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The federal government has been slow to move on cannabis, but its hand could be forced this year. That's why we're taking a closer look at our top marijuana stocks each week.
We have a cannabis REIT that's shown signs of life lately – with plenty of room to break out. But first, here's the latest cannabis news to start your day.
While new legalization bills have been introduced in several states, Congress hasn't taken any action yet. Senate Majority Leader Mitch McConnell (R-KY) is firmly against legalized marijuana and has prevented the Senate from bringing a number of federal bills to the floor. But that may inevitably change.
Politico reports that as many as 40 states may have some form of legal cannabis by the end of 2020, creating a byzantine system of state and local laws that don't comply with one another. It will still be illegal to drive across state lines with cannabis due to federal laws. And it will still negatively impact the banking sector that stands to alleviate the ongoing cash pressures of the industry.
Once the impeachment proceedings are drawn to a close and Democratic primary season kicks into full swing, we may see some federal movement on cannabis.
And there's no better state to set the wave in motion than New York…
New York Is Going Green
New York Governor Andrew Cuomo is dead set on legalizing cannabis in 2020. For proof of this, the governor's office released its fiscal year 2021 budget proposal. That budget included a line item for expected tax revenue from adult marijuana sales.
Cuomo has projected that the state will generate $300 million in new revenue from cannabis taxation. However, that rosy figure has prompted immediate criticism that could stifle the debate. In addition, civil rights supporters are concerned that the tax budget doesn't do enough to help the communities most negatively impacted by the war on drugs. A long political battle over how to spend cannabis revenue was precisely what derailed the legalization effort in 2019.
The new proposal does ban alcohol in dispensaries and cannabis-smoking lounges. It also introduces taxation in three ways.
The state would tax cannabis cultivation at $1 per dry weight gram of cannabis flower. It would tax cannabis trim at $0.25 per dry weight gram. It would also tax wet cannabis at $0.14 per gram.
And if perceptions of marijuana continue to shift in this way, we know which cannabis REIT is poised to benefit. This one has a corner on the cannabis market right now…