The state of cannabis in the United States — and the cannabis industry itself — has come a long way in the last 25 years.
What started with Californians voting to allow cannabis for medical purposes has now grown to such an extent that all 50 states have legalized cannabis or cannabis-derived products in one form or another.
Just in the past few months (as of the November 2020 election), Arizona, Montana, South Dakota, and New Jersey legalized recreational cannabis use completely. At the same time, Mississippi and South Dakota took the first steps toward full legalization by allowing their residents to consume cannabis for medical purposes.
The people’s opinion is clear: Remove cannabis from the list of controlled substances (such as alcohol and cigarettes) and decriminalize its use from sea to shining sea.
But, while cannabis is legal in a large portion of the United States at the state level, its use is still illegal everywhere according to the federal government. Is that going to change under a Biden presidency? Not likely.
The Current State Of Cannabis
As of this writing, all 50 states have addressed the use of cannabis and cannabis-derived products. Here’s how it breaks down state by state.
Legal Recreational And Medical Use
- South Dakota
- New Jersey
Legal Medical Use
- New Mexico
- North Dakota
- West Virginia
- New York
- Rhode Island
- New Hampshire
- South Carolina
- North Carolina
What Does 2021 Hold For The Cannabis Industry?
As mentioned at the beginning of this article, it is unlikely that President-Elect Biden will make cannabis completely legal in the United States in 2021.
In fact, the office of the president cannot magically wave its hand and make cannabis legal at the federal level. Doing so takes an act of Congress and would require removing cannabis/marijuana from the list of controlled substances (a.k.a. descheduling).
While that is the best option — and the one that all in the cannabis industry hope for — it’s not the only choice the federal government has in addressing the legality of cannabis in the United States.
Should the President Reschedule Cannabis?
Currently, the Controlled Substances Act (CSA) of 1970 classifies cannabis as a Schedule I drug along with Heroin, Ecstasy, PCP, LSD, Psilocybin, Mescaline, and Peyote.
Schedule I classification means that those substances have no defined medicinal purpose, have a lack of accepted safety under medical supervision, and have the highest potential for abuse.
The CSA also provides four other classifications for available drugs:
- Schedule II (High potential for abuse, accepted medical use in some circumstances): Cocaine, Morphine, Methamphetamine, Oxycodone, Fentanyl, Ritalin, and others
- Schedule III (Moderate to low abuse potential, currently accepted medical use, low to moderate potential for dependence): Codeine, Ketamine, Anabolic Steroids
- Schedule IV (Accepted medical use, low potential for abuse): Valium, Xanax, Klonopin, Ambien, and others
- Schedule V (Lowest potential for abuse, accepted medical use): Robitussin AC and others
When President-Elect Biden officially takes office in 2021, he could introduce legislation that instructs the Justice Department to reschedule cannabis as a Schedule III or Schedule IV substance.
That would make marijuana “less illegal” but might actually hurt the cannabis industry. It would allow those in the industry to claim certain business expenses on their taxes (making it easier for more small canna businesses to survive), but it would still prohibit those businesses from using banks.
In addition, rescheduling cannabis would actually destroy the industry’s existing business model (e.g., state-licensed non-FDA approved entities that sell cannabis to customers who are not medical patients) and continue the conflict between states and the federal government.
Can The President Reschedule Or Deschedule Cannabis?
The office of the president by itself cannot reschedule or deschedule cannabis. The president can initiate the process — get the ball rolling — by throwing his or her support behind the issue, but it ultimately comes down to what the members of Congress decide.
The president and Congress would all have to “vote yes” on either rescheduling or descheduling cannabis and, again, that is not likely to happen in 2021.
For one, there are more pressing issues to deal with — the COVID-19 pandemic and the economy, just to name a few. Additionally, Congress is still controlled by many of the same lawmakers who have consistently blocked cannabis legalization in the past.
The best the president can probably do is encourage more research, issue pardons or commutations for cannabis-related offenses, and instruct the Veterans Administration to ease up on restrictions for those seeking cannabis.
That’s not out of the question, but it probably won’t happen right away. So, what’s the outlook for cannabis in 2021? Business as usual.
Nothing much is likely to change at the federal level, but more states could take up the legalization issue on their own.
That is the best scenario for success anyway. The more states that decide to legalize both recreational and medical cannabis, the more Congress will see that it is, indeed, the will of the people. With enough pressure at the state and local levels, cannabis supporters can make their voices heard and move Congress to legalize cannabis at the federal level.
Is 2021 the Right Time to Invest in the Cannabis Industry?
Yes, is the short answer. The longer answer is that those investing in cannabis need to do so with a longer term view. The industry is doing well, but will still be hindered by regulatory challenges. However, we are seeing growth and innovation both domestically and globally so all signs point to cannabis being a healthy investment in the long run.
Serge Chistov is a cannabis industry expert and Chief Financial Partner with Honest Marijuana Co. Honest Marijuana is known for its organic approach to the growth, production, and packaging of cannabis, the first-ever organic hemp wrapped machine rolled blunts, the invention of the patented Nanobidiol Technology, and is the first company to bring THC-O-Acetate technology and products to market.