Adult-use cannabis dispensary in the U.S.
Now that Democrats control both chambers of the U.S. Congress and the White House, elected legalization proponents have declared their intent to advance federal cannabis legislation. While this would be a monumental step forward for the country, the 36 states that have successfully launched their own legal cannabis industries can’t be overlooked. When it comes to federal involvement in cannabis legalization, policymakers must consider the progress made in the states and how it could help mitigate nationwide legalization challenges.
For instance, how would the federal government’s reach impact established state markets with large investments of time and resources in commercial operations? What role could the federal government play to advance or incentivize states to move faster on social equity and social justice reforms? As the evolution of the cannabis industry continues to play out in almost all 50 states, Congress could enact meaningful federal change while protecting the progress and investments made in existing state systems. In other words, there is cause for federal action, but less could be more.
Let’s take a look at our nation’s recent history on this issue. Washington and Colorado – the first states to legalize cannabis for adult-use – opened their cannabis markets in 2012. In 2013, the federal government issued the Cole Memo to address the conflict between cannabis laws at the state and federal levels. The concisely written memo advised U.S. attorneys on law enforcement priorities, such as preventing diversion to the illicit market and distribution to minors.
Apart from the Cole Memo – and arguably hemp regulation – the federal government hasn’t taken action on regulating cannabis. But with that limited framework in 2013, new industries were built in many states. It’s hard to think of another U.S. industry that has advanced so much in the past decade without federal guidelines or support from regulatory agencies such the Food and Drug Administration or Department of Agriculture.
And while there is still plenty of room for improvement, there is ample grist to show that states are capable of successfully implementing their own legal cannabis markets. Colorado has seen nearly $10 billion in legal cannabis sales since its adult-use market opened in 2014, and about 15% job growth in the industry each year. And nationwide, consumer awareness about legal versus illegal products is increasing. One outcome of the 2019 vaping crisis shows customers gravitating toward the legal cannabis market for safe products.
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It’s also important to note that as legal cannabis sales have risen across the country, illegal sales have decreased. Analysts estimate total U.S. cannabis sales were over $20 billion in 2020, more than a 50% increase from 2019. At the same time, the Drug Enforcement Administration recently noted that cannabis legalization in the states reduces illicit market demand, particularly through interstate drug trafficking.
Given my experience in Colorado as the former Director of the Marijuana Enforcement Division, I know that autonomy and flexibility are key reasons Colorado’s legal cannabis program has been so successful. The ability of a state to quickly adapt policy in a rapidly changing industry helps keep consumers safe and businesses operating. Additionally, allowing localities to have the choice to opt out of legal cannabis sales does not create mandates on any area to embrace or even promote cannabis use.
But that is not to say that Congress should sit still while states continue to roll out new cannabis programs. Incremental federal changes such as de-scheduling cannabis’ Schedule I drug status, assisting ongoing social equity efforts, providing baseline regulatory guidance and banking reform could benefit and create widespread support for those inside and outside of the legal cannabis industry. All together, these efforts would help pave the way for more effective federal engagement without disrupting existing state programs.