Business in cannabis

Deemed essential during the coronavirus in every state with regulated cannabis in some form speaks volumes with how impactful this industry has become on a national level and how powerful it could be in the upcoming election. With eleven states and the District of Columbia that have legalized recreational cannabis or adult-use and 33 states and the District of Columbia that have legalized medical cannabis, this emerging voter bloc is putting their industry center-stage on state and national domestic agendas.

This article was first published in the Cannabis Law Journal on November 1, 2020.

The cannabis industry has been good for states especially during the pandemic. Sales have gone up and the increased revenue has helped at a time when every state has had to cut budgets and is seeing a financial crisis at home. The industry is capitalizing on that message too in states with ballot measures by pitching themselves as a lifeline and new revenue source that can fund roads, schools and public safety. Legal sales and excise taxes would help fill deep budget gaps that have wreaked havoc on states and local communities over the last seven months. Five states have cannabis on their ballots: Arizona, Montana, New Jersey, and South Dakota – on legalizing use and sales for recreational or adult-use, while two states – Mississippi and South Dakota will decide on medical use. In each of these states, polling consistently shows strong support among voters for these ballot initiatives. And with polling showing a majority of Americans want to see cannabis (marijuana) declassified as a Schedule 1 drug, eyes remain focused on a national push to legalize it.

The evolution of the cannabis industry in just a few short years and how it has professionalized into a multi-billion dollar retail industry with bipartisan support is more than notable. Industry organizations, groups and coalitions have formed to create a powerhouse with a loud voice. Nationally, advocacy groups like NORML, Marijuana Policy Project, Marijuana Majority and LEAP have sought to organize cannabis consumers as an electoral force. Head Count’s Cannabis Voter Project offers insightful information for the cannabis voter including voter registration, lawmakers’ views on cannabis by state and state ballot initiatives.

The cannabis voter is typically a one-issue voter, largely made up of young people whose voter registration is unaffiliated. And as a one-issue voter, they aren’t typically interested in a candidate’s party affiliation just in the candidate that supports their cause. If a candidate supports the industry, the cannabis voter supports that candidate. In several state, local and federal races candidates have made cannabis legalization a key part of their platform. We saw this up close in 2018 with now-Colorado Gov. Jared Polis. In his bid for governor, then-Congressman Polis who had established the Congressional Cannabis Caucus in the U.S. House of Representatives, had been a long-time supporter of legalizing adult-use, before it was popular, and touted his cannabis-friendly voting record during the campaign. And cannabis voters turned out big for him.

Congress is also paying closer attention to cannabis on groundbreaking legislation that could exponentially expand the industry. The SAFE Banking Act of 2019, would create protections for depository institutions that provide financial services to cannabis-related legitimate businesses and service providers for those businesses. The bill passed on September 25, 2019 with bipartisan support in the House of Representatives by a vote of 321-103 but hasn’t been taken up in the U.S. Senate yet. SAFE banking was also included in both versions of the HEROES Act, a Democrat-led stimulus package for coronavirus relief that passed in the House on May 15, 2020 and on October 1, 2020. The HEROES Act was never taken up in the U.S. Senate. The MORE Act is bipartisan legislation that removes marijuana from the Controlled Substances Act, thus decriminalizing the substance at the federal level and enabling states to set their own policies. The bill is currently expected to come up for a vote in the U.S. House of Representatives during the lame duck session taking place after the election.

Cannabis has also been a hot topic during the presidential debates. Vice President Joe Biden and Sen. Kamala Harris have shared their ticket’s public support for adult-use decriminalization, moderate rescheduling, federal medicinal legalization, allowing states to set their own laws and expunging prior cannabis convictions. It is difficult to definitively say where the Trump administration is on cannabis policy. The president at times has voiced some support for modest reform legislation but his administration has often attacked pro-cannabis policy actions, including reversing previous guidance during the Obama administration on cannabis prosecutions for immigrants making them ineligible for citizenship if they consume cannabis (marijuana) or work in the industry.

November 3, 2020 may be a national game-changer for cannabis and with this voter bloc well organized and working hard to get out the vote, it could make all the difference for an evolving industry on the brink of an even bigger boom going forward.