Marijuana use is fast becoming legal in the United States as well as worldwide. In 2020, global cannabis sales are predicted to rise from $13.4 billion to $33.6 billion. However, despite the fact that marijuana is still classified as a Schedule I substance under federal law, the legal marijuana business in the United States generated $13.6 billion dollars in revenue in 2019 and employed 340,000 people.
Along with forecasts and data, it’s important to understand the potential roadblocks that cannabis may encounter in the years ahead. Let’s find out here.
Cannabis Policy Reform
Marijuana policy reform proponents are optimistic that legislation will be passed on the federal level soon because the Democrats control both the House and the Senate as well as the presidency. There are 296 members of Congress (68%) who represent the 33 states that have legalized medicinal marijuana in 2019, according to Politico. There are already a number of marijuana-related measures in the incoming Congress.
According to Viridian Capital Advisors, cannabis firms raised $116.8 billion in 2019. Despite this, banking reform in the United States is critical to the industry’s long-term viability. In order to avoid money laundering penalties, big banks are now reluctant to cooperate with these companies.
Cash-based businesses face a slew of dangers and inconveniences in addition to the difficulties they have in raising financing. A plan known as the SAFE Banking Act, sponsored by the American Bankers Association, would provide greater legal certainty by bridging the gap between federal and state laws.
William Barr, the former U.S. attorney general, said he will not pursue marijuana businesses in places where the plant is legal. As a result of this “untenable” disparity, he called for it to be bridged. Federal legislation prohibiting the sale and use of marijuana is something he favors.
Biden wants marijuana to be decriminalized and the criminal records of anyone convicted of possessing the substance to be deleted, according to the president. On the other hand, Vice President Kamala Harris was one of the co-sponsors of Senator Cory Booker’s Marijuana Justice Act, which decriminalizes marijuana.
Harris is in favor of expunging marijuana convictions and wants to see the drug decriminalized and legalized.
FDA Stance About CBD
All medications containing CBD, a Schedule I chemical, must be approved by the FDA under existing regulations. For the first time, the FDA authorized a CBD-derived medicine in June 2018.
Drug Enforcement Administration (DEA) has classified GW Pharmaceuticals (GWPH) Epidiolex under Schedule V of the Controlled Substances Act, which implies it has minimal potential for abuse.
The Food and Drug Administration (FDA) has said that it is prohibited to promote food items or dietary supplements that contain CBD, although that might change in the future. It stated this in a December 2018 news release: “A food or dietary supplement that contains a pharmaceutical component is typically barred from entering interstate commerce, but the FDA has the ability to adopt a rule to enable the use of such an ingredient. We’re re-examining our options to see whether this is something we want to pursue.”
Hemp, another source of CBD, was legalized under the Farm Bill, which was signed into law shortly before the statement was released. This is fantastic news for the numerous businesses that have placed their bets on the property and dealt with the ambiguity surrounding its legal status.
Can investors, on the other hand, anticipate that all CBD will be moved to Schedule V or removed completely in the near future? No, that’s not exactly right. Because of international accords signed by the United States, it is difficult for CBD to be removed from the Controlled Substances Act totally. Only FDA-approved marijuana-derived medications with low THC levels may expect to join Epidiolex in Schedule V.
The Cannabis Market in the United States
There is still a lot of confusion in the U.S. market for cannabis businesses and investors. Only 18 states out of the 50 will have approved recreational marijuana usage by December 2021.
However, according to a study done by the Pew Research Center in April of 2019, the majority of Americans believe that marijuana should be legal for recreational or medical usage. 60% of people say marijuana should be allowed for both recreational and medical use, while just 31% think it should be permitted exclusively for medical use.
The campaign to have marijuana legalized at the federal level began earlier this year. Unions, personal-use proponents, and social-justice campaigners have joined forces to lobby for the federal legalization of marijuana.
Senate Majority Leader Chuck Schumer, Finance Committee Chairman Ron Wyden, and New Jersey Senator Cory Booker released a discussion draft of a federal cannabis legalization bill in July 2021. The Cannabis Administration and Opportunity Act is a measure that would decriminalize the possession of up to 10 ounces of marijuana by adults.
In addition, the plan would eliminate non-violent marijuana charges, boost medicinal research, and provide basic financial services, including bank accounts and loans, to cannabis enterprises.
Nancy Mace of South Carolina, a Republican member of the House of Representatives, submitted legislation in November 2021 that would legalize marijuana at the federal level.
Also known as the States Reform Act, the measure removes legal hurdles encountered by cannabis-related enterprises and regulates the usage of cannabis in the same manner as alcohol use. In a number of major ways, the bill varies from the Democratic draft plan published in July.
However, despite the rise of the cannabis sector and the acceptance of its usage in society, considerable obstacles remain. In 2022, investors and cannabis entrepreneurs may expect a turbulent and fast-changing environment as a result of these tendencies.
A major problem for investors will be selecting which of the countless new and existing cannabis businesses will be able to weather this turbulence.