The growth of cannabis in the United States has been explosive over the past few years. There are now 11 states plus Washington DC that have legalized recreational cannabis, while a total of 33 states have legalized cannabis for medical use. 66% of US citizens want marijuana to be legalized, with Democrat respondents at an overwhelming 75%.
And the economy has embraced cannabis as well. Over $1.8 billion will be spent on regulated, legal, taxable cannabis in 2019, and a staggering 283,422 new jobs are expected to be added in 2020. More and more cannabis companies are being listed on US stock exchanges such as the NASDAQ. Distancing itself from archaic connotations and misconceptions, cannabis, particularly biotech associated with cannabis, is attracting substantial investor capital. Cannabis is being used in the development of new drugs for the treatment of pain and many chronic, inflammatory, and fibrotic diseases, as well as for autism spectrum disorders, schizophrenia, epileptic disorders, and amphetamine addiction.
The past few months have been quite the whirlwind to the cannabis industry, specifically for Colorado cannabis companies and consumers. As mentioned in one of our recent articles, House Bill 1230 has made public consumption a much more realistic goal in the near future. The SAFE Banking Act has been passed by an overwhelming vote which will make it easier on cannabis companies to utilize the financial and legal tools that were previously unavailable to them. States such as Colorado and recently Michigan have been quite progressive on their stance on cannabis, federally there has not been much movement – until now.
New Cannabis Legislation
On November 20, 2019, the House Judiciary Committee passed the Marijuana Opportunity Reinvestment and Expungement (MORE) Act of 2019. The landmark bill was sponsored by House Judiciary Chairman Jerrold Nadler, and can now move to a floor vote in the House of Representatives.
The MORE Act is an ambitious piece of legislation that affects not only the cannabis industry but citizens of the USA as a whole. This legislation would decriminalize marijuana use on a federal level by removing it from the list of schedule 1 controlled substances. This would have huge ramifications across the board.
Removal from this list would remove marijuana from associated tax codes, saving business owners from exorbitant tax rates which are often passed along to consumers. It would also retroactively affect those who have had non-violent, legal issues with cannabis in the past.
It would also introduce a 5% tax on cannabis that would go towards funding the newly created Opportunity Trust Fund, which assists those who were disproportionately affected by nonviolent cannabis infractions or crimes, as well as provide loans to small businesses in the cannabis industry.
Outlook for 2020
As always, legislation will play an important role in the future of cannabis in the upcoming year. Where the waters get a little murky is in the Senate, where Republicans hold an edge over Democrats 53-47. And given Mitch McConnell and his anti-cannabis outlook are in charge, there is not much hope of legalization from a Senate perspective until changes happen.
In the democratic controlled House of Representatives, however, the prospects look bright. The aforementioned House Judiciary Committee passed the MORE Bill by a vote of 24-10. This means that in the future, a floor vote may take place, which would have a good chance of passage.
While the MORE Act is a great step in the right direction, there are still many hurdles standing in the way of full federal legalization of cannabis. On a federal level, cannabis is still classified as a schedule one drug, which comes with a host of issues for the cannabis companies in legal states. Politically, there is pushback from the Reublican party. And yet there remains a strong buzz around cannabis as more and more state legislators and consumers begin to accept the fact that cannabis is here to stay. While it is impossible to predict the next big step forward for the industry, the future looks brighter than ever!