Legendary marijuana advocates such as Jack Herer would be very happy at the state of play at the time of writing. In early June, Illinois unofficially became the 11th state in America (along with Washington D.C.) to legalize recreational weed. Medicinal marijuana is legal in another 22 states, and in Canada, cannabis is now federally legal – although its territories have differing rules regarding usage and growing.
A Gallup poll from late 2018 showed that approximately 66% of Americans now support the legalization of medicinal marijuana. The industry is worth a fortune to ‘legal’ states in tax revenue, and an increasing number of politicians are throwing their weight behind the effort to make weed legal in the United States.
According to Steve Dawkins of the Marijuana Policy Project, we could easily see up to 20 states legalizing recreational cannabis by the end of 2020. The Project believes that once weed is fully legal in half of American states, it will be the tipping point that forces Congress to end federal prohibition finally.
Federal reform of cannabis laws is a key aspect of several 2020 presidential candidates’ platforms but could the change come even faster than anticipated?
Legal Marijuana in 2019?
Quick-fire legalization is reliant on the actions of the Democrats who took over Congress in the midterm elections. After the mid-terms of November 2018, James Higdon of Politico spoke to Smoke Wallin, the president of a huge cannabis company in Santa Barbara by the name of Vertical.
Dozens of people contacted Wallin after hearing the news that Jeff Sessions had been fired as the Attorney General of the United States, also in November 2018. Sessions was famed for his anti-marijuana attitude, but Wallin was relatively nonplussed upon hearing the news. He said that Sessions was all talk and no action.
It was the departure of Pete Sessions that really grabbed his attention. Sessions was the chairman of the House Rules Committee but lost his seat to Colin Allred, a former pro-football player who was also a Housing and Urban Development attorney during the Obama administration. According to Wallin, Pete Sessions was the man responsible for blocking cannabis reform in Congress by denying votes on weed-related amendments.
With Pete Sessions booted to the curb in favor of a Democrat, the growing backlog of minor marijuana reforms could be tackled at long last. These reforms include allowing veterans to discuss medical marijuana with their VA physicians, along with clarification on banking rules in the industry.
After the mid-term results, 68% of House members represent districts where medicinal marijuana is legal. Therefore, the Democrats easily have the numbers to pass the upcoming amendments. Earl Blumenauer is a Republican, but he has been at the forefront of cannabis reform which he believes is ‘inevitable.’
A Tale of Two Sessions
It was long assumed that Jeff Sessions was the biggest barrier to marijuana legalization. After all, he repealed the Cole Memo, which was designed to prevent the Fed from interfering with state marijuana programs. However, Pete Sessions was in the background proving to be an even bigger thorn in weed’s side. By blocking key legislation, he ensured the industry was effectively ground to a standstill.
For all of Pete Sessions’ attempts to thwart the legalization of marijuana, he was akin to the little Dutch boy with his finger in the dyke. As he continued to stand firm as the leader of the Rules Committee, states such as Louisiana, Utah, and Oklahoma, traditionally against cannabis, all passed medical marijuana laws. In November 2018, 12 gubernatorial candidates won the governorship of a state by campaigning on a pro-weed platform.
According to Tom Angell of Marijuana Moment, it is the first Congress ever where marijuana reforms are possible. Now, there is effectively a queue of Congress members forming to introduce bills that had no chance of approval when the Republicans were in control. There were half a dozen marijuana-related bills filed in the house by the end of January 2019, for example.
Relevant bills that have, or will be, introduced include:
- State protection from federal interference.
- Changing banking regulations so that banks feel comfortable working with marijuana companies.
- Regulating marijuana like alcohol. This bill was introduced by Earl Blumenauer and proposed to take weed away from the control of the Department of Justice or DEA and give it to the ATF to regulate it like an alcohol product.
One main obstacle is the fact that the Republicans control the Senate, and there is still vocal opposition to cannabis reform. In 2020, 33 Senators are up for re-election, and 21 of them are Republican. Interestingly, nine of the Republican senators live in a state with a legal, medical marijuana program. Therefore, these politicians will be under pressure to allow pro-marijuana bills to pass once they get through the House.
Higdon spoke about how New York is an extremely important state. He believes that smaller states surrounding New York such as Massachusetts (which allows recreational marijuana), Rhode Island, Maine, Vermont, and New Hampshire, and Connecticut, felt pressured into acting.
According to Higdon who spoke to CBS News in January 2019, Illinois was the other key marijuana state. He spoke about how Michigan and Illinois were in a race to legalize weed with the former ‘winning’ by legalizing the herb in November 2018. Illinois ultimately followed suit to fulfill Higdon’s prediction in June 2019 when its state legislature passed an adult recreational bill that its Governor, J. B. Pritzker intends to sign.
The Senate voted to legalize hemp via the Farm Bill in late 2018. As you may know, industrial hemp must have less than 0.3% THC. Since hemp and marijuana come from the cannabis plant (they are different names for the same genus), the plant itself is federally legal. The issue lies in the plant’s compounds. CBD is effectively legal (please check your state for more information) federally, while the main issue seems to surround the psychoactive compound THC.
Higdon believes that since hemp is now federally legal, it is only a matter of time before marijuana follows suit.
As far as marijuana reform goes, Blumenauer has rapidly moved away from the rest of his Republican cohort. Before the November 2018 midterms, he proposed a blueprint to legalize weed by the end of 2019 fully. In October 2018, Blumenauer said that a full de-scheduling bill should be passed by the House. With a 36-seat majority and Democrat control of the Judiciary Committee, and Democrat Nancy Pelosi as speaker of the House, a de-scheduling bill would easily pass in theory.
As at May 2018, four leading Democratic presidential candidates had signed new legislation to federally de-schedule weed. The companion bills propose to remove marijuana from the infamous Controlled Substances Act and use tax revenue from sales to offer grants to socioeconomically disadvantaged people to get involved in the legal weed industry. Money would also be set aside to expunge previous marijuana convictions.
Blumenauer believes legalization is inevitable, and Democrats must either take the lead or lose the issue. He also warned that President Trump could hijack their plans, get involved in pro-marijuana reform, and take the credit. While Trump has no love for marijuana, it is not hard to imagine his keenness to do something that will be positively remembered.
Less than three years ago, weed was only fully legal in the West or the Rocky Mountains. The geographical landscape of legalization has changed beyond recognition in that timeframe. In the Northeast, for example, the herb will soon be legal from Maine to New Jersey, and from New York to Massachusetts.
We can thank Sex and the City star Cynthia Nixon for much of the momentum in the Northeast. Nixon primaried Governor Andrew Cuomo in the New York gubernatorial election in 2018 and placed marijuana front and center of her platform. Cuomo was placed under intense pressure. He has relented and is seemingly ready to pull the trigger on legalizing pot.
Thanks to the FOMO (Fear of Missing Out) phenomenon, New York’s smaller neighbors are acting fast in a bid to legalize pot. There was a similar situation in the Midwest, and now Illinois and Michigan have both legalized recreational weed, with Minnesota set to follow suit sooner rather than later.
As states continue to legalize the herb, the disconnect between states and the federal government needs to come to an end. Even in Florida, which is controlled by Republicans, legalization efforts are slowly progressing.
Will Marijuana Be Fully Legal in the United States by the End of 2019?
Unfortunately, the answer is ‘NO’ unless something remarkable happens in the next few months. The tide may be turning, but it is not going to do so in such a short timeframe. Any attempts at federal reform will be shunned in the Senate if pro-marijuana bills make it through Congress. That is because the Republicans still maintain control. However, things may change in 2020 when dozens of seats are up for grabs.
As is always the case, there is the issue of money. At present, cannabis-selling companies are subject to Section 280E of the United States Tax Code. These organizations are not allowed the usual corporate income tax deductions, barring costs of goods sold, which is only a small fraction of revenue. Therefore, marijuana companies are often exposed to a ludicrous corporate tax rate of up to 90%.
Reform of marijuana at a federal level would remove weed companies from Section 280E and cost the Fed an estimated $500 million in revenue each year. The Fed could add an excise tax, but that would push the price of weed so high in certain states that consumers would turn to the black market.
In summation, marijuana is very unlikely to become legal in 2019, but 2020 is possibly the year we have all been waiting for. The results of the elections for Senators seats will be very interesting. If things go just right, there may be enough pro-weed Senators to push through marijuana legalization finally.
As pressure mounts on President Trump, who will aim to be re-elected in November 2020, perhaps he will attempt to win votes by throwing his weight behind marijuana legalization efforts. We wouldn’t rule it out.