Ex-House Speaker joins ex-governor as pot advocate, sparking hopes for changes
Canadian-listed companies welcome top Republican’s cannabis conversion
Canadian-listed marijuana companies with operations south of the border are applauding Wednesday’s announcement that the former Republican speaker of the U.S. House of Representatives is getting into the weed game.
In the most dramatic Road to Damascus cannabis moment yet, John Boehner, a staunchly conservative ex-politician and erstwhile opponent of legalization, said he’s joining the advisory board of private U.S. cannabis company Acreage Holdings.
“It put a smile on my face this morning,” said Beth Stavola, chief operating officer and president of U.S. operations for MPX Bioceuticals Corp., a Toronto-headquartered company with operations in Nevada, Arizona and Massachusetts. “With someone as conservative as John Boehner jumping in, it’s just such a positive thing for the industry.”
Former Republican Massachusetts governor and 2016 Libertarian Party vice-presidential candidate Bill Weld is also joining the board of Acreage, a large vertically integrated marijuana company operating in 11 states.
Although medical cannabis is legal, to varying degrees, in nearly 30 states and legal for recreational use in nine states, it remains illegal at the federal level in the U.S.
“We both believe the time has come for serious consideration of a shift in federal marijuana policy,” Boehner and Weld wrote in a joint statement. “There are still many negative implications of the Federal policy … most notably the lack of research, the ambiguity around financial services and the refusal of the (Department of Veterans Affairs) to offer it as an alternative to the harmful opioids that are ravishing our communities.”
The willingness of conservative politicians to advocate for cannabis shows just how far the conversation around marijuana has shifted in the U.S. over the past few years. A Gallup poll from October 2017 found that 64 per cent of Americans supported marijuana legalization, including, for the first time, more than 50 per cent of Republicans.
Involvement from figures like Boehner, who remains influential in American politics, not least in his current role with leading law and lobbying firm Squire Patton Boggs US LLP, could help move the political and cultural needle further.
“It’s a huge signal that the amount of risk around the industry is becoming much less, and we’d anticipate a lot of professional companies and regulators north and south of the border would be much more comfortable providing their services, whether that’s banking, legal, accounting and the like,” said Hadley Ford, chief executive of iAnthus Capital Holdings Inc., which is listed on the Canadian Securities Exchange but headquartered in New York.
Of course, endorsements by former politicians don’t equate to legislative and regulatory change, said Ford. And it’s unlikely the U.S. is preparing to barrel after Canada toward full federal legalization. But active involvement in the cannabis industry from top-tier Republicans suggest a number of small incremental changes could be on their way, said Hadley.
He expects the Treasury Department to start rethinking rules that prevent banks from participating in cannabis financing and banking, and the Internal Revenue Service to begin developing measures to properly tax the industry.
George Scorsis, chief executive of Liberty Health Sciences Inc., echoed this view, adding that he expects federal rules around cannabinoid research and clinical testing will be liberalized in the coming year or two.
“What you will see over the next year is a movement towards the de-scheduling of cannabis from a schedule 1 to a schedule 2 drug. At that point, you’ll see Canadian institutions take a more open approach to allowing Canadian investment in the (U.S.) medical space,” said Scorsis, whose company had to reduce its financial ties with Canadian LP Aphria Inc. due to concerns from TMX Group Ltd. about TSX-listed companies operating in U.S. marijuana markets.
Any major shift in U.S. cannabis policy poses both a risk and an opportunity for Canadian cannabis companies, said Vahan Ajamian, an analyst at Beacon Securities Ltd. Canadian companies with a U.S. presence will likely benefit, but competition will also increase.
“We’re still big believers in the Canadian industry,” said Ajamian. “But if you look at what’s the next wave of outsized returns for investors, we think it’s more likely going to be the U.S. over the next year and a half.”