Who Would Benefit From The Bipartisan Bill?

Yesterday was a historic day for the cannabis industry. There have been a lot of questions regarding the bipartisan bill that was introduced by three senators and the affect it would have on the industry. The five key provisions of the bill are as follows:

1. Under the bill, marijuana would be reclassified as a Schedule II substance under the Drug Enforcement Agency’s five-category drug classification system. Marijuana is currently labeled as a schedule I substance along with heroin, LSD, and ecstasy. These substances are deemed by the DEA to have “no currently accepted medical use and a high potential for abuse.” Other substances classified under the Schedule II label include cocaine, OxyContin, Adderall and Ritalin.
2. The proposed legislation would ease restrictions on the interstate transport of CBD medicines so patients will be able to access such medication.
3. The bill would make it easier for banks to provide services to the marijuana industry.
4. It would broaden access to cannabis for research purposes by revising the policies of the National Institute on Drug Abuse to permit research into the medical benefits of marijuana.
5. Doctors who work for the Department of Veterans Affairs would be allowed to recommend medical marijuana to patients suffering from certain conditions in states where medical marijuana is legal.

Which companies will benefit from this proposed legislation?

The proposed legislation would act as a catalyst for a large segment of the cannabis industry. The effect it would have on cannabis companies would vary on the industry the company operates in and the products they sell.

1. The rescheduling of marijuana would be a major catalyst for pharmaceutical and biotech companies. Companies like GW Pharmaceutical (GWPH) and Nemus Bioscience Inc. (NMUS) would benefit more from this provision than an ancillary company like Two Rivers Water & Farming Company (TURV).
2. One of the provisions in the legislation allows for interstate commerce of CBD based medicines. This legislation would be a catalyst for companies like INSYS Therapeutics, Inc. (INSY) and GW Pharmaceutical (GWPH). Since this provision pertains specifically to CBD products, it would not be as big of a benefit for cannabis cultivators or retailers.
3. Treasury reform would benefit pretty much every single cannabis company, especially the cultivators and retailers of marijuana. These companies include Alternative Fuels America, Inc. (AFAI) and Harborside Health Center (private). This legislation, however, would adversely impact security companies such as Blue Line Protection Group (BLPG) because some of their services would no longer be required by dispensaries.
4. Although revising the policies associated with researching the benefits of marijuana would not be beneficial to any specific company, the results of the research would further deregulate marijuana.
5. If the Department of Veterans Affairs was allowed to recommend medical marijuana to patients who need it, companies that sell marijuana would see an increase in demand for their products. 

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Michael Berger is Managing Partner of StoneBridge Partners, LLC and Founder of Technical420.com. Prior to entering the cannabis industry, Michael was an Equity Research Analyst at Raymond James Financial covering the Energy Sector. Michael has been featured in publications such as The Street, Bloomberg, US Money News, and hosts various cannabis events across North America.

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