What happened
American pot stocks just couldn't catch fire on Tuesday. Investors weren't heartened at all by the incoming Congress, which will feature a new majority-Republican House of Representatives.
Curaleaf Holdings (CURLF -2.56%) led the downward charge by shedding more than 7% of its share price on the day, and Green Thumb Industries (GTBIF -4.33%) fell by nearly 4%. Some Canadian peers also caught this cold, with Aurora Cannabis (ACB -1.15%), for example, slipping by 1%.
So what
Although the ascendant Republicans struggled to elect a Speaker from their party on Tuesday, barring any oddball development they'll eventually sort this out to control the House. Unhappily for the marijuana industry, it's Republican lawmakers who have been the most resistant to drug law reform.
This means the drug's decriminalization (read: legalization) at the federal level is likely dead in the water for the duration of this Congress. We can assume the same for the SAFE Banking Act, basically a legalization-adjacent measure that would allow marijuana companies to access the basic financial services all businesses require to function effectively.
Legalization can only be effected at the federal level by removing weed's status as a schedule 1 drug under the Controlled Substances Act. While individual states can and have sanctioned recreational consumption and sale, these one-by-one changes in the law have left only a confusing patchwork of legality across the country.
Now what
Make no mistake, Curaleaf and Green Thumb are plenty busy slinging product to people in those locations. But the big prize is federal decriminalization, and it's clear that won't be happening soon with the incoming crowd in the House of Representatives.
