For quite some time, cannabis stocks have taken center stage as the hottest trade of the year.

After all, Canada just legalized it.  More U.S. states are jumping on the bandwagon.  Demand is outpacing supply.  Even retailers are jumping on board.  In fact, Neiman Marcus, Sephora, Vitamin Shoppe, Kroger, Barney’s DSW, CVS, and Walgreen’s have all jumped at the opportunity.  American Eagle just became the latest retailer to sell CBD, too.

Better, according to Arcview Market Research and BDS Analytics, global spending on cannabis could reach $57 billion by 2027.  Even surveys back that sales potential.

According to The General Social Survey conducted by NORC at the University of Chicago, 61% of those surveyed support legalization. That’s up from 57% in 2016.  A Gallup survey found that 66% of Americans are in favor of legalization. That’s up from just 60% in 2016. A Pew survey found that 62%  of Americans want to see cannabis legalization in the country, as compared to just 57% in 2015.

The catalysts are there.

Unfortunately, there have been hiccups along the way.  For example, after pushing aggressively higher in 2019, cannabis stocks came under some pressure on concerns over trust.  For example, the U.S. FDA sent a warning letter to Curaleaf Holdings after it made claims CBD-based products could treat a range of serious ailments, including Alzheimer’s disease.

Curaleaf is “illegally selling unapproved products containing cannabidiol (CBD) online with unsubstantiated claims that the products treat cancer, Alzheimer’s disease, opioid withdrawal, pain and pet anxiety, among other conditions or diseases,” according to the U.S. FDA.

All of that shook the sector to its core.  Earnings haven’t been hot either.

However, there’s one key catalyst that could ignite the sector – U.S. Congress

As the race to the White House heats up, cannabis has become a major platform.

Just recently, Democratic candidate Sen. Kamala Harris just introduced a marijuana bill this week that would decriminalize the substance at the federal level.  The bill would also expunge marijuana convictions, and tax marijuana to generate revenue.

Reportedly, Harris wrote the bill – Marijuana Opportunity Reinvestment and Expungement Act – with House Judiciary Chairman Rep. Jerry Nadler.

"We need to start regulating marijuana, and expunge marijuana convictions from the records of millions of Americans so they can get on with their lives," she said. "As marijuana becomes legal across the country, we must make sure everyone—especially communities of color that have been disproportionately impacted by the War on Drugs—has a real opportunity to participate in this growing industry."

However, Kamala Harris isn’t the Only One in Support

President Donald Trump said he would support bipartisan efforts in Congress to ease the federal ban on marijuana.  Part of the reason for that is the current ban has created sizable conflict with states that have legalized its use in some form.  New legislation now seeks to ensure that states  have the right to determine on their own the best approach to marijuana legalization inside their own borders.

Sen. Elizabeth Warren has co-sponsored a bill with Republican Sen. Cory Gardner to protect state legalization efforts and has said on the campaign trail that she favors legalization at the federal level.

Sen. Kirsten Gellibrand unveiled her plan to legalize marijuana, which includes taxing legal cannabis and helping small businesses.

Sen. Cory Booker introduced the Marijuana Justice Bill in the U.S. Senate, which would legalize marijuana, expunge criminal records of nonviolent marijuana convictions and creates a “community reinvestment fund.”

On the road to the White House in 2020, we expect cannabis to gain great traction.