Despite the steep headwinds facing the cannabis industry and the high priority on getting COVID-19-related legislation passed, federal cannabis reform efforts are in a better position than they’ve ever been, according to Rep. Earl Blumenauer, D-OR.
“We have our work cut out for us but we have more momentum in the cannabis space than I’ve seen in the over 30 years I’ve been working on this issue,” Blumenauer said during a livestream discussion with this reporter. “We are in a stronger position than we’ve ever been. The performance of advocates and the industry is very, very strong and most important, people want this. It’s not just public support at the polls. People depend on the product, on the service, on the impact it has in their communities and so it’s a terrific alignment of interests.”
Blumenauer, the keynote speaker at NJ Cannabis Insider and Advance 360’s webinar “Cannabis and COVID-19: Where Does America Go From Here?” presented by Duane Morris on Wednesday, said a significant piece of cannabis reform aimed at loosening federal restrictions barring banks from providing services to cannabis businesses may even have a chance of passing in the House of Representatives on Friday.
“It’s interesting to note that now a number of Republican senators find themselves in competitive reelection campaigns this fall, people that they thought were safe,” said the Oregon Democrat. “So these are races where people are looking over their shoulder a little bit. State legal cannabis has proven to be an area where you can get bipartisan support. It’ll motivate voters. It’s a policy that people believe in. And if we can break some of these pieces of legislation through, they will pass the House, and I think set the stage for some action in the Senate.”
Still, it will be a challenge as COVID-related legislation has taken priority, according to Karen O’Keefe, director of state policies for Marijuana Policy Project.
“We already have 11 states that have legalized marijuana, one of which doesn’t have a regulated market, and 33 medical marijuana states when we were moving into 2020,” O’Keefe said during webcast. “We thought it would be a record year that we’d have more both legalization states and total medical marijuana states than ever before. That, of course, has slowed down. We saw a lot of legislative sessions ground to a halt and start working only on COVID.”
Federal stimulus aid reached hemp farmers and businesses through the Small Business Administration and the U.S. Department of Agriculture, Joy Beckerman of Hemp Ace International said.
That’s good news for an industry that should be faring much better than it is, she said. All but two states (New Hampshire and Mississippi) have legalized hemp farming and production and the 2018 Farm Bill — which removed hemp from the Controlled Substances Act — should have unleashed unbridled growth. But the U.S. Food and Drug Administration has done little to regulate the burgeoning CBD market.
Proposed legislation in California that would allow hemp extract to be sold outside of a dispensary is stalled by the public health emergency, said Beckerman, who is based in Seattle.
“Unfortunately, yesterday we just realized it’s not going to (move forward) because of obviously other priorities,” Beckerman said. Regardless, she said, there is opportunity for every single state, “they just need to invest in what they want to encourage.”
In addition to Blumenauer’s keynote, industry and advocacy panelists — including two representing the largest cannabis operators in the country — weighed in from their home offices on how the lack of access to capital, strict regulation, the state of social justice reform and federal prohibition continue to shape the cannabis industry as a whole.
“There’s not a lot of investors out there who are comfortable making investments at the moment,” said Paul Josephson, an attorney at Duane Morris, which represents several dispensaries across the country. “So it’s a challenging environment at the moment for operators, especially those who are still building out the infrastructure that they’ve committed to the states. That all being said, there is opportunity out there.”
While there have been significant gains for state -regulated markets, the illicit market continues to prove resilient due to the lower costs for consumers and wider array of products and services. Legalization, the panelists contend, would help deter it.
“If the economics don’t work out, then there will always be a reason for an illicit market to exist and it may take a lot of years for that to work itself out,” said Katie Neer, director of government affairs for Acreage Holdings, which operates in 20 states. “For those of us working in the industry, we’ve all known that the public support ending prohibition and legalization. This has shown us that the regulators and state administrators and lawmakers are starting to agree and recognize us as a legitimate industry.”
Chris Melillo, senior vice president of retail operations for Massachusetts-based Curaleaf, said safety was the biggest selling point for bringing patients and consumers into the regulated market.
“Really, it’s about educating the states on the safety aspects of a regulated market versus buying on the illicit market,” Melillo said. “You look at Acreage and clearly if we’re hosting a call together, we’re not against each other. We’re in this together. That is really the opportunity. There’s plenty of room for all of us here in this new market space; but it’s really about promoting safety and what the benefits are in a regulated market.”
It’s not only patients and consumers who’ll need to be brought into the regulated space, said Imani Dawson, director of communications of Minorities for Medical Marijuana.
“For me, ideally, a company that’s really invested in community reinvestment and wants to embody true corporate responsibility will be — in addition to offering education providing training, supporting, particularly micro entrepreneurship in the community — advocating for ways to integrate people from the legacy market into the space,” she said.
Access to capital, however, is still a must when it comes to being competitive — no matter who you are. Private capital is one avenue, but there’s a role for state governments as well, said Massachusetts Cannabis Control Commission chairman Steven Hoffman.
“I want to just emphasize I believe that private capital is absolutely an important part of the solution here, but I actually think it’s got to be a team effort,” Hoffman said. “So I think it’s got to be private capital. I think it’s got to be state money, where we take an excise tax and, and put it into a fund (for equity applicants).”
NJ Cannabis Insider is a weekly subscriber-based trade journal produced NJ Advance Media, which has also produced several live events in the past two years. For this event, it partnered with Advance Local sister media groups across the country, including Staten Island Advance, Advance Media New York, PennLive, LehighValleyLive, MassLive, MLive, Advance Ohio and Oregonian Media Group.
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