With the departure of Jeff Sessions as U.S. Attorney General and the president signing the Farm Bill into law last week, the future of the federal approach to state legal marijuana will re-emerge as an issue.
Attorney General Sessions was the most vocal anti-marijuana member of the Trump Administration and the most significant reason for any lack of true consideration of federal legalization.
The Farm Bill will lead the way for the federal legalization of hemp and derivative products. Currently, the Controlled Substances Act does not distinguish between marijuana and hemp, although states treat and regulate them very differently.
In short, marijuana has THC, which is what gets you high, while hemp has CBD, which doesn’t. CBD as a wellness product is one of the fastest growing trends in the industry.
In 2019, the U.S. Department of Agriculture, Drug Enforcement Agency and Food and Drug Administration will go through rulemaking, effectively legalizing hemp and the CBD oil extracted from hemp.
This will create a boom in both hemp-textile and medical/supplement hemp industries. All this could happen in advance of the 2020 presidential election, and it would push federal marijuana legalization as a significant topic.
Be careful what you wish for, however, as marijuana legalization may not be the dream scenario many people envision.
Federal marijuana legalization could come in two basic forms: Rescheduling and De-scheduling. Rescheduling would be changing it from a Schedule 1 narcotic under the Controlled Substances Act, completely illegal, to Schedule 2 or 3, making it available through a prescription.
Medical legalization, however, would come with some awkwardness. First, it wouldn’t be available in the forms current marijuana consumers are used to — no smokable joints or pot chocolates, just traditional medicinal forms, such as pills, oils or topical ointments.
It would therefore miss the overwhelming majority of today’s marijuana consumer market. Second, it wouldn’t happen overnight. Normal FDA approval for medicine takes five-12 years of clinical testing. Third, state and local jurisdictions would lose the tax revenues they’ve become addicted to, as medicine is not taxable.
The potential budget implications would create political opposition across the country. Finally, big pharmaceutical companies would likely take over nearly all of the medical market, devastating the existing industry. Now spread among a majority of states, the new industry would concentrate in existing pharmaceutical states.
De-scheduling would remove marijuana from the Controlled Substances Act and regulate it separately, like recreational alcohol.
This, too, faces hurdles. Many states would oppose the legalization of recreational marijuana for the same reasons they have not enacted state legalization.
Big Tobacco would likely take over the lion’s share of the market and undermine the existing state legal recreational businesses. While distribution points would remain local, marijuana cultivation and product manufacturing and all the related jobs, would be concentrated in tobacco states, again destroying existing businesses and tax sources.
Facing these hurdles, the solution is a hybrid system with limited medical marijuana available through physician-issued prescriptions to those truly in need.
Separately, the federal government could allow an opt-in recreational system, which protects existing state industries. The federal government would play a key role in creating uniform systems for testing, potency, portion size, tracking, packaging, labeling, consumer protection and enforcement.
A similar structure already exists for alcohol. The 21st Amendment to the U.S. Constitution rescinded Prohibition, but it left primary regulation to the states. We still have appropriate national uniformity, such as 12-ounce beer bottles in every jurisdiction.
The marijuana legalization conversation is coming. Let’s have it with a real understanding of what it may mean and create a path for long-term success.
Tom Downey is a regulatory attorney at Ireland Stapleton Pryor & Pascoe, former Assistant Colorado Attorney General and former Director of Licensing for Denver. The opinions expressed here are the author’s own and do not necessarily reflect the views of Ireland Stapleton Pryor & Pascoe, PC.
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