Legislative Updates in the Cannabis Industry

Cannabis Legislative Updates

The House of Representatives does not want to interfere with state laws.

The House of Representatives approved cannabis legislation that would block the Department of Justice from interfering with state cannabis laws, including those allowing recreational use, cultivation and sales.  Many experts are calling this one of the most significant victories in the history of the cannabis reform movement.  This amendment also protects cannabis laws in Washington D.C. and other U.S territories.  The measure easily passed with a 267-165 vote.  This vote has led to expert analysis and theorization, with many experts seeing it as affirmation that large-scale federal reform is upon us.

In 2015, the last time this amendment was up for consideration, it came nine votes short of passing with a final vote of 206-222.  The 61 yes votes gained, in the past four years, shows a significant shift in public opinion.  Taking a further peek back in history, in 2014 a law was enacted to protect medical cannabis laws within a state’s border.  The inclusion of adult-use programs, in the current proposed legislation, is a significant expansion to the current medical law.

Former President Barack Obama directed the Justice Department not to interfere with state cannabis laws.  When current President Donald Trump took office, he reversed this directive.  Although the federal government has not prosecuted businesses in states where cannabis is legal at all levels, the industry still struggles due to the position of the federal government.  Will the federal government shut down my business, is a question in the back of any cannabis business owner’s mind.  There is also limited access to banking due to the illegal nature of cannabis at the federal level.  This leads to increased crime such as robbery and theft.

While, this is a step in the right direction for cannabis advocates, the legislation still needs to be approved by the Senate.  Currently the Senate has a small Republican majority, led by Senate Majority Leader Mitch McConnell, who, by the way has said he opposes legalized cannabis.   If the vote plays out like the House of Representatives’ vote, most republicans will vote no, and most democrats will vote yes.   We will be following updates from the senate, and will provide you with up to date information as we have it.

New York will Decriminalize Recreational Cannabis.

A push to legalize recreational cannabis in NYS has failed.  Back in March, I wrote a blog post titled “Cannabis in NYS, What’s Next,” where I discussed the future of the industry in NYS.  As many cannabis advocates are disappointed about the recreational cannabis bill not passing, I urge you to reference back to this post.  Sometimes with a little more time, comes a lot more opportunity.  Keep planning and working towards your goals.

State leaders could not reach a consensus in the final days of the legislative session.  In a statement from Senator Liz Krueger (D-Manhattan) she said, “we came very close to crossing the finish line, but we ran out of time.” Despite broad support and polls showing a favorable public opinion, lawmakers could not agree on the details such as how much tax to apply to each industry silo, how tax revenue should be spent, how past cannabis convictions should be handled, control of local communities, and much more.

The law not passing is more significant than “we’ll try again next time.”  As we head into an election year, legalization may be an uphill battle.  Passing the bill could potentially be years out in NYS.   Many politicians and government officials are less than thrilled.  Melissa Moore, New York state Deputy Director for the Drug Policy Alliance said, “as a whole, this could have been an enormous economic engine for the state, instead, what we have right now is continuation of the status quo.”

New York is a “lead” state.  Many people think that when New York takes action other states will follow.  There are many theories as to why, but it may have to do with New York’s ability to create “brands.”  As the cannabis market increases brands and IP development are the ultimate next steps.

What’s Next? 

When Plan A doesn’t work, you turn to Plan B.    Lawmakers in NYS have voted to eliminate criminal penalties for public possession, and the use of recreational cannabis.  Instead of jail time, someone in possession of, or using recreational cannabis, would receive a fine, similar to that of a parking ticket.  The fine would be $50 for possessing less than one ounce of cannabis, or $200 for one to two ounces.   The bill will also allow for past convictions, for possession of limited amounts of cannabis, to be overturned.

In a time when New York is waving bye to the wealthy, and blaming Washington for a $2.3B loss in tax revenue, they are also missing out on increased tax revenue, from not only a brand new industry, but an extremely popular one.  We have now incentivized state resident’s to cross the border to Massachusetts, and frequent places like Theory Wellness, a recreational dispensary whose sales totaled $11 Million in 5 months.  Let’s not forget to mention, half of its 50,000 customers came from New York State.