The year of 2018 registered some major wins for marijuana (Canada legalized recreational cannabis, the FDA made history by approving a cannabis-derived drug, more states legalized marijuana, public opinion is at an all-time high in favor of legalization, etc.), and that has led many cannabis advocates to expect 2019 to bring even better news along the lines of the U.S. federal government legalizing marijuana. However, this is unlikely to happen this year for a number of reasons.
The Senate isn’t Warm to Marijuana
While Congress is now dominated by Democrats (and Democrats have a history of being friendly to cannabis law reform), the Senate is still firmly in the hands of Republicans. Even the recent polls that show massive support for cannabis legalization reveal a small majority of Republicans supporting legalization (53 percent, according to the latest Gallup poll) while Democrats (75 percent) support the end of cannabis prohibition. This means that even if Congress passed a bill to legalize marijuana, such a bill is unlikely to make it past the Senate this year.
Marijuana isn’t Yet Divisive Enough to Cost Politicians their Jobs
The elected representatives on Capitol Hill don’t yet feel that their position on marijuana can cost them their jobs. Some opinion polls conducted last year discovered that a large majority of people (82 percent) would still vote for a politician even if that candidate had a different view on marijuana from that of the voter.
What such polls show is that politicians are unlikely to take the public’s views on marijuana seriously if the voters don’t put their representatives on the spot over the issue. Consequently, it is unlikely that marijuana will be legalized federally, unless the subject becomes so polarizing that political offices can be lost or earned based on this one issue alone.
There’s Money Involved
The role of money also rears its head on matters of cannabis legalization. Under the present legal framework, marijuana companies are subjected to very high corporate tax rates (as high as 90 percent). This is because such companies cannot claim corporate tax deductions since they deal in a substance that is federally illegal.
Legalizing cannabis would change the section of the tax code applicable to pot companies, and the federal government may lose approximately $5 billion over five years in corporate taxes from these companies. The federal government may be unable to recoup this money from the federal excise tax on legal marijuana sales since some states already have very high state-level excise taxes on cannabis, hence any increase can effectively be an advert for the cannabis black market. So, 2019 may not be the year for cannabis legalization at the federal level until a solution to this money conundrum is found.
While the issues above appear to be serious individually, the views of the voters can trigger a dramatic shift in the way cannabis is regarded at the federal level. The cannabis industry, including ChineseInvestors.com (OTCQB: CIIX) and Choom Holdings Inc. (CSE: CHOO) (OTCQB: CHOOF) can only wait for that time when pressure from below forces the federal government to end cannabis prohibition.
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