The full-scale legalization of cannabis in America feels like it’s closer than ever: More states have passed recreational-use laws; comprehensive legislation is gaining attention — and votes — in Congress; and the industry continues to steamroll to maturity with a stream of mega-mergers, high value investments and steady sales.
“The fact that the House of Representatives has passed [the Marijuana Opportunity Reinvestment and Expungement Act] in two successive sessions of Congress really is a sign that the end of federal prohibition is drawing near,” said Steven Hawkins, president and chief executive officer of the US Cannabis Council, a trade and lobbying organization.
“In terms of passage of either [bill]it’s still a tough path ahead in the Senate,” Hawkins said. “But we’re not ruling anything out.”
A $27 billion industry
The cannabis industry reeled in an estimated $27 billion in sales in 2021, up 35% from 2020, according to data released earlier this month by MJBiz, a cannabis trade publication and events organizer. And in the next five years, it projects sales will nearly double.
“Right now, over 425,000 jobs in the economy are tied to the cannabis industry. With that, we see the continued increase for public support for legalization,” Hawkins said. “And we continue to see both red and blue states pass laws to legalize cannabis for either adult or medical use.”
As more states allow for cannabis sales, companies within the budding industry aren’t waiting for federal law changes to stake their claim.
“It sets us up very well if federal change happens any time soon,” Cresco CEO Charlie Batchell told CNN Business in an interview.
Other paths to legal reform
The SAFE Act bill is gaining momentum in Congress and is now in a good position to become law, Hawkins said.
But all these piecemeal approaches to legalization could end up backfiring, said South Carolina Republican Representative Nancy Mace.
Mace last year introduced the States Reform Act, a bill that seeks to decriminalize cannabis, have it federally regulated like alcohol, impose a 3% excise tax, let states determine their own approaches and programs toward cannabis, and open up the doors to banking.
“It’s bad enough you get a multibillion-dollar industry operating in cash. That’s dangerous,” she said.
Bills that approach a singular issue like banking or research risk not passing muster in court, she said.
“That’s my fear. One, we do it right, constitutionally,” she said. “And, two, if we do a small piece of it, we’re not going to touch it for 20 years.”
An equitable industry
Policymakers and industry members also should not lose sight of how individuals, especially people of color, continue to be criminalized for activities that are now legal at the state level, said Amber Littlejohn, CEO of the Minority Cannabis Business Association.
“First and foremost, we need to get people out of prison, and we need to stop arresting people for doing things that folks are making lots of money doing,” she said.
People of color also face tremendous barriers operating within the industry. Attempts have been made to create paths into the industry for those with non-violent marijuana convictions whose communities were negatively impacted from the War on Drugs. But these efforts have been largely unsuccessful due to of state policies that limit licenses, fail to offer financial and business resources to people of color and that benefit deeper-pocketed multistate operators, Littlejohn said.
“I think one of the biggest problems is there seems to be an incredible disconnect between what people say they support and believe in and what [becomes law],” she said. “It’s up to us, the collective us, to be holding folks accountable.”
Cannabis in the Land of Enchantment
In New Mexico, the cannabis industry could generate more than $300 million annually in sales and $50 million in tax revenue over the next 12 months, as well as create 11,000 new jobs within the state in the next five years, according to Gov. Michelle Lujan Grisham’s office.
Parin Kumar, CEO and co-owner of the newly opened Vana Society cannabis store in Clovis, on the state’s eastern border, said she has been seeing a steady stream of customers.
For small towns like Clovis that have been looking to diversify their economy, the burgeoning industry is a boon, expected to bring new jobs and tax revenue.
“Especially in communities like Clovis, the buildings, the infrastructure, the school need help, this definitely can do a lot for the community economically,” Kumar said. “It feels like we’re giving back.”