference, where industry leaders will gather to explore these issues and more.
While the industry prepares for a potential shift with rescheduling, Parfitt notes, “It remains to be seen how much of a priority this issue will be.” For now, stakeholders await the next steps and hope for a regulatory environment that allows businesses to thrive.
