There was great hope for U.S federal cannabis policy reform in 2022. As it turns out, the early 2022 optimism surrounding outright legalization or de-scheduling was never a reality, especially under a Democrat-led Congress and White House.
Nonetheless, we did see progress in the evolution of the debate from being an afterthought to entering the mainstream. Remember when then-Presidential candidate Mitt Romney dismissed even a discussion about this topic. Now, both parties have their cannabis reform champions. It was, after all, Sen. Mitch McConnell, who initiated the most significant federal cannabis policy reform in U.S. history via the 2018 Farm Bill. This is a dramatic departure from a decade ago when the issue was simply dismissed. Even the most insignificant mention of cannabis reform by a sitting federal elected official impacts cannabis capital markets and stock prices in real time.
That said, the SAFE Banking Act passed the House again, with the potential to be included in a $1.7 trillion omnibus spending bill, but did not advance through the Senate. It was blocked by, ironically, Sen. Mitch McConnell. While Safe Banking may not have, on its own, changed the economics of the cannabis industry, its companion bill, the CLIMB Act, would. For those of us who worked through the boom and bust of the Canadian public markets, it’s all but certain that the CLIMB Act would cause billions upon billions of dollars to be injected into the cannabis industry. This year will see the development of these two significant measures, but a split Congress will undoubtedly make them more challenging to advance.
Despite Joe Biden’s seeming hatred of the cannabis plant, he did something that no other sitting president has ever done. On December 2, 2022, he signed the “Medical Marijuana and Cannabidiol Research Expansion Act,” H.R. 8454, into law. This bipartisan legislation is the first stand-alone cannabis reform bill to pass both the House and Senate, marking a significant milestone in the evolution of federal cannabis policy. Momentum is building.
While I do not expect the White House to be a leader on this issue in 2023, the recent scandals coming out of the Executive Branch may cause President Biden to pull an Andrew Cuomo and push the measure to distract from these other matters.
This year I expect to see further pushes for 280e tax reform and bankruptcy reform at the federal level. A bankruptcy reform measure could instill greater confidence in the lending around the cannabis industry. And of course, there will be state ballot measures, despite the few major failures we saw last year in North Dakota, Arkansas, and South Dakota. In the 2024 election cycle, I’d watch for decriminalization ballot measures in Wyoming, Nebraska, Idaho, Texas, and Pennsylvania.
Ultimately, federal cannabis legalization in U.S. is still missing its “why.” Every country legalizes cannabis for different reasons. Sometimes it’s for medical access. Sometimes it’s for social or criminal justice reform. Sometimes it’s for the economy and job creation. We still don’t know the “why” that will make federal lawmakers in U.S. push cannabis reform forward. Until we do, it’s anyone’s guess.
