Meanwhile, Senate Majority Leader Chuck Schumer, D-N.Y., worked with Senators Ron Wyden, D-Ore., and Cory Booker, D-N.J., to create similar legalization bills in their chambers. The chances of passing such a bill in the Senate seem slim, as Democrats would need all their members and 10 Republicans to overcome the 60-vote hurdle required for a final vote. While understandable, these industry frustrations do not fully account for the upheavals that will result from federalization. While prohibition is a scourge of the industry in many ways, it is nonetheless responsible for the existence of the legal cannabis industry in the United States in its current form. Nationwide legalization cannot, therefore, be seen as pressing a button that automatically cures the ills of the cannabis industry. On the contrary, legalization at the federal level must be seen as a historic event that will fundamentally change the United States. The cannabis trade by introducing interstate trade into an industry defined by the unique absence of it. If this change is forced without sufficient preparation, the result will be chaos for both the new national market and the existing state regime, which will eventually replace it. Bloomberg and Mikos postulate that Congress should do exactly the same thing with cannabis: legalize it at the federal level, but allow states to maintain their current regulations and restrictions on interstate commerce — at least for a period of several years with a built-in sunset provision. This framework would allow growers and investors to get a return on their investment, while allowing small cannabis producers to prepare for interstate trade. With the built-in sunset clause to cease interstate commerce, these industry players would be forced to prepare for the ultimate reality that cannabis will be a highly competitive multi-billion dollar domestic market. «You can ban smoking, you can ban pets, but with marijuana, it`s a lot easier because it`s illegal all over the country,» Seattle attorney Bret Sachter told the Rental Housing Journal. Biden`s announcement means that ban is likely to change soon.
However, the lawyer notes that «the overall problem here is that, with a few exceptions, people can do whatever they want to protect their property, even if the prohibited conduct is not illegal.» The cannabis industry kicked in 2021 with high hopes for federal legalization, resulting in a massive increase in the value of cannabis shares. Eighteen months later, however, proposals for federal legalization continue to stagnate, and the industry continues to face unfair tax burdens, transaction costs, and regulatory nightmares caused by prohibition. The high hopes of the early days of the Biden administration have given way to disappointments and a decline in the value of stocks. Many wonder why Congress is taking so long to pass a bill to delay cannabis? Why can`t the federal government just legalize cannabis? The bill, dubbed the Marijuana Opportunity Reinvestment and Expungement Act, passed the House of Representatives last year but did not make progress in the Senate. In addition to decriminalizing marijuana at the federal level, the bill would establish procedures to erase previous convictions from people`s records and impose a tax on the sale of cannabis products. Morgan Fox, political director of the National Organization for Marijuana Law Reform, said, «It`s time for federal lawmakers to set aside partisan political differences and recognize that state-level legalization policies are publicly popular, successful, and in the best interest of our nation. However, with the advent of federal legalization, the pivot that supports all of this state-owned industry will be removed and interstate competition will collapse on these nubile and walled gardening industries. Creating a viable and predictable path to federal legalization will help mitigate state-level opposition and make federalization a reality.
A temporary suspension of interstate trade could help reduce the backlog and facilitate legalization at the federal level. President Biden announced yesterday that he is pardoning federal prisoners convicted of marijuana possession and urged governors to do the same at the state level. It also asks the Secretary of Health to examine how marijuana is covered by federal law, which is currently compared to heroin. In addition, public opinion on marijuana has changed rapidly, as we wrote here at TMC a few years ago after Oklahoma voters endorsed one of the nation`s most liberal policies on medical marijuana. Since 1969, Gallup has been asking Americans if they think marijuana use should be legal. The percentage of Americans in favor of legalization has steadily increased, from just 12 percent in 1969 to 68 percent in 2021, with half of Republicans supporting legalization. And when surveys distinguish between medical and recreational marijuana, nine in 10 Americans believe at least medical use should be legal. Notably, despite the administrative hurdles created by the federal ban, states have been innovative. Thirty-seven states have adopted comprehensive medical marijuana programs since 1996; 19 states have introduced recreational programs since 2012. During this time, states have resolved issues related to implementing medical and recreational marijuana programs through trial and error and learning from other states.
Recently, more and more states are addressing industry concerns related to social justice and corporate monopolies — and trying to ensure that communities that have been disproportionately affected by prohibition get a share of the industry once distribution is legal. President Biden made important news last week when he announced that he would use his pardon power to pardon those convicted of federal crimes for possession of marijuana. No one is currently incarcerated in federal prison for possession of marijuana. But Biden`s decision will set a record of more than 6,000 people previously convicted of possession, and possibly thousands more in the District of Columbia. Biden also asked the departments of Justice and Health and Human Services to examine how the federal government classifies marijuana as federal drug laws, which could lead to marijuana being classified as a drug with medical benefits and potential for abuse. This review of the placement of marijuana on the schedule could take a long time. This is not too surprising, especially on the eve of bitterly contested midterm elections. This is popular politics, especially among black voters, young democrats and independents. The only candidate who probably has the most to win is John Fetterman of Pennsylvania. Fetterman, who is the easiest candidate to run for the Democratic Senate, has made marijuana legalization a central part of his campaign and his final four years as lieutenant governor of Pennsylvania.
Fetterman spoke with Biden about marijuana reform at a Labor Day event in Pittsburgh, so the random timing of the White House action allows him to claim some recognition in an important race for Democrats. Aside from full legalization, which may not have enough support to overcome Senate filibuster, there has been bipartisan support from this Congress for a bill that would provide federal protection for banks that work with marijuana companies in states that have taken steps to legalize the drug.