2017 Cannabis Regulatory Outlook: A Game of Wait and See
Perhaps no other event in the movement’s relatively short history cast such a looming shadow over the legal cannabis industry as November’s seismic U.S. presidential election.
As election results rolled in, social media and message boards filled up with folks trying to decipher just what it all meant for a $7.1 billion emerging industry that is expected by some to hit $50 billion by 2026.
The new administration is viewed by many as generally “unfriendly” to legalization in general. If you’re looking at legal cannabis as perhaps a future or even near-present business endeavor (or maybe you have recognized the potential promise and have already waded knee deep into the industry), it’s understandable that you might be a little nervous about what lies ahead.
Don’t panic just yet, however, says Mason Tvert, the 34-year old Communications Director for The Marijuana Policy Project in Colorado. A well-exposed marijuana legalization advocate, The Boston Globe has dubbed Tvert “marijuana’s top evangelist.”
“Support for ending marijuana prohibition is growing rapidly, both in terms of medical and adult use,” Tvert says. “The latest national poll from Quinnipiac University showed 59% of American voters were in support of making marijuana legal for adults, and 93% were in support of medical use.”
And more states than ever are looking at both adult-use and medical marijuana legalization laws, according to Tvert. That assertion is backed up by recent New Frontier Data research that shows a 78% increase year-over-year in cannabis-related bills proposed during the 2015-2016 congressional session.
“There’s really more activity than ever before at both the state level and at the federal level,” he says. “We’re seeing legislation in Congress gaining more traction than previous years, and we’re more bipartisan than ever before. More and more Republicans are co-sponsoring these bills and speaking out in favor of reform.”
On Capitol Hill, the dog with the best chance to hunt currently, according to Tvert, is House Bill 975 (HR-975), or the bi-partisan (eight Republican, eight Democrat co-sponsors) Respect State Marijuana Laws Act. The bill would make law the policy adopted under the Obama Administration of not interfering in state marijuana laws where a sufficient regulatory system is in place and enforcing compliance issues among producers and the distribution channel.
“There are also appropriations amendments that certainly are going to be important in light of questions surrounding what approach the Justice Department will take,” Tvert says. “As of right now the federal budget prohibits the Justice Department from using funds to interfere in state medical marijuana laws. They’re going to be passing a new budget next month, and we are hoping Congress will once again adopt that rider.”
Alternative MMJ Facts
So why all the panic lately around the legal cannabis industry? Because for most of the mainstream media staked out on one side of the aisle or the other on this administration, discussion of maintaining the status quo from the previous administration just doesn’t sound sexy enough.
“That’s exactly what’s happening, is that it’s just being overblown (by the media),” Tvert says. “The administration has not changed courses on marijuana policy. If you look at comments made by the Attorney General, they would seemingly suggest the administration will maintain the same policy or adopt something similar in respect to state marijuana laws. The guidance issued under the previous administration is still in place and they are reviewing it.”
The question for Tvert and his colleagues at The Marijuana Policy Project in Denver is not whether the current administration will adopt a friendly outlook on legal cannabis. It’s more a matter of resource allocation.
“Does the Department of Justice intend to use its limited resources to prioritize the enforcement of federal marijuana laws? And comments Sessions has made suggest they do not. He’s repeatedly acknowledged that they are working with limited resources and could not possibly fully enforce federal marijuana laws in states that have rejected them,” Tvert says.
Financing Possibly Coming Soon?
Just as Tvert has reason for optimism on the legalization side of things, there was good news recently for legal cannabis business operators.
In January, President Trump’s nomination for Treasury Secretary, Steve Mnuchin, indicated that he would consider working with federal agencies to make financing and banking more accessible for local cannabis businesses.
According to Justin Strekal, the National Organization for the Reform of Marijuana Laws (NORML)’s Political Director, state-licensed marijuana business face a web of conflicting regulations when it comes to finances and tax law.
Specifically, Strekal writes in a blog post at NORML.org, federal prohibitions keep legal cannabis businesses from working with financial institutions, processing credit cards, and taking standard business deductions. When asked about these financial hurdles, Mnuchin says, “I will work with Congress and the President to determine which provisions of the current tax code should be retained, revised, or eliminated to ensure that all individuals and businesses compete on a level playing field.”
Strekal goes on to argue that making sure legal cannabis business operators have fair and equal access to banking and credit is an issue for Congress to take up, but it’s still encouraging to hear that the administration is open to finding something that works for both sides.