Dec 9, 2020

21st Century Gold Rush: Cannabis Volume V - 2020 Election Effect

By Jennifer E. Adams and Barbara B. Ormsby 

As we near the end of the year, and thus the end of the (seemingly never-ending) 2020 election cycle, it is important to highlight some possible changes for the Cannabis industry with the incoming Biden-Harris administration.  A late 2019 Gallup poll found that 76 percent of Democratic voters favor cannabis legalization, while 68 percent of independent voters and 51 percent of Republican voters do as well. Public support for legalization of cannabis appears close to reaching a critical mass that may allow a future administration to institute regulatory reforms that provide a boost to industry growth moving forward.[1]  There are several ways that the industry could see real change:  decriminalization, regulation at the UDSA level, and legislation related to banking issues. 

Notably, on December 4, 2020, the U.S. House of Representatives passed a largely bipartisan bill to decriminalize marijuana 228-164.[2]  The legislation intends to give states power and incentives to enact their own reforms, and its passage came as states around the county, including some conservative-leaning ones, have become increasingly open to decriminalizing marijuana amid a growing consensus that the war on drugs has been destructive.[3] Fifteen states have legalized recreational cannabis, and voters in five states last month voted on legalization issues, bringing the number of states where medical marijuana is legal to 35.[4]

For supporters of industrial hemp and cannabis, they could see great growth under the new administration due to support of regulations which may ease some of the financial hardships that currently exist. There has been bipartisan support for hemp farming, but recreational cannabis has been less embraced.  Biden’s pick for Agricultural Secretary could be very pivotal in the future of hemp crops.  Industry leaders are bullish.  “Once the President-Elect Biden is in office, I believe the hemp industry will see major policies implemented favoring our industry and the timing couldn’t be better as we rev up to launch one of our most aggressive marketing campaigns to date. Our goal has always been to produce top-of-the-line CBD and CBG smokable products and CBD consumption options that fit consumer lifestyles and deliver unparalleled results so we’re definitely excited for what’s to come,” says Bruce Perlowin, CEO of Hemp, Inc.[5]

As a reminder, recreational cannabis is still a schedule I controlled substance, and therefore illegal under federal law.  Because of that, cannabis businesses are not allowed the benefits of traditional banking services.  The SAFE Banking Act, HR 1595, passed the House on September 26, 2019 and was referred to the Senate for further action.[6] Though the Senate has not yet taken up the measure, it may still do so before the end of this Congress.[7] Otherwise, the bill will likely be reintroduced in the next Congress, which begins in early 2021.[8]

If the House bill survives a vote in the Senate, then that would be a signal that the Senate may consider taking up the SAFE act.  That legislation would be revolutionary to the Cannabis industry.  And it makes the Senate race in Georgia in January all the more interesting.  

[1] “The 2020 Election’s Impact on CBD and Cannabis,” November 3, 2020.  By Wilson Sonsini.

[2] “House Passes Landmark Bill Decriminalizing Marijuana, “December 4, 2020. by Cate Edmondson The New York Times. 

[3] Id.

[4] Id.

[5] Id.

[6] Id.

[7] Id.

[8] Id.