With Democrats in charge, cannabis advocates upbeat about US reforms – but legalization uncertain

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marijuana reform

Now that President Joe Biden has been sworn in and Democrats have taken control of Congress, many cannabis industry executives might expect some reform of federal marijuana policy within the next two years – and perhaps even full legalization.

The key question is how far Congress and the new Biden administration will go.

The industry’s current optimism is well-founded.

As a senator, Vice President Kamala Harris was a prime sponsor of the MORE Act, which would remove marijuana from the Controlled Substances Act. The House passed its version of that bill in December.

Moreover, newly minted Senate Majority Leader Chuck Schumer has voiced support for federal legalization and was a sponsor of the descheduling bill known as the Marijuana Freedom and Opportunity Act.

All of that adds up to the most cannabis-friendly political atmosphere in Washington DC in modern history. And all indicators are that Congress is poised to approve some form of marijuana reform.

The question is what form it will take:

  • Cannabis banking?
  • Coronavirus-related relief?
  • Reinstatement of the Cole Memo and other cannabis-friendly Department of Justice (DOJ) policies?
  • Or even legalization? (That could be a stretch, however.)

“With the new congress and new administration, everything is on the table,” said Steve Fox, strategic adviser to the Cannabis Trade Federation in Washington DC.

Fox expects “at least incremental change, and possibly far more.”

“Full legalization is possible, but moving any major legislation through Congress is challenging. And I’d expect it might be an uphill fight during the current session … but not impossible,” Fox said. “I’m very optimistic.”

But Fox – and other marijuana reform advocates in Washington DC – warned that full legalization could be years away, given its complexities and the fact Congress must first confront the coronavirus pandemic and a sputtering economy.

“Just because the Dems have everything right now, everyone thinks it’s a foregone conclusion that marijuana is going to be legalized,” said Mike Correia, lead lobbyist for the Washington DC-based National Cannabis Industry Association.

“I don’t know if that’s the case. I hope people have realistic expectations.”

While Correia agreed that legalization could occur in some form in the current two-year congressional calendar that began this month, he and others agreed it’s too early to have a clear picture of what is achievable in the next 24 months, particularly given the Democrats’ tenuous hold on the majority in Congress and the reality that they could lose full control in the 2022 midterm elections.

“It’s definitely going to be improved (odds in favor of legalization), and it could happen,” Correia said. “But there’s no guarantee that everyone is going to get everything they want.”

Where things stand

So far in 2021, two pieces of marijuana-related legislation have been introduced in Congress, both by Rep. Greg Steube, a Florida Republican:

  • H.R. 365 would move marijuana from Schedule 1 to Schedule 3 on the Controlled Substances List.
  • H.R. 430 would allow military veterans to obtain medical cannabis without fear of losing federal benefits.

But industry sources said neither measure is likely to succeed – or move major reforms through Congress.

Rather, industry officials are awaiting a clearer political landscape to emerge in coming months, as the Biden administration finds its footing and congressional Democrats begin wrangling with Republicans over legislation.

“What the legislative agenda is, of the majority party, is still taking form,” said Randal Meyer, executive director of the DC-based Global Alliance for Cannabis Commerce, adding that he’s been working to line up allies in Congress for cannabis reform.

“Biden’s team still has some spelunking, shall we say, to do,” Meyer added. “I’m bullish on the prospects, but the question of the vehicle is premature. Those are really just starting to shape up.”

And part of that exploration on Capitol Hill will be figuring out where cannabis reform fits into the Democratic Party’s overall agenda.

But, for now, the outlook is bullish.

“This is the best time for cannabis government affairs, federally, that has been to date yet, given the disposition of Leader Schumer to legalization – as he’s promised before publicly – and given the disposition of the House,” Meyer said.

“There’s substantial political will here.”

Some of the question marks

A key question is whether Congress will include language from the SAFE Banking Act in the upcoming coronavirus-relief package that the Biden administration and congressional Democrats will try to pass.

The legislation would enable financial institutions to serve the state-legal cannabis industry without fear of federal sanctions. Several industry officials have raised the possibility it could be a part of a new coronavirus-relief package.

SAFE Banking language was included in a separate coronavirus-relief bill that failed to gain final approval last year. It was later left out of another relief package.

“It’ll be up to Congress to turn the Biden plan into legislative language, and … there’s plenty of reason to believe that SAFE Banking could be included in a package,” CTF’s Fox said. “We just have to see how the negotiations play out.”

That’s one of several potential incremental wins that could be realized, even if Congress falls short of full legalization.

Other moves Congress or the Biden administration could make include:

  • Reinstating the Cole Memo and other DOJ guidance memos that were rescinded by former Attorney General Jeff Sessions in 2018.
  • Approving a stand-alone bill to prohibit the DOJ from using federal funds to interfere with the implementation of any state medical or recreational cannabis laws.
  • Getting state-legal marijuana companies included in coronavirus-relief efforts, such as making them eligible for Small Business Administration loans.
  • The removal of a budget rider that has previously prohibited the District of Columbia from enacting legal adult-use marijuana sales.

It’s also quite possible that more states will legalize via their legislatures this year, which could grease the skids for federal legalization, noted Steve Hawkins, executive director of the Marijuana Policy Project in DC.

“We could turn around and it’s June and there could be five or more states that have legalized,” Hawkins said, noting that MPP believes there’s a strong likelihood that at least six states will legalize recreational marijuana in 2021, including Connecticut, Maryland, New Mexico, New York, Rhode Island and Virginia.

“That could change the conversation in Congress,” Hawkins said.

Division or unity?

There might also be political divisions that erupt between marijuana business interests and activists who prize social justice reform efforts and consumer rights over industry priorities, Correia and others warned, especially if legalization does happen.

That’s because the immediate question accompanying a legalization bill would be: How does a national marijuana regulatory structure work?

“The question is, what is that (regulatory) model going to look like? And that’s something that a lot of people are jockeying for influence on right now, NORML included,” said Justin Strekal, political director at DC-based NORML.

Strekal also warned that NORML – and likely other activists – will be very willing to go to war if some industry interests try, for instance, to move marijuana to Schedule 3 instead of removing it completely from the list of controlled substances, which he said one industry group attempted last year during negotiations over the MORE Act.

“To quote (Minnesota) Congresswoman (Ilhan) Omar, ‘(Expletive) around and find out,'” Strekal warned.

John Schroyer can be reached at johns@mjbizdaily.com