November 2, 2021
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Written by Highlyte
After a tide of state-by-state victories in the 2020 elections, cannabis connoisseurs, industry insiders, and savvy marketers look to the upcoming elections for the future of marijuana regulation. The trend of decriminalization and legalization will likely continue, with new pro-cannabis measures being introduced for Maryland, Missouri, and Texas ballots. But now that 34 states have relaxed restrictions on weed, one question looms larger than any others: when will we see legalization or regulatory reform at a federal level?
On July 14th, 2021, Senate Majority Leader Charles Schumer drew back the curtain on the Cannabis Administration and Opportunity Act. The bill will remove marijuana from the Controlled Substances Act, allowing states to determine cannabis law at their discretion. This would be a huge victory for the industry, eliminating numerous financial hurdles and restrictions on research studies. Issues pertaining to transport, banking, and taxation would all see tremendous strides.
Furthermore, Schumer’s bill would be an enormous win for social justice. As its title implies, the bill would create programs to benefit those whose lives have been damaged by the War on Drugs, starting with programs to expunge criminal records for non-violent cannabis offenses - really providing opportunities in the legal market.
The bill is by no means a magic bullet, however, and federal legalization would bring its own share of challenges, leading savvy pot proponents skeptical. Unintuitively, federal legalization would likely result in more fees and regulation than the current state-by-state model. The bill stipulates that every cannabis seller would need a federal sales permit, similar to what is required for alcohol products, on top of any state-mandated certifications. Furthermore, a federal excise tax would be applied to all cannabis sales, starting at a 10% rate, increasing to 25% over three years.
These issues aside, there is also the question of how likely the act is to pass, and the bill has some undeniable problems. Protocols for the federal jurisdiction of cannabis-related investigations are currently vague, and certain details are omitted entirely. Those gaps provide opponents of cannabis reform with footholds to oppose the bill. This is not the first time Federal Cannabis reform has been brought before the senate, and the LA Times reports that “most experts believe the bill will not pass.”
In order to make it through the Senate, Schumer needs complete support from the Democrats as well as 10 Republican votes, or else the bill can be derailed with a filibuster. And even if the bill passes, there is no guarantee that Biden would sign the bill. The President has voiced support for marijuana decriminalization, but not full legalization.
Nationwide legalization seems like an inevitability, but the political climate might not be there yet. Even if Schumer’s bill doesn’t make it to Biden’s desk, the conversations it has started will help lay the groundwork for future legislation. Senators are actively seeking input on Federal cannabis reform, and seem to appreciate the magnitude of the changes such a bill could introduce.
For marketers, the biggest take away is simple: regulation and compliance are only going to get more complicated. Allowing cannabis entrepreneurs to operate on a federal level will open up many opportunities for common sense development, but where promotion is concerned, cannabis will need to meet two sets of standards. Brands will not only need to meet federal standards; they will need to adapt their state-by-state approach accordingly as well, as legislation will undoubtedly shift in the wake of national reform.
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