“I hope that a record number of states will legalize marijuana in 2021, in part due to financial pressures, along with the imperative of racial injustice to reduce unnecessary interactions between police and civilians,” said Karen O’Keefe, director of state policies for marijuana. Policy Project, the lobbying organization behind many current state cannabis policies.
In recent weeks, a series of US states. USA They have tried to relax decades-long drug laws that criminalized the use and possession of cannabis and disproportionately imprisoned black people for nonviolent crimes.
Decriminalization legislation It is also making progress in New Jersey. In Colorado, a bill aimed at diversifying the state’s legal cannabis industry was amended with a provision that would allow Democratic Governor Jared Polis will remove low-level cannabis convictions from residents.
Virginia’s new decriminalization law also includes provisions to create a task force to assess the potential impact of cannabis legalization.
In recent years, calls for stronger policies that address social justice and social equity concerns have grown by reducing the number of people incarcerated for nonviolent cannabis offenses, directing tax revenues to communities hurt by the policies of the War on Drugs and increase the number of minority business owners and employees.
“Equity is something that shouldn’t be an afterthought,” said Amber Littlejohn, senior policy adviser for the Minority Cannabis Business Association.
Even Kevin Sabet, co-founder of Smart Approaches to Marijuana, which opposes large-scale legalization of cannabis, told CNN Business that the organization supports recent efforts to decriminalize minor possession of cannabis.
“Decriminalization begins the process of healing past harm and at the same time forgoes the creation of a predatory new industry interested in marketing extremely powerful marijuana products,” he said by email.
Legalization on the ballot
Proponents of legalization have long touted the correction of criminal justice mistakes in the past, eliminating illegal market activity and generating additional tax revenue when they lobbied for review of state cannabis laws.
“At the end of the day, you talk about economics and jobs,” said Jessica Billingsley, CEO of Akerna, which makes regulatory compliance software that helps states track cannabis sales from seed to sale. “I really think we will see a very significant and important move out of this as states and governors look for a way to boost their economy.”
Cannabis sales in states that have legalized the plant for medical and recreational purposes totaled around $ 15 billion in 2019, and are expected to exceed $ 30 billion by 2024, according to data from BDS Analytics, which tracks sales. of dispensaries. In early 2020, the cannabis industry in the US USA It had an estimated 243,700 full-time employees, according to the cannabis information site Leafly.
More than half of the states of EE. USA They have current medical cannabis laws, and 11 of them allow recreation for adults. Those numbers, and the overall size of the industry, were expected to grow in 2020; However, efforts like those in New York have been crushed due to the coronavirus pandemic.
And while New York’s legalization efforts are temporarily shelved, residents of New Jersey and South Dakota are expected to vote on legalizing recreational cannabis in November. Mississippi is scheduled to vote on medical marijuana, and legalization campaigns are gathering and presenting signatures for medical measures in Montana and Nebraska and for recreational measures in Arizona.
A blessing from the recession?
The performance of the cannabis industry during the pandemic has given credit to a growing notion within the industry that cannabis can be recession-proof and could be a boon to beleaguered budgets.
Cannabis companies were considered essential in most states where the drug is legal. Despite the initial volatility of panic buying in mid-March and the subsequent short-term decline, sales have remained stable, if not robust. Sales increased 26% in Washington state and 46% in California, according to a June market report by analysts at Stifel, citing data from analyst firm Headset.
But cannabis legalization should not be seen as a panacea for state fiscal problems, policy experts and economists warn, adding that creating a strong, safe and sustainable industry takes time.
Faced with the economic crisis, municipalities and states are trying to be creative with revenue generation, imposing taxes on activities like sports betting and products like vaping devices, said Ulrik Boesen, senior policy analyst at the Fiscal Foundation. And while cannabis regulation could generate new revenue (estimates put the illicit market at $ 60 billion), the benefit to states won’t come immediately, said Boesen, author of a recently released white paper on recreational excise taxes. cannabis.
“This is not a short-term solution, because it takes time,” Boesen told CNN Business. “If you’re looking at a fiscal year 2021 that worries you, legalizing marijuana will not be a solution.”
The development and regulation of cannabis policy can be a delicate dance. Taxes need to be high enough to ensure adequate regulatory barriers and enforcement, but not too high to keep consumers in the illicit market, said Salmeron Barnes, managing director of MPG Consulting, which works with states and cities to develop cannabis regulatory regimes.
Earlier this year, Barnes raised the idea of creating municipal cannabis bonds to help cities generate additional income.