The Cannabis Regulatory Reform Landscape Going into the Midterms

Every federal election this century has brought with it the possibility of cannabis reform. The November midterm elections look to be continuing this trend. In addition to several state-level cannabis legal reform measures, Senate Democrats introduced their long-awaited comprehensive cannabis reform bill last month, the first cannabis reform introduced by congressional leadership.

Unfortunately, federal reform appears unlikely to pass in the Senate. That includes the Secure and Fair Enforcement (SAFE) Banking Act, the Marijuana Opportunity Reinvestment and Expungement (MORE) Act and its newly-introduced Senate partner.

In this entry of the RADD CANN Compliance Blog, we’ll take a look at federal legislation running out of time, the legislation we’ll probably see introduced in the next Congress, and state-level initiatives that could go either way in November.

With elections in sight, pending federal legislation likely to lapse 

Though no bills enacting federal cannabis reform became law this Congress, several proposed bills– and the actions taken about them– are encouraging. The SAFE Banking Act and MORE Act both passed in the House with a wide margin. However, both have passed the House before, only to be tabled in the Senate. The first would protect financial institutions that deal with cannabis businesses, and the second is more comprehensive legalization and expungement bill.

There’s been some movement in the Senate.

Senator Cory Booker (D-NJ) introduced the Cannabis Administration and Opportunity (CAO) Act (S. 4591) on July 21. The bill was cosponsored by Senate Majority Leader Chuck Schumer (D-NY) and three other Democrat senators. The introduction of comprehensive federal cannabis reform by senate leadership is an important symbol.

The CAO Act is seen as a senate counterpart for the MORE Act. It was introduced after a well-publicized input period by the bill’s sponsors from cannabis stakeholders. While its introduction is a good sign; however, it’s unlikely to receive a hearing with only two months until an election and the need for bipartisan buy-in. 

What to Watch for in the Next Congress

The prospect of future cannabis legal reform depends much on which party controls the next congress.

It’s safe to say that the next congressional session will see the reintroduction of the SAFE Banking and MORE Acts, given their wide appeal in the House. Given the time, effort and public relations that went into the CAO Act this session, it’s also likely that we’ll see its return if Democrats retain control of the Senate. 

If the GOP controls the next senate, reform legislation faces a much tougher road.

A notable change in recent years has been focusing on social equity issues. These are likely to remain in any future reform efforts since there has been wide industry buy-in. One example is the effort for people from communities disproportionately impacted by the Drug War to have a real stake in the industry. Another is for old cannabis convictions to be automatically expunged from criminal records.

Cannabis Reform on the Ballot

While federal legislation faces an uphill battle, state-level action carries a higher chance of success in November. Cannabis reform being taken up at such a high level in Congress is an important move toward progress. Still, it’s the states that have been reforming their own cannabis laws since California legalized medical use in 1996, right up to New Jersey and New York passing adult-use laws two years ago.

In the November election, voters in six states– Arkansas, Maryland, Missouri, Oklahoma, North Dakota and South Dakota- will decide whether to legalize cannabis for adult use.

If you’re in the cannabis industry, you might want to wait until the dust settles after the election to plan for moves into newly legal states. Two states, Mississippi and South Dakota, voted to legalize cannabis in 2020, only to have their state governments reverse their wins. Mississippi has since passed legislation legalizing medical cannabis. South Dakota will vote again to tell Governor Kristi Noem that they want legal cannabis.

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