Election Day holds promise for marijuana industry reforms across United States

For the first time, both the marijuana-reform movement and the $32 billion U.S. cannabis industry have little to fear on Election Day.

In a historic first, both major-party candidates for president have signaled support for state-level marijuana legalization.

And since both former President Donald Trump and Vice President Kamala Harris have signaled support for the ongoing rescheduling process, it seems marijuana could become a Schedule 3 substance sometime in 2025.

Instead of facing threats from the executive branch, marijuana reforms are likely to be stuck in a congressional stalemate that shows no sign of breaking.

“I just don’t see Congress passing much, regardless of what happens with this election,” Steve Reilly, a co-owner and head of government relations at Massachusetts-based marijuana multistate operator Insa, told MJBizDaily.

Marijuana reforms

An act of Congress is required to achieve banking protections for plant-touching companies and to implement a national framework for marijuana and intoxicating hemp products.

Most election projections show Democrats losing control of the U.S. Senate, and 60 votes are still needed to overcome Senate filibuster rules and pass major legislation, such as the long-awaited SAFER Banking Act.
“I struggle to see us getting over 60 votes in the Senate, regardless of what happens” on Election Day, Insa’s Reilly said.

“I’m not super optimistic about any legislation there.”

Yet there’s still hope for banking reform as well as some action on hemp-derived cannabinoids via other means – and that’s before this historically unproductive and chaotic session of Congress ends in January.

U.S. Farm Bill and SAFER Banking

Federal lawmakers are well overdue to pass a new Farm Bill.

Industry observers remember that the 2018 Farm Bill unleashed the intoxicating hemp products that are proliferating across the country.

Though it’s unclear how much appetite there will be to pass a ban on intoxicating hemp products – let alone enforce such a prohibition – the fact that the Farm Bill is considered a “must-pass” bill raises the likelihood of movement.

And there are renewed hopes that an agreement can be struck on Capitol Hill during the lame-duck session to resurrect the SAFER Banking Act.

A push to hitch cannabis banking protections to other legislation – possibly a budget bill – could materialize in December, said Adam Goers, a senior vice president at The Cannabist Co., a New York-based MSO.

“We really do think a big deal is coming,” Goers said.

But exactly which lawmakers would be willing to compromise what hinges on voters.

A Republican Senate majority would put the SAFER Banking Act under the authority of a Republican leader.

To date, only the U.S. House of Representatives has passed a cannabis banking bill.

In the current session, under ousted former Speaker Kevin McCarthy and his successor, Mike Johnson, cannabis reform did not get so much as a hearing.

Still, today’s general election represents more movement in Washington’s gradual but unmistakable shift toward accepting marijuana policy as another legitimate issue – if not one that’s a priority for every member or either party.

“If I were to bet my 401(k) on it, I would say it’s better to have the Dems in there,” said Andrew Kline, a senior partner at Perkins Coie and chair of the firm’s cannabis group, told MJBizDaily.

“But I think, either way, this industry is going to be in a better place after the election than they are today.”

Rescheduling and legalization

Reclassifying marijuana from Schedule 1 to Schedule 3 of the Controlled Substances Act would provide relief from Section 280E of the Internal Revenue Code – a sea change that would give an immediate boost to plant-touching companies.

Down the road, the federal government’s long-awaited acknowledgement that marijuana has medicinal value could lead to advances in research and product development.

But there are still differences between the main candidates: Industry sources and Capitol Hill lobbyists contacted by MJBizDaily agree that, on the aggregate, Harris appears friendlier to marijuana than Trump does.

Of the two, only the Democratic nominee is calling for national legalization, as she did in a campaign memo and October media appearance.

Trump did endorse Florida’s adult-use legalization effort, Amendment 3, in early September – and was the first of the two major-party candidates to address marijuana at all.

However, the Republican nominee has been silent since and hasn’t signaled any national priority.

“There is some concern (among the industry) for how it’s going to be handled since they haven’t been super specific,” said Florida-based attorney Paula Savchenko, founding partner of the Cannacore Group.

In a twist, no movement toward interstate commerce and national legalization is preferable for some operators, whose business models are based on individual state markets.

That said, there’s still a net positive regardless of who wins the presidency.

“Both candidates have committed to cannabis reform, and that should be enough to inspire optimism for the cannabis community as we look forward,” said David Culver, senior vice president for public affairs at the U.S. Cannabis Council, a Washington, D.C.-based lobbying group for regulated marijuana operators.

Marijuana ballot measures

In many ways, the electoral prospects for marijuana have not been brighter.

Adult-use marijuana legalization is on the ballot in Florida, North Dakota and South Dakota – all red states.

While victories in all three is a long shot – polling suggests Florida is the likeliest win – a sweep would push to 27 the number of states with regulated adult-use marijuana.

But if voters pass adult-use legalization bills in any of the three, the need for federal marijuana reform ought to become more of an urgent priority for lawmakers.

If voters reject all three, giving more credence to the theory that state-level efforts have halted at a “red wall,” the presidential candidates’ endorsements still ought to carry weight.

“On Capitol Hill, it’s likely that Congress will remain divided, but incremental reform is both possible and likely in the next Congress,” added Culver, who called the next session “the best opportunity for reform that we’ve had to date.”

Chris Roberts can be reached at chris.roberts@mjbizdaily.com.