Is Cannabis on Track for Legalization?

Legendary marijuana advocates such as Jack Herer would be pleased with the state of play at the time of writing. Illinois joined ten other states in legalizing recreational cannabis in June 2019. The state was also quicker than others to start selling adult-use marijuana. It began the process in January 2020.

Medicinal marijuana is legal in another 22 states. Cannabis is now federally legal in Canada, although its territories have different rules regarding usage and growing. Meanwhile, the Mexican Supreme Court has ruled that outlawing cannabis use is ‘unconstitutional.’ It is only a matter of time before the herb becomes fully legal south of the border.

When this happens, the United States will be the prohibition meat in a cannabis sandwich. The pressure on the federal government to bite the bullet and allow Mary Jane to run free in the U.S. is immense. One of the most recent Gallup polls, from late 2019, found that support for legal weed is steady.

66% of Americans are in favor of legalized MMJ; the figure is the same as in 2018.

The industry is worth a fortune to ‘legal’ states in tax revenue, and an increasing number of politicians are throwing their weight behind the effort to make weed legal in the United States.

A couple of years ago, Steve Dawkins of the Marijuana Policy Project, said we could easily have 20 states legalizing recreational cannabis by the end of 2020. Ultimately, we may not even have a twelfth state by then!  The Project believes that once weed is entirely legal in half of American states, it will prove the tipping point. Congress will have to end federal prohibition finally.

The recent pandemic has put all talk of fully legal cannabis on the back burner for now. What does the future hold?

 

A Tale of Two Sessions

Quick-fire legalization was reliant on the actions of the Democrats who took over Congress in the 2018 midterm elections. However, progress is slow despite the removal of two staunch anti-marijuana candidates from positions of power. In November 2018, Jefferson Beauregard Sessions was fired as the Attorney General of the United States.

He was notoriously anti-pot and had an attitude towards the herb that was straight out of the 1930s. Sessions intimated that he would begin federal prosecution against those who committed marijuana crimes even in states where it was legal. Ultimately, however, he was all talk and no action.

It was the departure of Pete Sessions that really grabbed our attention. Sessions was the chairman of the House Rules Committee but lost his Congressional seat to Colin Allred. Jim McGovern, a Democrat, is now the head of the Committee. Many industry experts believe Pete Sessions was the man responsible for blocking cannabis reform in Congress. He used to deny votes on weed-related amendments.

With Pete Sessions booted to the curb in favor of a Democrat, we would hope to see the backlog of cannabis reforms tackled. Within the first few months of 2020, we saw around 40 marijuana-related reforms and bills introduced in various states.

After the 2018 midterm results, 68% of House members represented districts where medicinal marijuana is legal. Therefore, the Democrats easily have the numbers to pass upcoming amendments. Earl Blumenauer is a Republican, but he has been at the forefront of cannabis reform, which he believes is ‘inevitable.’

Blumenauer’s Blueprint

As far as marijuana reform goes, Blumenauer has rapidly moved away from the rest of his Republican cohort. Before the November 2018 midterms, he proposed a blueprint to legalize weed by the end of 2019 fully. In October 2018, Blumenauer said that the House should pass a full de-scheduling bill. It has a good chance in theory. The Democrats control the Judiciary Committee and also have the Speaker of the House.

Blumenauer believes legalization is inevitable, and Democrats must either take the lead or lose the issue. He also warned that President Trump could hijack their plans, get involved in pro-marijuana reform, and take the credit. Trump has no love for marijuana. However, it is not hard to imagine his keenness to do something that will be positively remembered.

Several companion bills want to remove the plant from the infamous Controlled Substances Act. They also propose to use the tax revenue from sales to offer grants to socioeconomically disadvantaged people to get involved in the legal weed industry. The money would also be set aside to expunge previous marijuana convictions.

Blumenauer continues to fight for legal weed. He believes that we will ‘turn this corner’ by 2025. Intriguingly, he says it could happen in two years “if this election in November goes the way it should.” Blumenauer also said that “The American public is so far ahead of the Congress on this issue, it’s laughable.” Hard to argue with that point!

Unstoppable Momentum?

Less than five years ago, weed was only fully legal in the West or the Rocky Mountains. The geographical landscape of legalization has changed beyond recognition in that timeframe. In the Northeast, for example, the herb could soon become legal from Maine to New Jersey and from New York to Massachusetts.

We can thank Sex and the City star Cynthia Nixon for much of the momentum in the Northeast. Nixon primaried Governor Andrew Cuomo in the New York gubernatorial election in 2018 and placed marijuana front and center of her platform. Cuomo was put under intense pressure. He has relented and is seemingly ready to pull the trigger on legalizing pot.

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Thanks to the FOMO (Fear of Missing Out) phenomenon, New York’s smaller neighbors are acting fast in a bid to legalize pot. There was a similar situation in the Midwest, and now Illinois and Michigan have both legalized recreational weed. Minnesota could follow suit, as a lawmaker in the state revealed a bill seeking full legalization in 2020. However, it may take over a year to come into action, according to Ryan Winkler, who introduced the bill.

As states continue to legalize the herb, the disconnect between states and the federal government needs to come to an end. Even in Florida, which is controlled by Republicans, legalization efforts are slowly progressing.

Which States Are Most Likely to Legalize Cannabis?

Several states are making serious attempts at fully legalizing marijuana, or at least creating a workable MMJ program. There’s no question that the tide is turning. States such as Louisiana, Utah, and Oklahoma – all traditionally against cannabis – recently passed medical marijuana laws. In November 2018, 12 gubernatorial candidates won the governorship of a state by campaigning on a pro-weed platform.

There were high hopes that New Mexico would fully legalize cannabis in 2020. It recently tried to pass a recreational marijuana bill, though it fell in the Senate. It is a blow, but Governor Michelle Lujan Grisham has support for legalization and will bring the bill back in 2021.

Over in New York, lawmakers are pushing cannabis reform as part of The Safer NY Act collection of bills. The New Jersey Assembly recently approved cannabis decriminalization ahead of its legalization referendum. The state is set to vote on whether to allow adult-use cannabis in November 2020.

Arizona’s MMJ program is thriving, and 66% of residents support a cannabis legalization ballot measure. Unfortunately, it seems as if Smart and Safe America, the group behind a full legalization measure, hasn’t gained enough signatures to make the ballot.

Other states considering a recreational or MMJ bill include Arkansas, South Dakota, Florida, Missouri, and Mississippi. A least a couple of measures will likely reach the ballot in November 2020. At that stage, it is down to the voters to make the right decision.

What Will Happen Next?

The short answer is, ‘no one knows.’ The Senate voted to legalize hemp via the Farm Bill in late 2018. The industrial hemp in question must have less than 0.3% THC. Hemp and marijuana come from the cannabis plant (they are different names for the same genus). It seems odd that one is legal, and the other isn’t.

The issue surrounds cannabinoids. While hemp is now federally legal, CBD is not. Most states permit its use without any legislation to that effect. Cannabis also contains a high level of THC, an intoxicating compound. CBD is not intoxicating, which is why most locations are lenient when it comes to using it.

Momentum for legal cannabis is growing, and it is easy to be optimistic. There are dozens of pro-cannabis bills up for discussion. However, the Republicans control the Senate, and there is still vocal opposition to cannabis reform. In 2020, 33 Senators are up for re-election, and 21 of them are Republican.

Interestingly, nine of the Republican senators live in a state with a legal, medical marijuana program. Therefore, these politicians will be under pressure to allow pro-marijuana bills to pass once they get through the House.

With hemp now legal, it seems inevitable that cannabis will follow suit, or is it?

Prepare to Wait

Researchers at the University of Colorado, Boulder, and the Santa Fe Institute, tried to predict when we’ll see legal cannabis. They compiled data on the trajectories of 170 policies that began at the state level before becoming federal law. Looking only at the first five states that legalized recreational cannabis found that we would see full federal legalization by 2021.

However, the date falls back to 2023 when you look at the timing of the first nine states to legalize fully. Overall, the research suggests that America will have fully legal marijuana by the end of 2022. However, there is a 30% chance that it won’t happen by 2028!

Bear in mind that this analysis came from 2018. A lot of things have happened since then. The inevitable legalization of cannabis in Mexico within the next few years will change predictions surely.

Of course, there is the issue of money. At present, cannabis-selling companies are subject to Section 280E of the United States Tax Code. These organizations do not have the usual corporate income tax deductions. An exception is the costs of goods sold, which is only a small fraction of revenue. Therefore, marijuana companies are often subject to a ludicrous corporate tax rate of up to 90%.

Reform of marijuana at a federal level would remove weed companies from Section 280E and cost the Fed an estimated $500 million in revenue each year. The Fed could add an excise tax. However, that would push the price of weed so high in particular states that consumers would turn to the black market.

When Will Marijuana Be Fully Legal in the United States?

The good news is that it seems a matter of when’ rather than ‘if.’ Once Mexico follows Canada’s lead, America will have to make a big decision. Otherwise, it faces the prospect of people smuggling weed across both borders with regularity! As always, it all depends on state and national lawmakers.

The tide is turning, but it is not going to do so in such a short timeframe.

Any attempts at federal reform will be shunned in the Senate if pro-marijuana bills make it through Congress. That is because the Republicans still maintain control. However, things may change in November 2020 when dozens of seats are up for grabs.

The results of the elections for Senators’ seats will be fascinating. If things go just right, we may have enough pro-weed Senators to push through marijuana legalization finally. Yet we know the wheels of government turn slowly. No matter what, enough Republicans will protest against cannabis to try and grind things to a standstill. In reality, the best-case scenario is legalization between 2022 and 2024. If it happens before then, we should see it as an unexpected bonus.