Earlier this year, a trio of United States senators introduced the Compassionate Access, Research Expansion, and Respect States (CARERS) Act. The legislation would effectively end the federal ban on medical marijuana and implement a series of reforms.
During the last few months, three amendments which mirror provisions included the CARERS Act were passed by the Senate Appropriations Committee. These include:
- May 21st: Allowing veterans access to medical marijuana (passed 18-12)
- June 11th: Allowing states to set their own medical marijuana policies (passed 21-9)
- July 23rd: Allowing marijuana businesses to access banking services (passed 16-14)
In late June, the White House took a major step forward to support cannabis research by eliminating the Public Health Service review requirement. Now, the Office of National Drug Control Policy (ONDCP) will help facilitate medical marijuana research.
Increasing support for the bill
The CARERS Act has a lot of momentum behind it. The bill has 15 cosponsors, including 12 Democrats, two Republicans and one independent. The key takeaway from these developments is that the Senate is ready to debate medical marijuana, but the legislation is currently stuck in the Judiciary Committee.
Less than a month ago, Democratic Senator Chuck Schumer signed on as a co-sponsor of the CARERS Act. Senator Schumer’s support came as a surprise because he has been one of Congress’ strongest supporters of the “war on drugs.”
Iowa Republican Senator Chuck Grassley is the chairman of the Judiciary Committee and although he has pushed for reduced barriers to medical research on marijuana, he opposes rescheduling it.
Three stocks poised to benefit from the legislation
The proposed legislation would act as a catalyst for a large segment of the cannabis industry. The companies who we think would benefit the most from the passage of the CARERS Act are:
- GW Pharmaceutical (GWPH): The rescheduling of marijuana would be a major catalyst for GWPH. The company is focused on developing treatments for cancer pain, multiple sclerosis, Dravet syndrome, Lennox-Gastaut syndrome, neonatal hypoxic-ischemic encephalopathy, glioma, ulcerative colitis, type-2 diabetes and schizophrenia. GW commercialized the world’s first plant-derived cannabinoid prescription drug, Sativex, which is approved for the treatment of multiple sclerosis in 27 countries.
- MassRoots Inc. (MSRT): MassRoots is considered to be the “Facebook” of the marijuana industry. The company has the largest and most active communities of cannabis consumers with 420,000 users who have interacted more than 140 million times over its network. Apple only allows the app to be downloaded by users who live in a state where medical marijuana is legal. The passage of the CARERS Act would help the company grow its user base and monetize its network.
- Kaya Holdings, Inc. (KAYS): Kaya Holdings is the first publicly traded company to own a legal marijuana dispensary and cultivation facility in the United States. Due to the nature of its business, the company cannot utilize banking services. The passage of the CARERS Act would provide the company access to banking services and reduce the risk associated with its business.