?Who knows what they?re going to do??: US cannabis industry braces itself for Trump administration
For those awaiting the end of cannabis prohibition in the US, 2024 began on a hopeful note, but as the year comes to a close, many of those hopes remain unfulfilled.
?The big issue is rescheduling, and there was a lot of excitement about that, but it?s been sort of mired down,? said Alex Halperin, who has covered the cannabis industry in his newsletter WeedWeek since 2015. Rescheduling would mean that cannabis is no longer federally banned under the Controlled Substances Act.
Joe Biden has been promising to reform federal cannabis law since his 2020 campaign, and rescheduling seemed like the most significant step the president was likely to take. But recent developments mean it won?t happen during his administration, if at all.
?Now, of course, we have the new administration, and who knows what they?re going to do?? Halperin said.
The Department of Health and Human Services (HHS) released a scientific review in January recommending that cannabis be reclassified from a Schedule I substance to a Schedule III substance, which would make cannabis-derived drugs eligible for FDA approval. On HHS?s recommendation, the Drug Enforcement Administration (DEA) proposed a new rule to reclassify cannabis, and invited the public to comment in May. More than 40,000 people commented, and 69% of commenters supported federal decriminalization or legalization of cannabis.
But the process has stalled. A month after the public comment period closed, the DEA announced it would hold a hearing in December ? an optional step that would lengthen the rescheduling process. Since then, the DEA made the December hearing preliminary, and delayed the official hearing until next year.
?The DEA is remarkably resistant to political pressure,? said Paul Dunford of the cannabis financial services firm Green Check, ?I?m not 100% convinced that they?re going to push rescheduling forward. They?re taking their sweet time.?
This year?s election cycle was similarly a source of both hope and frustration for cannabis advocates, as it was the first time both Democratic and Republican presidential candidates expressed support for cannabis reform.
Kamala Harris ?was pushing hard towards the end of full federal legalization?, said Jordan Tritt of the Panther Group, a cannabis investment firm. Trump also came out in support of a Florida ballot initiative that would have legalized recreational cannabis.
?It seemed like we were in as good a spot as we could be in terms of what the candidates were saying,? Tritt added.
Yet nothing concrete has come of that support.
Voters in Florida and South Dakota rejected ballot initiatives to legalize recreational cannabis, making 2024 the first year since 2017 in which no new states did so. Only one state, Nebraska, authorized medical cannabis for the first time.
Halperin notes that it?s unpredictable what a second Trump administration will do on the federal level.
?Trump certainly seems more open to reform than he has been in the past, and certainly than other Republicans have been in the past, but at the same time, his commitment to this issue isn?t necessarily well established, and the strongest resistance to reform comes from elected Republicans in Washington,? Halperin explained, adding that Republican voters no longer necessarily share this resistance.
A Pew poll from this spring found that more than half of Republicans under 49 favor both recreational and medical cannabis legalization.
Despite political disappointments, elements of the cannabis industry have continued to expand in 2024. While no new states authorized recreational cannabis this year, Ohio and Delaware granted their first licenses to recreational dispensaries, after legalizing them in 2023. Cannabis consumption lounges are also getting the legal green light in more parts of the country.
And with the expanding industry comes rising concerns about the safety of cannabis products. Halperin and the Los Angeles Times reporter Paige St John wrote an expos? over the summer revealing that many cannabis products in regulated California dispensaries contained alarming levels of pesticides.
?It certainly raised the issue to the fore,? said Halperin, adding that he saw a number of related stories about contaminated cannabis products come out on the heels of the LA Times expos?. Some of those stories singled out the legal hemp industry, which is separate, and less regulated, than the recreational cannabis industry.
Hemp products drew new levels of attention and concern last year due to reports of contaminated and mislabelled products and that products can often be bought in gas stations or grocery stores without any age restrictions. In September, California?s governor, Gavin Newsom, issued an emergency ban on all intoxicating hemp products, though it has not been consistently enforced. The New Jersey legislature passed a law in October that requires businesses to obtain licenses to sell intoxicating hemp products, though a judge quickly upheld a legal challenge to it, and agreed that the law violated a New Jersey clause forbidding excessive burdens on interstate commerce. The state has thus put enforcement on hold.
A number of reforms that would put guardrails on the legal hemp market, including the next Farm Bill, have stalled in federal and state legislatures. The Safe Banking Act and the newer Safer Banking Act, which would allow cannabis businesses to access financial services, have also continued to stall in Congress this year.
?Whether there?s going to be more movement,? Halperin said, ?or just ongoing limbo for 10 years now, is really unclear.?
