Cannabis Regulation 2.0

The Agriculture Improvement Act of 2018 (the “Farm Act”) sparked the proliferation of Intoxicating Hemp Derivatives throughout interstate commerce. Sales of these largely unregulated consumable products have swept the nation with sales revenue that rivals the combined revenue of all state-specific, regulated marijuana industries. Proponents of these mostly untested hemp-derived products see unburdened business opportunity. Opponents object to the perceived unfairness of these unregulated products in the face of marijuana’s continued federal illegality and strict state regulations. Against that backdrop, expected amendments to the Farm Act will likely address Intoxicating Hemp Derivatives, creating a moment of uncertainty for access to psychoactive cannabinoids, whether from hemp or marijuana. In this article, Benton Bodamer, DEPC adjunct professor of law, along with Benjamin Sobczak and Taylor MacDonald, explain the current state of affairs, discuss the possible implications of forthcoming federal policy decisions, and highlight the various interest groups lobbying for legislative action. Additionally, the authors argue that these new proposed regulations do not represent a solution to the federal government’s decades-old inability to safely and predictably allow access to the cannabis plant with reasonable and logical safeguards.

This paper, by DEPC Distinguished Cannabis Policy Practitioner and Founder and Director of Parabola Center Shaleen Title and coauthor Bruce Barcott, argues that small cannabis businesses foster local economic growth and contribute to the public good. Additional research is necessary, particularly to compare findings from states that are already taking measures to safeguard and financially support specific types of small businesses. In the interim, they recommend the exploration of immediate solutions, beginning with (1) access to SBA loans, (2) systematic data collection and potential expansion of state measures such as fee waivers and licensing prioritization, and (3) consideration of lower-cost regulations for small businesses. Various relevant federal bills are listed and briefly analyzed in the Appendix.

This paper, authored by Cat Packer, DEPC Distinguished Cannabis Policy Practitioner and Drug Policy Alliance Director of Drug Markets and Legal Regulation, reviews federal laws and approaches to cannabis banking, including the SAFE Banking Act of 2021 and notable changes in the SAFE Banking Act of 2023. Particular focus is placed on amendments seeking to promote banking that is fair. This analysis details how efforts to advocate for provisions promoting fairness in marijuana banking have led to minor but meaningful amendments to the SAFE Banking Act of 2023. It also identifies ongoing opportunities to ensure that banking is fair and accessible for all.

On August 30, 2023, the U.S. Department of Health and Human Services (HHS) concluded a scheduling review of psychoactive cannabis and recommended that the Drug Enforcement Administration “reschedule” psychoactive cannabis from Schedule I to Schedule III under the Controlled Substances Act. The next 6 to 12 months could be among the most transformative for the U.S. cannabis industry, but progress is unlikely to come without regulatory confusion, conflicts of federal laws, and unintended consequences. This paper, authored by Benton Bodamer, member at Dickinson Wright PLL and adjunct professor of law at the Drug Enforcement and Policy Center, aims to answer major questions that remain following the release of HHS’s statement, including why psychoactive cannabis was on Schedule I given its medical uses, whether a move to Schedule III effectively legalizes existing state-compliant cannabis companies, if relief from 280E tax or advertising restrictions are likely, and whether a move to Schedule III opens up banking for existing cannabis companies. The paper ends with a look at the road ahead.

This paper, authored by Cat Packer, DEPC Distinguished Cannabis Policy Practitioner and Drug Policy Alliance Director of Drug Markets and Legal Regulation, examines the Biden Administration’s executive orders on equity, its position on marijuana reform before and after President Biden’s related October 2022 statement, and it's repeated statements acknowledging both cannabis criminalization’s disproportionate impact on Black and Latino communities and marijuana reform as an opportunity to advance equity. Moreover, this paper critiques the omission of marijuana reform within the Biden Administration’s Equity Action Plans and highlights the opportunity for the Biden Administration to use its existing executive orders on equity as a framework to understand and address how marijuana laws and policies create barriers for underserved communities through the development of an equity action plan for marijuana reform.

This paper from DEPC Distinguished Cannabis Policy Practitioner in Residence Shaleen Title and coauthors focuses on a key challenge of creating a legal, sensible cannabis industry from the ground up: how the federal government should rectify the ongoing conflict between state and federal law by regulating the interstate commerce of cannabis. This paper presents different perspectives on how the federal government should respond. The authors agree that federal legalization is perhaps inevitable. They also agree that the current patchwork of state legalization isn’t tenable. Some disagree on nuances and what mechanisms should be tweaked to ensure that the industry is built in a way that’s both fair and competitive for everyone.

This paper from DEPC Distinguished Cannabis Policy Practitioners in Residence Shaleen Title and Cat Packer, along with fellow coauthors and members of the Cannabis Regulators of Color Coalition, addresses the Safe and Fair Enforcement ('SAFE') Banking Act. According to its sponsors and supporters, the SAFE Banking Act would help address the challenges faced by small cannabis businesses that cannot currently access banking services or loans. With cannabis social equity programs ramping up across the nation but their participants lacking capital, a bill to solve that problem would be a well-timed blessing. But unfortunately, SAFE, as written, is unlikely to result in equitable access to financial services. This paper summarizes the bill, analyzes why it would fall short of its purported goals, and makes recommendations to improve the bill.

This paper from DEPC Distinguished Cannabis Policy Practitioner in Residence Shaleen Title argues for intentionally applying well-developed antitrust principles to federal cannabis reform now, before monopolization of the market takes place, and offers eight concrete policy recommendations. While states are making historic progress creating paths for small businesses and disenfranchised groups, larger companies are expanding, consolidating, and lobbying for licensing rules to create or maintain oligopolies. Federal legalization will only accelerate the power grab already happening with new, larger conglomerates openly expressing interest. Left unchecked, this scramble for market share threatens to undermine public health and safety and undo bold state-level efforts to build an equitable cannabis marketplace.

This paper from DEPC Distinguished Cannabis Policy Practitioner in Residence Shaleen Title is designed to equip readers with practical advice about how to implement social equity. Included are three large policy areas regulators have to address as they begin to design a comprehensive social equity policy for their state’s cannabis industry: policies around what makes an individual or an entity a social equity applicant, policies around what benefits a social equity applicant should have access to, and licensing policies that will support your community’s social equity goals.