The upcoming US election on November 3rd could have a far-reaching impact on the speed and direction at which federal cannabis legalization occurs. The two key outcomes driving which path the industry moves are (i) whether Donald Trump or Joe Biden wins the presidential election and (ii) whether the Democrats win or the Republicans retain control of the Senate. We’ve laid out expectations for how each of four scenarios are expected to impact the pace of cannabis legalization, in ascending order of favorability. For simplicity and based on current polling data, we assume the Democrats retain control of the House of Representatives in all four scenarios.

Given the continued uncertainty of the political, legal and regulatory landscape at the federal level regarding marijuana, companies and investors in the space can expect deal activity, dynamics and parameters to be mostly in line with recent history, as access to capital, risk assessments, valuations, market dynamics, etc., will continue to be driven by the current climate with a ‘worst case’ scenario mentality driving many of these factors in the near term.

Brent Johnson, Partner at the Hoban Law Group, a leading global “cannabusiness” law firm

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