08 May Flurry of News on Federal Regulation of Cannabis

The last month or so has seen a dramatic series of steps which could eventually lead to the full legalization of cannabis at the US federal level. First, Senate Majority Leader Mitch McConnell introduced a bill to fully legalize industrial hemp, in part to help his farm state of Kentucky. Then, with a dramatic statement about social justice, Senate Minority Leader Chuck Schumer announced his plan to introduce a bill to decriminalize cannabis nationally.

More importantly than both of these, in mid-April Pres. Trump struck a deal with Sen. Cory Gardner (R-CO) to support “states’ rights” legislation. It’s not entirely clear what that bill will look like, but it appears it would be a permanent ban on federal enforcement against those complying with state cannabis laws. Gardner also has stated he would like his legislation to address thorny banking and tax issues that have plagued the rapidly growing industry. There is clearly growing bipartisan support for easing up on federal oversight of the states regarding cannabis.

Ironically, this all occurred as a result of Attorney General Jeff Sessions’ rescission of the Cole Memo, which had de-prioritized federal enforcement against state lawful actions. This upset Gardner enough to hold up the Administration’s judicial nominees until the issue was addressed. That led to Gardner’s deal with the President. Also ironically, not long ago Gardner also opposed legalization. Other long-time opponents of cannabis like Sen. Dianne Feinstein (D-CA) also have now come out in favor of legalization. NY Governor Andrew Cuomo, long an opponent of adult use (last year he called cannabis a gateway drug) has commissioned a task force to study legalization.

That said, some are scratching their heads following the Small Business Administration’s announcement that it will not loan money to cannabis related businesses. But at a cannabis conference I attended in Canada last week, there was cautious enthusiasm about the prospect of federal restrictions being reduced or eliminated. Some have suggested the President is more willing to support the industry since some of his allies have been investing in cannabis in recent years and that the industry includes an attractive real estate opportunity. Stay tuned!