In every state except Idaho, Kansas, and Nebraska, there is some legal provision for the possession and consumption of cannabis for medical or adult use purposes. Yet, the United States government, since the enactment of the Controlled Substances Act of 1970, continues to list “marihuana” on the List of Controlled Substances along with the most dangerous and addictive drugs, but there is active and planned legislation in Congress that would, if made law, officially end the federal prohibition on cannabis.
The policy disconnect between 47 states and the federal government comes with significant and mounting costs for cannabis businesses, a rapidly growing sector. According to market analyst BDSA, cannabis sales in the United States grew by 48 percent between 2019 and 2020 with total nationwide sales in 2020 of $17.5 billion.
According to state records, Nevada sold nearly $700 million in cannabis products in 2020, a number that includes both medical and adult use sales. Oregon’s adult use sales tally was $1.1 billion. California cannabis businesses led the nation with some $4.4 billion in adult use cannabis and derivative products sold last year.
But because “marihuana” is on the List of Controlled Substances, these many businesses are considered illegal drug manufacturers and dealers and thereby lack access to traditional banking services and cannot deduct business expenses from federal taxes. Interstate commerce is strictly prohibited under federal law, and each state is an utterly cloistered market, from manufacturing to retail sales.
The Safe Banking Act passed the U.S. House of Representatives on April 19 of this year and now awaits action in the Senate. In a broad sense, the bill generally prohibits a federal banking regulator from penalizing a depository institution for providing banking services to a legitimate cannabis-related business.
The Marijuana Opportunity Reinvestment and Expungement Act of 2021 or MORE Act has been reintroduced in the House but has not yet to come up for a vote. The bill is multi-faceted and would decriminalize cannabis and remove it from the List of Controlled Substances. The sweeping legislation would provide for “reinvestment in certain persons adversely impacted by the War on Drugs.” The bill would also expunge cannabis offenses from criminal records, and more.
Meanwhile, in March of this year, senators Ron Wyden (D-OR), Corey Booker (D-NJ), and Charles Schumer (D-NY) said they would make cannabis reform a priority this session. They said they would introduce legislation language for a comprehensive descheduling and restorative justice bill, and at the end of July, senators Wyden, Booker, and Schumer unveiled draft language of the Cannabis Administration and Opportunity Act. The language is meant to be vetted and revised through a process of stakeholder input. Senate Majority Leader Schumer said he’d like to receive all comments by September 1 of this year.
But there is a lot to captivate lawmakers’ attention. For some insight into the meaning and status of active cannabis legislation in Congress, we spoke with Morgan Fox, spokesperson for the National Cannabis Industry Association (NCIA).
Will removing cannabis from the List of Controlled Substances bring international-scale companies like Philip Morris into the cannabis business?
“I’m sure that you will see that to some extent, but a lot of this issue I think just ignores the fact that you have to take into account consumer demand,” Fox said. “And consumers, especially in the consumer cannabis world, are increasingly wary of purchasing cannabis from big companies. They have a strong desire to spend their money with companies that are smaller and are dedicated to things like environmental sustainability, social justice.”
According to Fox, Senate Majority Leader Charles Schumer has said the Senate will not act on the Safe Banking Act until they consider more comprehensive reform – the Cannabis Administration and Opportunity Act. Fox and the NCIA do support comprehensive cannabis legislation introduced and proposed, but for Fox, incremental cannabis law reform only strengthens broader legislative efforts. For many, especially small, cannabis businesses, their continued survival is contingent on access to traditional banking services.
“There is a misconception among Democratic leadership that passage of incremental reform like the Safe Banking Act will, A, slow down momentum for more comprehensive reforms that have much more social justice provisions in them, but also that they will somehow trigger a series of events that will lead to a huge corporate takeover of cannabis. In my experience, both of those things are not accurate.
“First of all, we’ve seen that in the history of cannabis policy reform, that incrementalism is the name of the game and that every time a positive forward step is taken, it makes it that much easier to take another step forward. And it makes lawmakers that much more comfortable supporting more wider-ranging bills.
“Secondly, the Safe Banking ACT is much more helpful for small businesses than it is for larger companies, most of whom, almost all of whom have banking services already and already have access to capital. For them, they can afford the status quo. Small businesses cannot, and access to traditional lending and access to banking services is literally life or death for the survival of their business.”
For more, listen to the interview posted above.
Music credits as reported through the Public Radio Exchange, in order of appearance:
Song: Adder 47
Artist: FXU
Album: the Classics
Label: I-Label
Date: 2015
Duration: 1:01
Song: Ark
Artist: FXU
Album: the Classics
Label: I-Label
Date: 2015
Duration: :52
Song: 4573
Artist: FXU
Album: the Classics
Label: I-Label
Date: 2015
Duration: :47
Song: Dog 37 (Lab Mix)
Artist: FXU
Album: the Classics
Label: I-Label
Date: 2015
Duration: 1:23
Song: Bliss and Blast
Artist: FXU
Album: the Classics
Label: I-Label
Date: 2015
Duration: 1:06
Song: Sidewalk Vertigo
Artist: FXU
Album: the Classics
Label: I-Label
Date: 2015
Duration: 2:13
Song: At the River
Artist: FXU
Album: the Classics
Label: I-Label
Date: 2015
Duration: 1:03
Song: Shamans Wish
Artist: FXU
Album: the Classics
Label: I-Label
Date: 2015
Duration: 1:12
Song: Fistral
Artist: FXU
Album: the Classics
Label: I-Label
Date: 2015
Duration: :55
