April is usually a pretty hectic month for the cannabis industry, with 4/20 celebrations getting a lot of attention – and sales.
But things heated up much earlier this year. In the first four days of April, the U.S. House of Representatives (once again, and narrowly) passed a bill to decriminalize marijuana, then days later approved (to overwhelmingly) legislation to reduce barriers to cannabis research. Additionally, Maryland lawmakers voted to include a measure on adult cannabis use in their state’s November ballot; New Mexico became the latest state to begin recreational sales; and this Thursday, New Jersey will begin selling recreational cannabis.
Widespread legalization of cannabis in the United States seems closer than ever: more and more states have passed recreational use laws; comprehensive legislation gets attention – and votes – in Congress; and the industry continues to mature with a stream of mega-mergers, high-value investments and steady sales.
“The fact that the House of Representatives voted [the Marijuana Opportunity Reinvestment and Expungement Act] in two successive sessions of Congress is really a sign that the end of federal prohibition is approaching,” said Steven Hawkins, president and CEO of the US Cannabis Council, a trade and lobbying organization.
However, while this is an industry that has long had a “not if, but when” belief in legalization, that what is seen as inevitable is not necessarily imminent. The MORE law, which received only three Republican votes, should not succeed in the Senate. Additionally, a separate legalization bill that Senate Majority Leader Chuck Schumer is expected to introduce this summer also may not garner the 60 votes needed to pass.
“In terms of passing from either [bill], it’s always a tough road to walk in the Senate,” Hawkins said. “But we’re not ruling anything out.”
the the lack of federal legalization hasn’t slowed down one of the fastest growing industries in the United States.
The cannabis industry reported sales estimated at $27 billion in 2021, up 35% from 2020, according to data released earlier this month by MJBiz, a cannabis trade publication and event organizer. of events. And in the next five years, he expects sales to nearly double.
“Right now, over 425,000 jobs in the economy are tied to the cannabis industry. With that, we see a continued increase in public support for legalization,” Hawkins said. “And we continue to see red and blue states pass laws to legalize cannabis for adult or medical use.”
As more states allow the sale of cannabis, companies in the nascent industry aren’t waiting for changes in federal law to claim their right.
Over the past year, there have been a few multi-billion dollar mergers. The latest: the acquisition of Columbia Care (CCHWF) by Cresco for $2.1 billion. If the deal closes as expected in the fourth quarter, the combined company would have more than 120 retail locations and dozens of facilities in 17 states and Washington, DC.
“It prepares us very well if a federal change happens soon,” Cresco CEO Charlie Batchell told CNN Business in an interview.
More than two-thirds of U.S. states have legalized cannabis in one way or another: Of the 37 that have medical marijuana laws, 18 of them have recreational cannabis laws, according to the National Conference of State Legislatures. And more could be on the way. States like Delaware, New Hampshire and Rhode Island are debating the legalization of cannabis for recreational use. Petition Campaigns and legislative efforts for medical marijuana programs are also underway in states including Kansas, Nebraska, North Carolina and South Carolina, said state policy director Karen O’Keefe. for the Marijuana Policy Project, a lobbying and advocacy organization.
The Safe and Fair Banking (SAFE) Act, which would make it easier for cannabis businesses to access banking services, is a big step towards broader reform. Because marijuana remains illegal in the eyes of the federal government, and despite 2014 advice from the Financial Crimes Enforcement Network, some financiers institutions have been wary of serving cannabis-related businesses for fear of violating anti-money laundering laws.
The SAFE Act bill is gaining traction in Congress and is now well positioned to become law, Hawkins said.
In addition to making it easier for financial institutions to work with cannabis companies, the SAFE Banking Act has long been touted as a public safety measure. Colorado Rep. Ed Perlmutter first introduced the legislation five years ago following deadly robberies at cash-only dispensaries.
Escalate these security issues after another recent period of criminal activity in dispensaries, Perlmutter asked Treasury Secretary Janet Yellen to “put the administrative muscle behind its passage.” Yellen responded that she supports the bill, in an exchange first reported by Marijuana Moment.
Other reforms, and even However, full legalization could come through other means, including the Farm Bill, said Rep. David Scott, chairman of the House Agriculture Committee, in a tweet last month. Scott pushed for the Farm Bill to include a provision that would “remove barriers for small businesses and black entrepreneurs to establish legal cannabis businesses under state law.”
But all of these piecemeal approaches to legalization could end up backfiring, South Carolina Republican Rep. Nancy Mace said.
Last year, Mace introduced the States Reform Act, a bill that seeks to decriminalize cannabis, regulate it federally like alcohol, impose a 3% excise tax, let states determine their own cannabis approaches and programs and open doors to banking.
“It’s bad enough to have a multi-billion dollar industry running on cash. It’s dangerous,” she said.
Bills that address a singular issue like banking or research may not make it through the courts, she said.
“It’s my fear. First, we are doing it right, constitutionally,” she said. “And, two, if we do a little piece of it, we’re not going to touch it for 20 years.”
Policy makers and industry members Nor should we lose sight of how individuals, especially people of color, continue to be criminalized for activities that are now legal at the state level, said Minority Cannabis Business CEO Amber Littlejohn. Association.
“First and foremost, we need to get people out of jail, and we need to stop arresting people for doing things that people make a lot of money for,” she said.
Nationally, black people are 3.6 times more likely than white people to be arrested for a cannabis-related reason, despite similar rates of use, according to the American Civil Liberties Union.
People of color also face huge barriers within the industry. Attempts have been made to create pathways into the industry for those with nonviolent marijuana convictions whose communities have been negatively impacted by the war on drugs. But those efforts have been largely unsuccessful due to state policies that limit licensing, fail to provide financial and business resources to people of color, and that benefit multi-state operators with deeper pockets, Littlejohn said.
“I think one of the biggest issues is that there seems to be an incredible disconnect between what people say they support and believe and what [becomes law],” she said. “It’s up to us, the collective us, to hold people accountable.”
In New Mexico, the cannabis industry could generate more than $300 million in sales annually and $50 million in tax revenue over the next 12 months, as well as create 11,000 new jobs in the state over the next for the next five years, according to Governor Michelle Lujan. Grisham’s office.
Between April 1 and April 3, the first weekend of legal adult-use sales in New Mexico, cannabis retailers sold more than $5.2 million worth of recreational and medical products, Grisham said.
Parin Kumar, CEO and co-owner of the recently opened Vana Society cannabis store in Clovis, on the state’s eastern border, said she had saw a steady stream of customers.
For small towns like Clovis looking to diversify their economy, the booming industry is a boon, which should bring new jobs and tax revenue.
“Especially in communities like Clovis, the buildings, the infrastructure, the school needs help, it can definitely do a lot for the community economically,” Kumar said. “It feels like we’re giving back.”