The cannabis industry has been a wild ride over the past decade, and the Trump years (2017–2021) were no exception. Whether you were watching from the sidelines or diving into the market yourself, the cannabis industry’s ups and downs under Trump were like a blockbuster movie—complete with plot twists, cliffhangers, and plenty of drama. Let’s explore the challenges, opportunities, and memorable moments during this time.
Federal Policy: The Plot Thickens
Under Trump, federal cannabis policy felt like a suspenseful thriller. While Trump occasionally voiced support for leaving marijuana laws up to the states, his administration sent mixed signals. The biggest shock came in 2018 when then-Attorney General Jeff Sessions scrapped the Cole Memorandum—a key policy that had essentially told federal authorities to back off states with legal cannabis.
For investors, this created a “Will they? Won’t they?” dynamic. Would the federal government crack down on cannabis businesses? Fortunately, there was no major crackdown, but the uncertainty alone made some investors hesitant. It was like trying to bet on a horse when you’re not sure if the race will even happen!
States to the Rescue: Green Lights Everywhere
While the federal government dragged its feet, states were rolling out the green carpet for cannabis. By the end of Trump’s term, 15 states had legalized recreational cannabis, and 33 states approved medical marijuana. States like Illinois and Michigan joined the party, creating exciting new markets for cannabis companies to tap into.
Take Illinois, for example. When it launched recreational sales in 2020, the state raked in $1 billion in cannabis revenue in its first year! Companies like Green Thumb Industries (GTBIF) and Cresco Labs (CRLBF), both based in Illinois, became power players in the industry, expanding their operations and attracting investor attention.
Money Matters: The Banking Blockade
Cannabis businesses faced a unique challenge under Trump—access to banks was almost nonexistent. Thanks to federal laws classifying cannabis as a Schedule I drug (the same category as heroin!), banks were reluctant to work with dispensaries and growers. Imagine running a multimillion-dollar business and having to handle all your transactions in cash. Not exactly convenient—or safe.
This financial blockade didn’t just cause headaches; it also limited growth for smaller companies. However, creative solutions emerged. Companies turned to private equity, crowdfunding, and even Canadian stock exchanges to raise capital. For instance, Canadian cannabis giant Canopy Growth (CGC) became a popular investment option for Americans eager to get a piece of the action, even though its operations were mostly north of the border.
Stock Market Rollercoaster
If you bought cannabis stocks during Trump’s presidency, you know it wasn’t for the faint of heart. Take Tilray (TLRY) as an example. In 2018, the stock skyrocketed from $17 to over $300 in just a few months, fueled by hype around cannabis legalization in Canada. But what goes up must come down—Tilray’s stock price tumbled back to earth almost as quickly.
U.S.-based multistate operators (MSOs), like Curaleaf (CURLF) and Trulieve (TCNNF), offered more stability. These companies focused on building real revenue from state markets, proving that slow and steady could win the race—at least in the long run.
Looking Ahead: The Sequel
Despite the challenges, the Trump years set the stage for the cannabis industry’s next chapter. Public support for legalization surged to over 60% by 2020, according to Pew Research. Politicians from both parties began talking seriously about federal reform, laying the groundwork for future changes.
For middle-aged investors, the takeaway is clear: while the cannabis industry may be volatile, it’s also brimming with potential. As states continue to legalize, and federal reform remains a hot topic, the opportunities for growth are immense. The key is to do your research, stay informed, and buckle up for the ride—because in the cannabis world, the excitement is just getting started!