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As new states implement the legalization of adult-use cannabis and federal agencies continue to consider sweeping changes to the Controlled Substances Act, 2023 is shaping up to be another important year for the cannabis industry. As 2023 approaches, it is worth taking a look at key events and lessons learned to anticipate what the future holds for the cannabis industry for 2024 and beyond.
At the federal level, the Biden administration took steps to loosen restrictions on cannabis last year, following the president’s request to launch a government-wide review process on the issue.
In a letter to the Drug Enforcement Agency (DEA) in August, a top official at the Department of Health and Human Services (HHS) suggested easing regulations on cannabis, moving the drug from Schedule I to Schedule III under the Controlled Substances Act. Recommended. Among other characteristics, Schedule III drugs are classified as having “moderate to low potential for physical and psychological dependence”. HHS noted that their recommendation stemmed from the Food and Drug Administration’s own review.
The DEA is still conducting its final review, with a decision expected next year. If the rescheduling takes place, it would be the most significant change to federal cannabis law in half a century. Redistricting could open the door to more tax breaks for cannabis businesses and increased research on the health effects of cannabis. Although Congress failed to pass meaningful legislation on cannabis this year, momentum is building behind several bipartisan bills.
Most notably, the SAFER Banking Act passed the Senate Banking Committee in September, receiving votes from both parties. The bill was originally introduced more than a decade ago and has passed the House several times. If signed into law, the SAFER Banking Act would provide protections to financial institutions that provide services such as bank accounts and loans to state-approved cannabis businesses. Under the status quo, many licensed cannabis businesses have been forced to operate cash-only, leading to break-ins and robberies.
Meanwhile, additional states are slowly adopting cannabis legalization following recent ballot measures and legislative initiatives.
More than half of Americans now live in states where cannabis possession is legal. Maryland and Missouri both followed voters’ wishes and implemented statewide amendments voted on last year to expand adult-use cannabis. In April, the Delaware legislature also approved adult-use legalization, allowing Governor John Carney (D) for the bill to become law without his signature. The only exception this year is Oklahoma, where voters overwhelmingly rejected legalizing adult-use cannabis in March.
Perhaps the most tremendous growth has come from the Buckeye State. In November, Ohio voters decided to legalize cannabis and became the 24th state to approve its adult use. This is notable because Ohio recently rejected a similar ballot measure in 2015.
Furthermore, opinion polls show that Americans are increasingly receptive to cannabis legalization – and are using it more. A Gallup poll in October showed that seven in ten Americans support legalizing cannabis. When the survey was first conducted in 1969, only 12 percent said the same. Additionally, according to a recent SAMHSA study, more than 40 million adults reported using cannabis in the past month.
Internationally, European countries are also getting closer to legalizing cannabis. Germany could soon become the largest EU country to decriminalize cannabis for adults, with a Bundestag vote expected as early as this December. Commercialization of cannabis businesses is expected to happen in two phases, with non-profit social clubs getting approval as early as next year and a more comprehensive tax and regulation framework coming later in 2024. Similarly, the Netherlands announced plans to begin a pilot program testing in December. Exclude legal sales of cannabis.
In another win for the cannabis industry this year, X (formerly Twitter) became the first major social media platform to allow cannabis ads, giving industry advertisers access to a broader audience. However, the policy change came with several restrictions. Requirements include being licensed by “appropriate authorities” and not targeting those under the age of 21.
Looking ahead to 2024, the upcoming election season offers a new opportunity for voters to change the policy landscape for the cannabis industry. There is already talk about Florida – our nation’s third most populous state – holding its own cannabis ballot measure. With the presidential election approaching, candidates may also be making new promises regarding adult-use legalization. If 2023 is any indication, a year is plenty of time for major policy changes.
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