Trump might block - or allow - marijuana's reclassification, but it's a 'close call'

By Victor Reklaitis

Biden's re-election campaign expected to get a lift from his administration's plan to reschedule cannabis

While President Joe Biden's re-election campaign is widely expected to get a lift from his administration's push to reclassify marijuana as a less dangerous drug, it's not as obvious where presumptive Republican nominee Donald Trump could end up on the issue.

The federal reclassification effort, which was detailed in reports Tuesday, may be dependent on the outcome of the Biden-Trump race for the White House, according to Jaret Seiberg, an analyst and managing director at TD Cowen's Washington Research Group. That's because it would be "unusually fast" for the U.S. Drug Enforcement Administration to finalize the rescheduling before November's election, Seiberg said in a note.

Trump "may be able to block this if he prevails," Seiberg added. But the analyst also said his team believes Trump in a second term "may simply let this change happen to eliminate the political headache, though we concede it is a close call."

Trump's campaign didn't immediately respond to a request for comment.

The former president said in a Newsmax interview a year ago that marijuana use "does significant damage - and yet, from a voting standpoint, it's a pretty popular thing." He also suggested last year that genetically engineered cannabis could be "causing psychotic breaks," while speaking at a National Rifle Association event, but at other times he has voiced support for medical marijuana.

While Trump was president, one of his attorneys general, Jeff Sessions, rescinded a Justice Department document known as the Cole Memo, which had offered protections to states that had legalized marijuana in some form.

Trump could come out in favor of a recreational-marijuana referendum in Florida as a way to "take issues away from Democrats," said Jim Hagedorn, CEO of Scotts Miracle-Gro (SMG), which sells fertilizer and growing equipment to the cannabis industry. Hagedorn said the GOP had success in Nevada making similar moves on cannabis. "I've been told [Trump] is open to cannabis in Florida," the CEO said.

The policy committee for House Republicans in a February memo described marijuana as a "dangerous, addictive drug" and voiced objections to key cannabis-related bills. And there were strong GOP objections to Tuesday's development on rescheduling, with Sen. James Lankford of Oklahoma saying it's "irresponsible and will directly lead to more drug use."

TD Cowen's Seiberg said Biden should score a "political bounce from proposing to reschedule cannabis," and his administration does not need to complete the process before Election Day, as its proposal "should be a strong enough signal to voters." At the same time, Biden "gains some political protection from attacks on the rescheduling if the change is not finalized before the election," as he can say it's still under review, the analyst added.

The plan for rescheduling marijuana is seen as boosting Biden's standing with younger voters, similar to how they're expected to appreciate his efforts to cancel student loans or address climate change. On the other hand, younger voters have blasted his support for a potential ban of social-media app TikTok, as well as his approach to the Israel-Hamas war.

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Betting markets tracked by RealClearPolitics on Wednesday put Biden's odds of re-election just barely ahead of Trump's - at 42.3% for the Democratic incumbent, compared with 42.2% for the former president. Bettors have favored Biden since April 12 after giving Trump the edge for about six months.

Cannabis stocks MJ MSOS were pulling back Tuesday after a huge rally in the prior session that was sparked by news about the Biden administration's plan to reclassify pot.

Steve Gelsi contributed.

-Victor Reklaitis

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05-01-24 1354ET

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