Federal Cannabis Legalization: Coming Soon?

Federal Cannabis Legalization: Coming Soon?

The cannabis industry needs federal legalization, and it needs this legislation now. Although cannabis is legal in some form in most states, the lack of federal approval creates many unnecessary roadblocks to success, including problems with financing, insurance, supply chains, investment, etc. The patchwork of state laws is harming the industry and stunting its growth.

Two-thirds of the American public is firmly behind the legalization of cannabis, but there is a political divide. Nearly 80% of Democrats or those leaning Democrat support legalization while only 55% of Republicans and those leaning Republican do. So more Democrats in power should make passing a federal law easier. 

The results of the latest election improve the odds of federal legalization, although it will take some months to be certain. The Democrats will control the executive branch and the House in January 2021. Senate control depends on two seats in Georgia that will not be determined until January. Voters in six states passed positive cannabis laws. With more states legalizing cannabis, it has a better chance of gaining federal approval, but success is not certain. In the short term, passage of the MORE Act would ease the way for cannabis entrepreneurs and VA doctors.

Federal Law Proposals

Several proposed laws are currently before Congress, and House Majority Leader Steny Hoyer (D) announced that one such law, the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, will be brought to the floor in December. While other Marijuana reform acts are currently before Congress, such as the Medical Marijuana Research Act, the MORE Act is considered the most comprehensive and important one up for vote. It would remove cannabis from the Controlled Substances Act, which would reduce the friction between state and federal law. The act would also let VA Administration physicians recommend medical marijuana to vets living in states where it is legal. Also, it would let states expunge the records of people with low-level cannabis offenses.

 And while the act is expected to eventually pass the House, it’s unclear if that will happen in December or be postponed until 2021. Some lawmakers are worried about focusing on marijuana legislation before they pass another COVID-19 relief bill. 

Passage in the Senate will be more difficult if the leadership remains the same and clings to its current position on advancing and passing the act. In fact, progress may be delayed until early 2021.

State Law Changes

As more and more states embrace legalization, it becomes harder to reject it on the federal level. five states just voted for more favorable cannabis laws this election, including Arizona, Mississippi, Montana, New Jersey, and South Dakota. Now, a total of 15 states has approved cannabis for adult recreational use. Most other states allow some level of medical use. Only seven states, Idaho, Wyoming, Nebraska, Kansas, Tennessee, South Carolina and Alabama, ban all marijuana use.

  • In Arizona, voters voted to allow adults aged 21 or over to possess up to one ounce of marijuana and be allowed to cultivate a maximum of six plants for personal use. Voters rejected this same initiative four years ago. 
  • Mississippi voted to allow medical marijuana – up to 2.5 ounces per 14-day-period for certain debilitating conditions. 
  • Conservative Montana passed a resolution to legalize marijuana for those aged 21 or over. 
  • New Jersey voters passed a resolution for legalizing adult use, and the legislature is on a fast track to making that happen, according to Governor Phil Murphy, an advocate of the measure.
  • South Dakota went from banning all marijuana use to making recreational use legal for those 21 or over. Citizens with debilitating medical conditions will be able to purchase marijuana as well. 

With many states embracing legalization, US legislators don’t have much of a rationale for maintaining the federal ban. In fact, the general feeling in the US is that it’s past time to take action and change federal law. 

Senate Positions on Legalization

So far this year, the Democrats have failed to take control of the Senate despite polling that indicated they would. Currently, the two parties are tied at 48 senators. However, in the two Georgia Senate races, no candidate managed to get the mandatory 50% of the vote needed to win. According to Georgia law, the state must now hold a runoff election to determine the winners. So in January 2021, voters will cast their ballots in two Senate races that will have an enormous impact on the US government and its stance on cannabis.

Democratic Senate control would probably lead to federal legalization because Chuck Schumer would become the Majority Leader. He has already pledged support for a cannabis bill and would make it a priority. Nancy Pelosi, the Democratic Speaker of the House, has made similar promises. If a Democratic House and Senate passed legislation, the pressure on the President.

Most Republican legislators support legalization, but the party leadership does not. Current Majority Leader, Mitch McConnell, is not a supporter of a bill and would be unlikely to even bring one to the floor for a vote. If Republicans keep control of the Senate, the chances of passing a federal law are slim. For instance, David Perdue, one of the Republican Georgia candidates, wants to leave cannabis laws to the states and not take federal action. A Democratic candidate, Jon Ossoff, believes Congress should pass a federal law to legalize marijuana. Georgia could well determine cannabis policy for the foreseeable future. 

The End Game

The cannabis industry would become more profitable and attract more investors if it were legal on the federal level. Currently, the differences between state law and federal law pose many costly complications, including funding and supply problems. Federally insured banks cannot provide traditional loans, and transporting the product across state lines raises tricky legal issues. Also, selling cannabis for recreational use is a simpler process than selling medical marijuana, which comes with mounds of red tape. In fact, the reasons for federal legalization far outweigh the reasons against it.

The prejudices against cannabis are wearing away, and most Americans accept it for both medical and recreational use. Still, there are holdouts, and many of those are in government, particularly in the leadership.

November 12, 2020Comments Off

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