Tag: united states

News broke yesterday in the United States regarding the cannabis plant’s status at the federal level. After decades of outright cannabis prohibition at the national level in the U.S., the DEA agreed to reschedule cannabis from its current Schedule I status to Schedule III.

Arguably the most significant domestic impact that should arise out of the rescheduling if/when it is implemented is the end of the 280E issue that most cannabis companies face in the United States. A provision of U.S. tax law (280E) prohibits businesses from leveraging many basic tax write-offs if a Schedule I substance is part of their business.

U.S. businesses that ‘touch the plant,’ such as cannabis cultivators and cannabis retailers, pay significantly more in federal taxes every year compared to other agricultural and retail businesses because of 280E. For U.S. businesses that are subjected to 280E, rescheduling to Schedule III may be like winning a lottery. Researchers estimate that ending 280E for the United States cannabis industry would lower the industry’s federal tax burden by over $2 billion per year.

“Today, the Attorney General circulated a proposal to reclassify marijuana from Schedule I to Schedule III,” Justice Department Director of Public Affairs Xochitl Hinojosa said in a statement to Marijuana Moment on Tuesday evening. “Once published by the Federal Register, it will initiate a formal rulemaking process as prescribed by Congress in the Controlled Substances Act.”

“Facilitating research and reducing burdens on medical cannabis patients, providers, and the businesses that serve them” are other benefits of the proposed policy change according to the Marijuana Policy Project.

Cannabis advocates in the United States were hopeful that cannabis would be de-scheduled completely, removing all federal criminal penalties for cannabis and leaving the issue largely up to individual states. A move to Schedule III would still keep state-level businesses in the U.S. in conflict with federal policy, and federal criminal penalties for cannabis activity would remain in place.

The emerging international cannabis industry will be a big winner if/when the United States reschedules cannabis, albeit perhaps not in direct ways. Rescheduling in the United States does not replace international agreements that prohibit certain forms of cannabis commerce, including the same type of commerce that is occurring in much of the U.S. However, the butterfly effect of U.S. rescheduling could be substantial.

First and foremost, the symbolism of the United States updating its federal cannabis policy for the first time in over 50 years is significant. The United States once led the charge at the global level to prohibit cannabis in the first place, with many nations adopting parts of the United States’ harmful policies decades ago. The U.S. rescheduling to Schedule III will never right all of the wrongs of prohibition, but it does send a very loud message to the entire world that prohibition is a failed public policy, that it is a new era, and that it’s time for a more sensible approach.

The United States is obviously an important player in the world banking system, and as the cannabis industry continues to go global, entities will need proper access to that system. Jamaica’s Trade Minister previously indicated that his nation’s medical cannabis export industry was experiencing “major roadblocks” when trying to gain access to banking, pointing to federal policy in the United States as contributing to the issues. Perhaps financial institutions will be less hesitant to work with cannabis companies once the U.S. reschedules cannabis. Only time will tell.

Cannabis stocks in North America could be in for a wild ride in the coming years, particularly in the case of Canada. The entire landscape for Canadian and U.S. stocks could be overhauled because U.S. cannabis companies that ‘touch the plant’ are currently prevented from being listed in major U.S. exchanges due to cannabis’ Schedule I status.

Additionally, since cannabis is legal at the national level in Canada, Canadian companies are allowed to be listed on major U.S. exchanges, and many of them also have footprints in other countries. Will a North American stock listing shuffle occur due to rescheduling? A lot of things are still murky, but it’s definitely something to keep an eye on, as a tectonic shift could be coming in the not-so-distant future.

United States cannabis companies may still be hindered in many ways if/when cannabis is rescheduled to Schedule III. However, if 280E goes away, and if more U.S. cannabis companies can be listed on major exchanges, some U.S.-based companies will presumably turn their eyes toward the emerging international cannabis industry and develop plans for expansion. For years Canada has held a clear advantage over the United States and other countries on the global stage, but that could be changing to some degree with so much more money flowing through the U.S. industry.

An undeniable winner for everyone across the planet is a looming boost in cannabis research in the United States. Cannabis research in the United States was always hindered by the Schedule I status, presumably by design. A move to Schedule III would remove some of the hurdles that researchers and scientists have historically come up against. Research that is conducted anywhere on Earth, including in the United States, benefits people everywhere by increasing our collective understanding of the cannabis plant and how it can be best utilized by humans.

Historically, the United States has led the charge in prohibiting cannabis in all of its forms. Starting in the 1930s, the United States prohibited cannabis, even for medical purposes, and imposed its will on other countries until they did the same.

What resulted is various international agreements containing prohibition provisions, many of which are still in place to this day. Meanwhile, other countries such as Uruguay and Canada have not only legalized cannabis at the national level for medical use but also for recreational use.

In the United States cannabis remains illegal at the federal level, however, nearly half of the states in the U.S. have now passed adult-use measures, and nearly every state has legalized cannabis for medical use to some degree. Support for national reform is greater than ever in the U.S., leading many advocates to believe that federal reform will finally happen this year.

One factor that many advocates attached their policy hopes to was possible rescheduling by the DEA. Cannabis is currently classified as a Schedule I substance, which is defined as “drugs with no currently accepted medical use and a high potential for abuse.”

Other substances on the federal Schedule I list in the United States include “heroin, lysergic acid diethylamide (LSD), marijuana (cannabis), 3,4-methylenedioxymethamphetamine (ecstasy), methaqualone, and peyote.”

Obviously, cannabis should not be on the same list as those other substances. According to documents that recently surfaced, the U.S. Department of Health and Human Services is recommending that cannabis be re-scheduled to Schedule III and has conveyed that to the DEA. Per Marijuana Moment:

The head of the U.S. Department of Health and Human Services (HHS) says his agency has “communicated” the agency’s “position” on marijuana rescheduling to the Drug Enforcement Administration (DEA) and has continued to offer additional information to assist with the final determination.

HHS for the first time confirmed that it had recommended moving cannabis from Schedule I to Schedule III under the Controlled Substances Act (CSA) on Friday, releasing a trove of documents it submitted to DEA last year amid a Freedom of Information Act (FOIA) lawsuit initiated by attorney Matt Zorn.

According to the DEA, “Schedule III drugs, substances, or chemicals are defined as drugs with a moderate to low potential for physical and psychological dependence. Schedule III drugs abuse potential is less than Schedule I and Schedule II drugs but more than Schedule IV.”

“Some examples of Schedule III drugs are: products containing less than 90 milligrams of codeine per dosage unit (Tylenol with codeine), ketamine, anabolic steroids, testosterone.” the DEA states on its website.

For comparison purposes, the DEA currently lists “Xanax, Soma, Darvon, Darvocet, Valium, Ativan, Talwin, Ambien, Tramadol” as Schedule IV substances.

Many cannabis advocates had hoped that cannabis would be descheduled completely. Tobacco and alcohol are not part of the federal controlled substances scheduling lists, and both substances are responsible for considerably more health issues in the United States compared to cannabis.

It is unclear at this time whether the DEA will follow the recommendation from the U.S. Department of Health and Human Services.

The United States has historically led the charge when it comes to global cannabis prohibition, so any time cannabis policies are reformed in the U.S. it’s good news for the rest of the world, in addition to being good news domestically.

Unfortunately, 2022 did not yield national legalization in the U.S. as many cannabis advocates had hoped, however, there were still many notable victories. Below is NORML’s top ten cannabis policy events from 2022 per a news release:

#1: THREE MORE STATES ENACT ADULT-USE LEGALIZATION LAWS

Voters and lawmakers in three more states — Maryland, Missouri, and Rhode Island — enacted laws in 2022 legalizing adult-use marijuana possession and regulating retail cannabis markets. Voters in Missouri voted in favor of a constitutional amendment while Maryland voters approved a legislative referendum. Rhode Island’s law was enacted by the legislature. In total, 21 states — comprising nearly one-half of the US population — have now adopted laws regulating adult use marijuana production and retail sales.

“Reformers achieved numerous significant legislative victories in 2022,” NORML’s Executive Director Erik Altieri said. “As more lawmakers recognize that advocating for marijuana policy reforms is a political opportunity, not a political liability, we anticipate future legislative gains in 2023 and beyond.”

#2: TENS OF THOUSANDS OF AMERICANS RECEIVE MARIJUANA-SPECIFIC PARDONS AND EXPUNGEMENTS

The President of the United States and several state officials issued mass pardons and expungements in 2022 to those with prior low-level cannabis convictions. In October, President Joe Biden granted pardons to over 6,500 people with federal marijuana possession convictions. In Connecticut, Colorado, Oregon and elsewhere, officials issued over 100,000 marijuana-related pardons and expungements. To date, two dozen states have enacted legislation explicitly facilitating the expungement of prior marijuana-specific convictions. As a result of these laws, NORML estimates that 2 million Americans have had their cannabis-related convictions set aside in recent years.

“Hundreds of thousands of Americans unduly carry the burden and stigma of a past conviction for behavior that most Americans, and a growing number of states, no longer consider a crime,” NORML’s Deputy Director Paul Armentano said. “Our sense of justice and our principles of fairness demand that public officials and the courts move swiftly to right the past wrongs of cannabis prohibition and criminalization.”

#3: SENATE FAILS TO MOVE SAFE BANKING ACT

The 117th Congress adjourned without members of the US Senate holding any hearings or votes on either the Secure and Fair Enforcement (SAFE) Banking Act or other significant pieces of marijuana reform legislation. Since 2019, House members have advanced the legislation on seven separate occasions. The Senate companion bill had 42 co-sponsors, including nine Republicans.

“It is unfortunate that Congress, and members of the US Senate specifically, failed to take this opportunity to affirm the legitimacy of state-legal marijuana markets and instead acted in a way that will continue to deny this emerging legal industry access to basic financial tools and services,” said NORML’s Political Director Morgan Fox. “Until Congressional action is taken, state-licensed marijuana businesses, the hundreds of thousands of people they employ, and the millions of Americans that patronize them will continue to be at a higher risk of robbery due to the cash-heavy nature of this industry created by outdated federal laws. Furthermore, smaller entrepreneurs who seek to enter this industry will continue to struggle to compete against larger, more well-capitalized interests.”

Prior to the 2020 election, Sen. Chuck Schumer – then Minority Leader – pledged on multiple occasions that he would prioritize bringing legislation to repeal the federal criminalization of cannabis to a floor vote.

#4: MORE LAWMAKERS ENACT WORKPLACE PROTECTIONS FOR CANNABIS CONSUMERS

State lawmakers adopted numerous laws in 2022 limiting employers’ ability to either fire or refuse to hire employees solely based upon their off-the-job marijuana use. Specifically, lawmakers in California, the District of Columbia, and Rhode Island prohibited employers from discriminating against workers who test positive for carboxy-THC on a drug test, while protections for patients were enacted in several other states (e.g., Louisiana, Missouri, and Utah). In total, eight jurisdictions — California, Connecticut, the District of Columbia, Nevada, New Jersey, New York, Montana, and Rhode Island — have enacted statutes limiting employers’ ability to hire/fire workers for their recreational cannabis use in certain circumstances, while more than half of medical marijuana access states have enacted similar workplace protections.

“These decisions reflect today’s changing cultural and legal landscape surrounding cannabis,” NORML’s Deputy Director Paul Armentano said. “It is time for workplace policies to adapt to this new reality and to cease punishing employees for activities they engage in during their off-hours that pose no legitimate threat to either workplace safety or productivity.”

#5: HISTORIC PERCENTAGES OF AMERICANS SAY CANNABIS SHOULD BE LEGALIZED

The percentage of Americans who support adult-use cannabis legalization remains at record highs. National survey data compiled by Data for Progress reported that 74 percent of likely voters now “support ending the federal ban on marijuana.” For the third consecutive year, polling data compiled by Gallup found that 68 percent of US adults say that “the use of marijuana should be legal.” Separate polls released this year by Fox News, Monmouth University, YouGov, Politico, and several others similarly reported that most Americans back legalizing cannabis.

“There is no buyer’s remorse on the part of the American people,” NORML’s Executive Director Erik Altieri said. “In the era of state-level legalization, voters’ support for this issue has grown rapidly — an indication that these policy changes have been successful and are comporting with voters’ desires and expectations.”

#6: FBI FAILS TO PROVIDE COMPREHENSIVE MARIJUANA ARREST FIGURES FOR THE FIRST TIME

Data provided in October by the US Federal Bureau of Investigation reported that in 2021 over 400,000 drug-related seizures involved cannabis; however, for the first time in decades the agency failed to provide national estimates regarding the number of people arrested for marijuana-related violations. Data previously provided by the FBI has allowed NORML to track yearly marijuana-related arrests since 1965.

“At a time when voters and their elected officials nationwide are re-evaluating state and federal marijuana policies, it is inconceivable that government agencies are unable to produce any explicit data on the estimated costs and scope of marijuana prohibition in America,” NORML’s Deputy Director Paul Armentano said.

#7: POTUS SIGNS LAW FACILITATING CLINICAL CANNABIS TRIALS AND DRUG DEVELOPMENT

President Joe Biden signed legislation into law facilitating the federal approval of cannabis-specific clinical research and drug development. It is the first time in over 50 years that a President has signed a stand-alone piece of legislation loosening federal marijuana prohibitions.

Under the new law, the US Attorney General is provided with a 60-day timeline to either approve or deny applications from scientists wishing to conduct clinical trials involving the use of cannabis by human subjects. The law also mandates the US Attorney General to solicit applications from those seeking to grow cannabis for either research purposes or for potential drug development, and it provides a timeline for the AG to approve those applicants. It also calls upon federal agencies, including HHS, to provide a report on the “potential therapeutic effects of cannabidiol or marijuana on serious medical conditions.”

NORML’s Political Director Morgan Fox said, “While the significance of POTUS signing the first stand-alone cannabis policy reform bill should not be overlooked, in truth, we don’t need more research to know definitively that prohibition is a misguided and disastrous policy.” He added: “That said, this legislation is certainly a step in the right direction that shows there can be bipartisan cooperation on this issue.”

With advocates facing a divided Congress in 2023, virtually any efforts to advance cannabis-specific reform legislation would require bipartisan support.

#8: ANALYSIS: STATE-LEGAL MARIJUANA INDUSTRY EMPLOYS OVER 428,000 FULL-TIME WORKERS

The state-licensed cannabis industry added over 100,000 new jobs in 2021 and now employs over 428,000 full-time workers, according to data compiled in February by Leafly.com and Whitney Economics.

According to its latest report, the cannabis industry created an average of 280 new jobs per day in 2021. That represents a 33 percent year-over-year increase, and it marks the fifth year in a row of annual jobs growth greater than 27 percent.

“At a time when the rest of the economy is struggling and people are leaving their jobs in droves, the legal cannabis industry is blooming, showing exponential employment growth, and attracting talented and driven individuals from across the workforce,” NORML’s Political Director Morgan Fox said.

#9: SURVEY: OVER 90% OF PAIN PATIENTS REPORT REDUCING THEIR OPIOID INTAKE FOLLOWING MEDICAL CANNABIS

The overwhelming majority of pain patients provided medical cannabis treatment report either reducing or ceasing their use of opioid medications, according to data published in August in the Journal of Addictive Diseases.

A team of Israeli investigators affiliated with Tel Aviv University assessed the relationship between cannabis and opioids in a cohort of patients with non-cancer specific chronic pain. All of the patients enrolled in the study were prescribed medical cannabis therapy in accordance with Israel’s medical cannabis access laws. Among those patients who reported using opioids at baseline, 93 percent either “decreased or stopped [using] opioids following cannabis initiation” – a finding that is consistent with dozens of other studies involving numerous other patient populations.

“The data is clear and consistent,” NORML’s Deputy Director Paul Armentano said. “Cannabis is effective in treating a variety of forms of chronic pain and, for some patients, it provides a viable alternative to potentially deadly opioids.”

#10: MISSISSIPPI BECOMES 37TH STATE TO LEGALIZE MEDICAL CANNABIS ACCESS

State lawmakers passed comprehensive legislation in February regulating the production and dispensing of medical cannabis products. The legislation was enacted 15 months after state voters initially passed a similar medical marijuana legalization initiative. However, the courts later struck down the state’s citizens’ initiative process – thus nullifying the 2020 election result.

“Marijuana access has been long overdue for Mississippi’s patients,” NORML’s State Policies Manager Jax James said. “The overwhelming majority of voters decided in favor of this policy change two years ago, and while lawmakers cannot make up for lost time, they have an obligation to roll out this program as swiftly as possible so that patients can finally access the medicine they need.”

November 8th was Election Day in the United States, and cannabis reform was on the ballot in several jurisdictions, both at the state level as well as at the local level. Voters in five states had the chance to vote on adult-use legalization measures – Maryland, Missouri, Arkansas, South Dakota, and North Dakota. Unfortunately, only two of the measures were approved.

The first state to have a victory announced was Maryland. The measure in Maryland was somewhat unique, in that it was essentially an up or down vote, and after having been approved, it now tasks lawmakers to come up with public policy that implements adult-use legalization.

“State lawmakers have had many years to prepare for this moment,” NORML Deputy Director Paul Armentano said in a press release that I received by email. “Statewide polling had consistently shown that a supermajority of Marylanders support legalizing cannabis, and the outcome of this referendum was never in doubt. Now it is incumbent upon lawmakers to move swiftly to adopt rules to oversee a regulated cannabis marketplace in accordance with voters’ demands.”

The other state that passed a legalization measure yesterday was Missouri. It took a bit longer for victory to be announced, as the results in Missouri were much closer compared to Maryland, however, the result of overall victory was still the same in the end. Missouri became the 21st state in the U.S. to pass an adult-use legalization measure.

“This is truly a historic occasion,” said Dan Viets, co-author of Amendment 3, Missouri NORML Coordinator and Chair of the Amendment 3 Advisory Board in a press release that was emailed to me. “This means that the great majority of the 20,000 people who have been arrested year after year in Missouri will no longer be subject to criminal prosecution for victimless marijuana law violations.”

The measure in Missouri permits adults to possess up to three ounces of cannabis and to cultivate up to six flowering plants, six immature plants, and six plants under 14 inches at home for their own personal use.

“Voters in both red and blue America agree that it’s time to enact sensible cannabis laws that replace prohibition with regulations that protect public health and safety while fostering a vibrant small business sector that can create jobs and new tax revenue for their communities,” said Aaron Smith, co-founder and chief executive officer of the National Cannabis Industry Association about the state victories in a press release that was emailed to me. “With nearly half of Americans now living in a state with legal cannabis, it’s long past time to harmonize federal law with the growing number of popular state cannabis programs across the country. The first step toward realizing that goal would be to enact the bi-partisan SAFE Banking Act.”

Unfortunately, voters in Arkansas, North Dakota, and South Dakota all voted down the legalization measures in their respective states. In the case of South Dakota, the state’s voters previously approved a legalization measure, however, after various legal issues another legalization vote was held and voters apparently had a change of heart.

The State of Texas was a winner from a local perspective, with five jurisdictions (Denton, Killeen, San Marcos, Elgin, and Harker Heights) voting to reduce penalties for personal cannabis possession.

“Texans have shown that they want major cannabis law reforms in Texas via polling, legislative engagement, and now at the local ballot box! This will have a positive impact on the almost half a million people living in these cities. While these local advancements are important in mitigating harm on citizens and reprioritizing law enforcement time, they result in a patchwork of differing marijuana enforcement policies based on location. It is time for lawmakers to take steps to enact statewide reform when they convene in January 2023,” Texas NORML’s Executive Director Jax James said in a press release that was emailed to me.

The 2022 election marks the first time in U.S. history where less states approved legalization versus approving them when given the chance, which is a fact that cannabis opponents are touting to anyone that will listen. While technically the results in some states in the 2022 election were not as favorable as some had hoped, the election still had its cannabis victories and the emerging cannabis industry will continue to expand as a result. The states that failed to pass a legalization measure this time around will hopefully get on the right side of history they next time they have a chance to do so.