By Victor Reklaitis
Senate Majority Leader Chuck Schumer and two other top Democratic senators on Wednesday rolled out a “discussion draft” for an extensive bill that would deliver federal decriminalization for cannabis and other changes, but analysts said it isn’t likely to become law anytime soon.
“We believe this legislation is designed to fail. It is close to everything that progressives want while providing little reason for Republican senators to back the measure,” said Cowen Washington Research Group analyst Jaret Seiberg in a note.
“We see it as a political effort designed to boost Schumer and other Democratic senators in the 2022 primary and general election fights.”
Schumer, a New York Democrat, along with Sens. Cory Booker of New Jersey and Ron Wyden of Oregon, had called in February for “ ending the federal marijuana prohibition ” and promised “comprehensive cannabis reform legislation.”
The trio at last took the step on Wednesday of unveiling such legislation. The fact that it’s a “ discussion draft ” doesn’t bode well for the bill’s prospects, according to Edwin Groshans, an analyst at Height Capital Markets.
“Publicly releasing a discussion draft after months of writing the bill indicates that the behind the scenes negotiations have failed to generate the needed support to formally introduce a bill and begin the committee hearings and mark-up sessions required before the bill is voted on by the full Senate,” Groshans wrote.
“In other words, the bill does not have the 60 votes to break a filibuster and unless some aspect changes materially, which is unlikely in our view, then the bill’s demise is preordained.”
The Senate is split 50-50, with Democrats in control only because Vice President Kamala Harris can cast tiebreaking votes.
“We are all joining together to release draft legislation to end the federal prohibition on cannabis,” Schumer said on Wednesday during a news conference on the Cannabis Administration and Opportunity Act. “This is monumental, because at long last we are taking steps in the Senate to right the wrongs of the failed ‘War on Drugs.'”
Cannabis stocks, as tracked by the ETFMG Alternative Harvest ETF /zigman2/quotes/204332491/composite MJ -1.68% , were trading about 3% lower on Wednesday, while the broad S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.32% was slightly higher. The weed fund has gained 32% so far this year, topping the S&P’s advance of 17%.
From the archives (January 2021): Cannabis-industry investors ‘are likely overestimating the odds for federal decriminalization,’ analyst says
This is an updated version of a report first published on July 13, 2021.