Marijuana (cannabis) users and investors alike have been waiting for federal legalization. Despite growing acceptance among political candidates and voters, it’s still highly uncertainty when/if legalization will become reality. As usual, there’s a bill circulating in Congress, but it’s not the first and it may not be the last.

Still, there’s no denying that things are moving in the right direction, even if slowly. Based on President Biden’s directive, the U.S. Drug Enforcement Administration (DEA) is mulling the reclassification of marijuana as a Schedule III drug.

Reclassification on the Way

Currently, under the Controlled Substances Act (CSA), marijuana is classified as a Schedule I drug, which means it’s considered to have a high potential for abuse and no currently accepted medical use.

Meanwhile, a Schedule III designation would mean the drug is considered to have “moderate to low potential for physical and psychological dependence. It would be the federal government’s official acknowledgement that marijuana has medical uses and has low abuse potential. Other Schedule III drugs include Tylenol with codeine and ketamine.

Assuming the reclassification to Schedule III does occur, state-regulated cannabis businesses will be able to write off standard business expenses—currently, an IRS rule, Section 280E, prevents such a write off for businesses associated with Schedule I and II drugs—and result in significant tax savings.

Additionally, the official recognition of cannabis as being less dangerous than other Schedule I drugs like heroin and LSD should help the initiative to nationally legalize marijuana once and for all.

Where Do Candidates Stand?

For marijuana to become legal on the federal level, Congress has to pass a bill, and the president needs to sign it into law. Thus, it’s important to have a sitting president who supports legalization.

With 2024 being a presidential election year, let’s take look at Kamala Harris and Donald Trump’s positions on marijuana legalization.

Currently leading by a few percentage points in the latest polls after their first (and perhaps only) debate, Harris is a former attorney general who oversaw the prosecution of more than 1,500 marijuana users, some of whom went to prison.

However, after she became a senator, her positioned has greatly softened. She has said that it’s ridiculous marijuana is considered more dangerous than fentanyl (a Schedule II drug that is a leading cause of death for young adults). She has worked for marijuana regulation reform and introduced legislation to legalize marijuana, which would allow banks to offer services to cannabis businesses.

In short, if she is elected president, Harris should be a friend to the legalization effort. She has said she’s ready to sign a reform bill into law.

Trump Also Softens Stance

Her opponent, former president Donald Trump also supports reclassifying marijuana as a less dangerous substance. He has also publicly stated that he would vote ‘yes’ on a Florida bill to legalize recreational marijuana use for adults 21 and over.

Trump has stopped short of supporting nationwide legalization, but he supports banking reform that will allow state-sanctioned cannabis businesses to access banking services. Since having no legal access to banking is a big problem for the marijuana industry, potentially removing the ban would be a big deal for businesses operating in states where pot is legal.

So while Harris has pledged to sign a legalization bill that reaches her desk, even though Trump hasn’t made the same promise, he is at least for loosening restriction of the cannabis industry.

Legalization would be a big step for the marijuana industry, but companies would still need to find ways to improve profitability and cash flow. Competition is tough and differentiation is not always easy. Investors considering investing in the industry will want to be selective and pick the companies with the best chance of standing out from the crowd.

Editor’s Note: Are you looking for an alternative growth opportunity? We suggest you consider marijuana.

That’s right…marijuana. Weed is no longer a pariah and counter-cultural act of rebellion. It’s a multibillion-dollar bonanza. Investors who ignore pot stocks will miss out on huge, market-thumping gains.

Through painstaking research, our colleague Jim Pearce has discovered that a small group of everyday Americans are earning up to $51,338 a year from one company’s lucrative marijuana profit-sharing “plan.”

Jim is the chief investment strategist of our flagship publication, Personal Finance. He tells our team that this particular company is the biggest win-win opportunity he’s ever seen in the marijuana market.

There’s one step you must take to qualify for the next round of payouts. To learn more, click here now.