Victories by Jon Ossoff and Raphael Warnock in this week’s two Georgia Senate runoffs delivered the 2020 election outcome many in the cannabis world considered most important to federal reform: Democratic control of the U.S. Senate.
Federal legalization already had unprecedented momentum. The More Act, which would “deschedule” or remove, cannabis from the Controlled Substances Act, passed the Democrat-controlled House of Representatives in December with bipartisan support. Now incoming Senate Majority Leader, Sen. Chuck Schumer (N.Y.) will be the first leader of the upper chamber who supports ending federal prohibition. For the industry, it’s a welcome change from current leader Mitch McConnell (R-Ky.), a ardent supporter of hemp legalization who showed little interest in advancing cannabis reform legislation.
Charlie Bachtell, CEO of multi-state operator Cresco Labs called the Georgia outcome a “big win for cannabis” that would accelerate the normalization of banking access for the industry, generate tax revenue and create hundreds of thousands of good paying jobs.
Cannabis legalization is among the least divisive national issues, with majorities of voters in both parties consistently supporting access to REC and overwhelming majorities supporting MED and MED research..
Democrats controlling both houses of Congress is the “lynchpin for the deregulation of cannabis and cannabis like products on a federal level,” said Dennis O’Neill, president of Biomedican, a company which has a method to manufacture rare cannabinoids from yeast. He predicted it the new dynamic in Washington would unleash a “tsunami of capital” into the cannabis market.
However, like other observers, he cautioned that change is unlikely to happen overnight, or all at once.
Maritza Perez, director of the office of national affairs at the non-profit Drug Policy Alliance said the group would continue to push for federal legalization.
The decision puts the advocacy non-profit somewhat at odds with the industry. Many business voices argue incremental changes such as banking access or the end of hated tax rule 280E — both of which would bring them significant benefits — are more realistic short-term goals.
Perez argued that the U.S. House of Representative’s December passage of the More Act, “shows there’s support,” for full legalization, as does feedback from Alliance’s network of community groups and organizers. Perez anticipates that the group will push to reintroduce the bill or one like it in the first quarter. “We don’t want to lose any of the momentum that we gained,” she said.
While the Drug Policy Alliance is generally supportive of normalizing the industry, Perez said the group prioritizes reforms with a social justice component. The More Act, for example, would create a cannabis sales tax to benefit communities harmed by the war on drugs. No matter what happens, “We’ll definitely see some progress on the issue,” she said.
Smoke Wallin, CEO of CBD company Vertical Wellness, predicted that no matter what reforms get passed into law, the cannabis industry would remain deeply fragmented at the national level.
The prediction dismisses one of the industry’s most cherished hopes, being able to realize the efficiencies inherent in a national market. No matter what reform passes, Wallin anticipates individual states will retain strong control of their own cannabis industries after banking reform and even federal descheduling become the law of the land. “Every state has a vested interest in their existing [cannabis] infrastructure,” he said.
Despite that fractiousness, he anticipates a growing consensus on legalization. As a growing number of conservative states, like Oklahoma, warm to legal MED and REC, Wallin said more Republican lawmakers are likely to follow the example of Cory Gardner (R-Colo.), the recently defeated Senator who initially opposed legalization but came around to supporting it.
Gardner supported legalization as a matter of states’ rights, but also perhaps because a legalization opponent faced long odds in Colorado. “It’s obviously a popular issue,” Wallin said, and politicians “mostly believe in getting themselves re-elected.”
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