Here's how shocking the odds of legalizing marijuana in the United States are

Americans support the legalization of marijuana in record numbers. A Hill-HarrisX survey released in April found that as many as 84% ​​of respondents were in favor of pot legalization. Half was in favor of legalizing medical cannabis, the other half was in favor of legalizing the recreational use of marijuana.

With this widespread support, you could assume that the legalization of marijuana in the United States is a shoo-in. Think again.

According to my rough calculations, the probability that marijuana will be legalized in the United States in the next few years is less than 1 in 300. That's right: the chances that you would throw a coin and drop it on the head eight times in a row are much bigger. better than the country legalizing pot at any time.

Kentucky Reign

There is a major obstacle to amending federal laws that allow for legal marijuana. And the name of this obstacle is Senator Mitch McConnell (R-Ky.).

Democrats in the US House of Representatives should have all the necessary votes to pass legislation to recognize, at a minimum, at the federal level the rights of individual states to enforce their own cannabis laws. Senator Cory Gardner (R. Colo.) Even thinks that votes exist in the US Senate to pass similar legislation.

But any bill submitted to the Senate must first be authorized by the majority leader in the Senate. Senator McConnell is currently in this position. There is very little incentive to change federal marijuana laws. In fact, it could be a silly political move for him to allow legislation on the legalization of marijuana to be passed by the entire Senate.

The problem is that hemp cultivation is now a rapidly growing industry in the state of Kentucky, the home country of Senator McConnell. He played a key role in the adoption of the Farm Bill of 2018 last year. The bill legalized hemp in the United States and created greater opportunities for hemp producers in Kentucky. The American legalization of marijuana could jeopardize these possibilities. For this reason, Senator McConnell has shown no interest in changing federal marijuana laws.

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Vision 2020

This leads to the obvious question: Will the Democrats win the US Senate back in 2020, depriving Senator McConnell of his position as Majority Leader? They couldbut the chances of doing so seem daunting at this stage.

Democrats must overturn seven seats to take control of the Senate. With the GOP defending 22 seats against 12 for Democrats, this may seem relatively easy. But that's not it.

The Cook Political Report, an independent and respected independent news bulletin, estimates that 18 of these Republican seats are strong or likely to be filled by the GOP. Only two Republican seats in the Senate running in 2020 are called reversals. In addition, Cook's political report also estimates that the current seat held by Democrats in Alabama is cumulative. Another GOP seat in the Maine Senate is listed as a Republican leaned.

Political observer Larry Sabato agrees with these three seats. However, he thinks there are three other seats that are thin republicans instead of being likely occupied by the GOP.

Suppose Sabato's point of view is correct. This still leaves the Democrats having to win the three vacant seats (including the current Democrat seat), overthrow the four states that are only reducing the GOP now, and win another seat that is more firmly held by the Republicans .

What are the chances of this happening? A 50% probability for the three seats makes sense. We will be generous and give the Democrats a 49% chance to overthrow the four Senate seats that are thin Republicans. And suppose there is a 45% probability that Democrats will dislodge a current GOP senator who is in a seemingly safer run (which, again, is generous).

If we calculate the probability that Democrats win in all these races, we get to 0.32% chance that the GOP will lose control of the Senate. In other words, the probability is 308 against 1.

But wait a second. If the Democrats win the presidency, they only need 50 seats in the Senate to become the majority party, because the vice president will break the vote. However, betting odds give President Trump an edge over winning reelection. This scenario actually reduces the likelihood that Democrats can regain control of the Senate.

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The Bernie factor

However, we have another potential development to consider. Senator Bernie Sanders (I-Vt.) Recently stated that he would use a decree to legalize marijuana. No other Democratic presidential candidate has suggested that he would adopt this approach.

What are the chances of Senator Sanders becoming president? Based on the betting sites, he has at best a 10% chance of becoming the Democratic candidate and beating President Trump. It's much better than the likelihood of Democrats winning the Senate.

However, US presidents can not legally use a decree to cancel a law passed by Congress. That is essentially what Senator Sanders is proposing. The Controlled Substances Act passed by Congress in 1970 and promulgated by then President Richard Nixon rendered marijuana illegal at the federal level in the United States. The chances that a federal court will overturn a decree that was trying to go directly against a law duly passed by Congress would likely be very high.

What this means for investors

The bottom line for investors is not to buy stock on the American legalization of marijuana as soon as possible.

For example, Cover growthof (NYSE: CGC) treat to acquire Surface Fund depends on changes to federal marijuana laws. There are other reasons why you may like Canopy Growth, but the odds seem to be multiplied compared to the conclusion of the Acreage transaction in the next few years.

This means that Canopy Growth and its peers may be limited to only participating in the US hemp market rather than the huge cannabis market. As a result, it may take longer to update the valuations of these companies than some investors expect. In addition, the relatively low valuations of US-based cannabis stocks, such as Green Thumb Industries (OTC: GTBIF) and KushCo Holdings (OTC: KSHB) could stay below their Canadian counterparts for a while.

A longer path to federal legalization of marijuana is not likely to slow down growth in states that have legalized or will legalize medical cannabis or recreational pot, however. And do not forget that even fearsome odds can evaporate as conditions change. For the moment, however, the probability of legalization of marijuana in the United States remains surprisingly low despite significant support from the Americans.