Federal Legalization of Pot May Be Closer Than You Think (No, Really!)
Today’s marijuana legal reform movement is a broad church that includes everyone from aging hippies to free-market ideologues. In Congress, we’re seeing the emergence of a coalition of strange bedfellows that’s pushing for the legalization of pot. Next year could prove the long-anticipated inflection point.
The “Holy Grail” of marijuana legalization on the federal level continually seems within reach, only to prove elusive. However, odds are good that in 2024, Congress will pass some aspect of marijuana legal reform.
Hey, don’t roll your eyes. Yes, hopes have been raised and dashed before. But the political winds are increasingly strong…with the aroma of cannabis.
Many members of the GOP are coming around to the idea of marijuana normalization, as their constituents increasingly embrace the mainstreaming of marijuana and the substance continues to generate jobs and tax revenue. This shift in public perceptions is even occurring in “deep red” states.
As we face the cusp of a new year, now’s an opportune time to review major marijuana legal reform legislation that’s pending in Congress. Whenever restrictions on pot are lifted, money is made.
Where the factions intersect…
After a bitter battle over several candidates, the U.S. House of Representatives finally elected a new speaker: Mike Johnson (R-LA), an ultra-conservative Christian evangelical. Until his surprise election to lead the GOP in the House, Johnson was an obscure backbencher.
Internecine rivalries continue unabated in the House GOP, among several factions that include the far-right; mainstream business-oriented conservatives; establishmentarians; insurgents; MAGA loyalists; and libertarians. The GOP majority is razor thin and Republicans in districts won by President Biden in 2020 are skittish about hewing too far to the right.
The Democratic party is overwhelmingly pro-marijuana, in both the House and Senate. The GOP minority in the Senate has a sufficient number of weed adherents to get legislation through that Democratically controlled chamber. The major hurdle is the House.
The libertarian and Wall Street wings of the GOP in the House hold the key to getting marijuana reform legislation through Congress. Most of the libertarians are pro-legalization of pot. They’re already making common cause with the business/establishmentarian wings of the party. Think of these weed-friendly (yet ordinarily conservative) factions as overlapping circles in a Venn diagram.
Consider Rep. Matt Gaetz (R-FL), an ultra-conservative pro-Trump loyalist who spearheaded the successful efforts to oust Kevin McCarthy (R-CA) from the speaker’s chair.
Gaetz is a hardliner who supported the January 6 insurgency. And yet, incongruously, he has voted “yes” on every major piece of pro-marijuana legislation in the House. Gaetz also recently proposed an amendment that would end cannabis testing for members of the military, both when they’re enlisting and accepting a commission.
Politicians of all stripes can read public opinion polls. About nine-in-ten Americans say marijuana should be legal for medical or recreational use, according to a Pew Research Center survey (see chart).
Below is a quick review of pot legislation pending in Congress that’s likely to resurface in 2024:
- The MORE Act
The Marijuana Opportunity Reinvestment and Expungement (MORE) Act, H.R. 3617, proposes to lift the federal ban on marijuana. Introduced by Rep. Jerry Nadler (D-NY), the MORE Act seeks to remove marijuana from the Controlled Substances Act, expunge certain marijuana-related convictions, and reinvest in communities disproportionately affected by the War on Drugs. The bill also contains provisions to regulate and tax the industry.
The MORE Act has gained significant momentum and is considered one of the most comprehensive federal marijuana reform bills to date.
- The Cannabis Administration and Opportunity Act
The Cannabis Administration and Opportunity Act (CAOA) was introduced by Senators Chuck Schumer (D-NY), Ron Wyden (D-OR), and Cory Booker (D-NJ). This bill seeks to remove marijuana from the list of controlled substances, expunge certain convictions, and create a regulatory framework for the cannabis industry. It also includes provisions to reinvest in communities adversely impacted by the War on Drugs.
The CAOA aims to establish a federal regulatory framework while allowing individual states to regulate cannabis as they see fit. Proponents emphasize the need for federal guidelines to ensure safety, while opponents argue that states should have full autonomy in regulating cannabis.
- The Marijuana Freedom and Opportunity Act
The Marijuana Freedom and Opportunity Act, originally sponsored by Vice President Kamala Harris when she was a Democratic Senator from California, also aims to legalize marijuana at the federal level. This bill contains many of the same provisions as the MORE and CAOA bills, which has fueled speculation that these various bills might get wrapped-up in a single omnibus package.
This particular bill emphasizes racial equity and the importance of addressing the disproportionate impact of marijuana prohibition on communities of color.
- The SAFE and SAFER Banking Acts
The Secure and Fair Enforcement (SAFE) Banking Act, H.R. 1996, doesn’t directly address the legality of marijuana but aims to provide crucial financial services to the cannabis industry. It allows financial institutions to provide banking services to cannabis-related businesses without facing federal penalties.
Sen. Schumer last month filed in the Senate the Secure and Fair Enforcement Regulation (SAFER) Banking Act, an expanded version of the SAFE Act.
The lack of access to traditional banking services has been a significant challenge for the cannabis industry. Passage of either SAFE or SAFER would improve financial transparency, reduce crime against marijuana companies that are forced to operate on a cash basis, and enhance efficiency.
- The Veterans Medical Marijuana Safe Harbor Act
The Veterans Medical Marijuana Safe Harbor Act, H.R. 334, is designed to facilitate access to medical marijuana for military veterans. It allows veterans to discuss medical marijuana with their Department of Veterans Affairs (VA) health care providers and obtain recommendations in states where medical marijuana is legal.
This bill seeks to address the issue of veterans’ access to medical marijuana for conditions such as post-traumatic stress disorder (PTSD) and chronic pain.
- The Medical Cannabis Research Act
The Medical Cannabis Research Act, H.R. 3797, focuses on expanding medical marijuana research. It aims to streamline the research application process and encourage scientific investigations into the potential therapeutic benefits of cannabis. This legislation acknowledges the need for rigorous scientific study to determine the safety and efficacy of medical marijuana for various medical conditions.
It’s clear that change is on the horizon. As these bills work their way through Congress, profit-making opportunities abound.
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John Persinos is the chief investment strategist of Marijuana Profit Alert.