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Q: With all the political changes after the election, what are the chances Congress will decriminalize marijuana next year?
A: That’s an easy one. Marijuana proponents say the chances are very good. Opponents say don’t bet on it. There you go.
What? Not good enough? OK, this is what we know…
The Democrats have taken over the house. As a group, they have increasingly supported and campaigned for marijuana legalization.
And they’re increasingly backed by public opinion, even among people from my age group – the powerful, forward-looking, all-knowing boomer generation.
A Rising Tide
A majority of voters over the age of 55 support legalization (says the latest Gallup poll). That’s not terribly surprising, is it? We grew up in the psychedelic ‘60s, after all.
What is surprising? A majority of Republicans also support legalization. And two out of three Americans do too. I’m not sure what’s animating the rising tide of marijuana acceptance, but I put a lot of stock in what Tommy Chong (of Cheech and Chong) once said…
“You can’t exercise and be high. It’s impossible.”
Then you have the Jeff Sessions factor.
Sessions was powerless to undo states’ newly passed laws legalizing marijuana. But he did the next best thing, invoking the Justice Department’s mission to uphold the “rule of law” on behalf of the federal government. As you know, it considers most things connected to marijuana illegal.
Sessions is out. And (for the time being, at least) Matthew G. Whitaker is in.
We don’t know much about Whitaker’s stance on marijuana. He’s mentioned it only once, as far as I know. In his resignation letter as attorney general for the Southern District of Iowa to President Obama, he wrote that he was “firmly committed to… reducing the availability of meth, cocaine and marijuana in our communities…” (Emphasis mine.)
I wouldn’t be surprised if he continues Sessions’ policies, upholding the federal government’s “rule of law.”
All Eyes on Congress
Of course, Congress could change the federal law on marijuana.
There’s legislation primed and ready for almost immediate approval. A bill exempting states that have legalized marijuana from federal restrictions and another one allowing marijuana-related businesses to use banks both have Republican co-sponsors. They could pass both chambers of Congress without a problem, if given a chance.
But will they be given a chance?
I’m leaning toward an affirmative.
Not only because politicians tend to pander to their base, and that base increasingly wants to buy marijuana in well-lit stores as opposed to dark alleys…
But because of another powerful force at work here, something politicians of all stripes can get behind…
More money pouring into the government in the form of tax revenue.
Billions of dollars more… and it would come from newly legitimate businesses happy to “pay in order to play.”
That doesn’t happen every day. Public budgets are tighter than ever. Public debt is at obscene levels. Congress will begin cracking the door open to legalization because it has little choice.
Marijuana companies shouldn’t begin rejoicing quite yet. But they have real reasons to believe that better times are coming soon.
+ Early Investing Co-Founder Andy Gordon
Q: What is a bitcoin halving? And when will the next one be?
A: Every four years, the reward for mining bitcoin goes down by half. This is the “halving.” The next one will happen in May 2020.
Currently the “block reward” miners receive every 10 minutes is 12.5 bitcoins. In May of 2020, it will be reduced to 6.25 new bitcoins every 10 minutes.
As a reminder, there are more than 17 million bitcoins in existence today, and there will only ever be 21 million.
So when the reward gets cut in half, there’s a lot less new supply coming onto the market.
The first two times bitcoin halved, it preceded a major bull run. In 2012, the first halving, bitcoin was priced around $14.50. A year later, it was almost $1,000.
In 2016, the bitcoin reward halved at around $2,200. It dropped as low as $570 before the incredible 2017 bull run. Moral of the story: Don’t get freaked out over price drops. Hodl.
The bitcoin halving is one of the top long-term catalysts I’m watching. Combined with the institutional entry into crypto, I think we’re setting up for a very nice 2019 and 2020.
There will always be brutal periods like the current one in crypto, at least for the foreseeable future. It’s the price we pay as early adopters. But as you know, the rewards can be well worth the risk.
+ Early Investing Co-Founder Adam Sharp
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