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Change drives innovation, and the U.S. is poised for a seismic shift in cannabis legislation with broad implications for social justice and economic health.
Several notable pieces of legislation are currently proposed or working their way through Congress. These include the Cannabis Administration & Opportunity Act (CAOA), a bill that Senate Majority Leader Chuck Schumer (D-NY) plans to file in April 2022. CAOA would decriminalize cannabis and support research, public safety, and restorative social justice initiatives.
There is also the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, which would eliminate criminal penalties and remove cannabis from the controlled substances list. Even if cannabis were to be legalized on the federal level, there remain significant hurdles regarding the industry’s access to financial institutions.
The bipartisan Secure and Fair Enforcement (SAFE) Banking Act, which is widely expected to receive a favorable vote, would allow cannabis companies to access needed banking services without financial institutions running afoul of the law.
If these bills are signed into law, they have the potential to spur significant societal change, including greater racial parity and positive changes in the business climate. More than at any other time in our nation’s history, support for cannabis-friendly legislation extends across the aisle, thanks at least in part to broad public acceptance and the need for states to fill their coffers with tax revenue.
Bolstering the business climate with medical cannabis and CPGs
I’m excited to see what the future holds for my fellow entrepreneurs. Cannabis and cannabinoids offer considerable potential for non-recreational use. There is a long list of health complaints that can benefit from cannabis and CBD extract products, such as insomnia, epilepsy, anxiety, and chronic pain.
The use of cannabinoids in CPGs promotes greater consumer safety, given their antibacterial properties. It will be exciting to see the results of cannabis research funded by acts like CAOA. Beyond these three bills–CAOA, MORE, and SAFE–other bills propose to facilitate cannabis research, such as the bipartisan Cannabidiol and Marijuana Research Expansion Act, which would reduce the red tape researchers must navigate.
For marginalized communities, legalization offers hope for social justice
Cannabis consumption rates are similar across racial groups. Yet, BIPOC communities are disproportionately subjected to significantly higher rates of marijuana-related arrests and convictions. This racial disparity has affected minority communities in both the U.S. and Canada, where my company is headquartered.
Throughout the U.S., BIPOC individuals are 3.6 times more likely to be arrested for a cannabis offense than white people. There are considerable fluctuations from one state to the next. In some places, Black people can be up to 50 times more likely than white people to be arrested. Consider New York City. In 2020 alone, 94 percent of cannabis-related arrests involved people of color.
Legalization is a pathway toward eliminating cannabis-related incarceration disparity and promoting social justice. Both MORE and CAOA would funnel tax dollars into programs that lift underserved communities disproportionately affected by cannabis prohibition.
In Canada, legalization has given a boost to social justice reforms, and to ending the cycle of poverty that affects youths caught up in the system. More work remains to be done, but Canada’s improvements offer promise for the U.S.
The financial incentives of legalizing marijuana
The numbers are compelling. In 2010, states spent an estimated $3.6 billion on cannabis law enforcement. Legalization would not only eliminate these enforcement costs but also create considerable revenue. In one decade, legal cannabis could generate an estimated $132 billion-plus in taxes and create one million-plus jobs.
These are the obvious financial incentives. Yet, it’s important to look beyond the obvious to consider how legalization can impact the business climate. In Canada, legalization has had the effect of driving companies to optimize their supply chain for other markets. The development of a skilled cannabis labor force enhances product R&D, and the need to establish quality standards has prompted consumer trust in conscientious brands. In short, regulatory changes fuel innovation and lead to a more robust business climate.
Broad support for legalization
Not everyone is supportive of legalization, of course, but by and large, the idea has been increasingly well-received. Legalization is embraced by Americans from both sides of the aisle, with more than two-thirds supporting it. Similarly, both Republican and Democrat elected officials have expressed their support.
In 2017, two Republicans (Dana Rohrabacher and Don Young) and two Democrats (Earl Blumenauer and Jared Polis) registered the Congressional Cannabis Caucus (CCC) with the goal of promoting policy reforms at the federal level that are aligned with state-level legislation. These reforms could affect banking and taxation regulations (the CCC supports the SAFE Act).
Both Democrats and Republicans have a history of promoting cannabis-friendly initiatives in Congress. In 2021, Rep. Nancy Mace (R-SC) introduced the first Republican-led bill to decriminalize and tax marijuana, and expunge criminal convictions. In 2014, Earl Blumenauer endorsed the Oregon Ballot Measure 91, which legalized recreational use.
Gary Chambers, Jr. (D), a Senate candidate from Louisiana, has gone further than most in attempting to not only legalize cannabis use but to normalize it (among adults). In a campaign video, he can be seen smoking a blunt while discussing statistics regarding disproportionate enforcement across racial groups.
A path forward
Legalization cannot create racial parity overnight. While eliminating disproportionate arrest rates is important, it’s also crucial to ensure that minorities have a pathway toward entrepreneurship.
As of 2017, 81 percent of cannabis business owners were white. New York is trying to level the playing field by requiring that half of its business licenses be offered to Social and Economic Equity Applicants. But to truly promote social justice, historically marginalized communities also need access to funding to have the opportunity to become green entrepreneurs.