CANNABIS CULTURE – “In reality, who won big on election night? Definitely cannabis,” according to Partner and Chair of the cannabis practice at Greenspoon Marder Law Firm, Rachel K Gillette. “Cannabis is an issue that unites all political persuasions.”
Recreational marijuana was legalized in Arizona, South Dakota, Montana, and New Jersey; and medical marijuana was legalized in Mississippi. With the exception of New Jersey, these are all traditionally conservative states when it comes to weed, with past resolutions failing.
While people and politicians have differences on how cannabis laws should be handled, the general consensus is evolving. And the tumult of 2020 has, without question, played a role in swaying voter opinions.
Lobbyists embraced the notion of criminal justice reform in a year when it is on the forefront of the American conscience; new forms of tax revenue are a welcome relief for state economies that have been ravaged by COVID-19; and the end of prohibition means people can freely destress during one of the most stressful times in US history.
Regarding inevitable Federal reform, Gillette predicted that “By the end of the next President Elect’s term, we will have some sort of regulatory framework.” She is hopeful that Federal legislators will work with the states to integrate the already robust sets of policies that are currently in place. “The one thing I want to ensure, is that the Federal Government should not interfere with the success of the regulatory environments of the states already in order.”
Gillette is also confident that corporations will address the issue of social equity in the cannabis industry as they have more freedom to grow and cultivate a legitimate industry. “If you talk to 10 CEOs of some of the largest cannabis companies in the nation, they will tell you that criminal justice reform is one of the most important issues.”
While it remains to be seen if larger companies will make space to foster relationships with communities and individuals disproportionately impacted by unfair criminalization, Gillette pointed to all the major organizations working at the State and Federal levels to create a fair and equitable environment in which everyone has a seat at the table, including the National Cannabis Roundtable, the National Cannabis Industry Association, the Minority Cannabis Business Association, and the National Organization for the Reform of Marijuana Laws.
Arizona’s Proposition 207 is the most comprehensive out of all the marijuana legalization measures in this election cycle. Not only does it legalize possession and lay the groundwork for the Arizona Department of Health Services to regulate the industry, it also addresses equity and criminal reform.
The Social Equity Ownership Program was set up to issue licenses to owners from communities that have been disproportionately affected by previous marijuana laws; and funds from the 16 percent tax will be split between police and fire departments, highways, and a Justice Reinvestment Fund.
The overwhelming majority of money supporting this proposition came from corporations operating within the cannabis industry. Harvest Enterprises, Inc. donated nearly $2 million, according to Steve White, CEO of the Harvest Health and Recreation. White is excited about the jobs that will be created through this new legislation, but he lit up when talking about the criminal justice reform that was part of the bill.
“We worked with the ACLU to help draft the language on funding into this legislation.” He added, “This is one of the most comprehensive pieces of criminal justice reform Arizona has seen in a long time. It lays the groundwork for automatic expungement.” While there is currently no avenue toward an automated process, White stated that Harvest Health and Recreation is going to provide funding to create the software necessary to move the process along.
The Arizona Marijuana Industry Trade Association (MITA) has also played a powerful role in the legislative process. Demitri Downing, the former prosecutor who founded the organization, doesn’t personally use marijuana. “I’ve tried it a few times. It relaxes me a little too much.” He started MITA “to help people network and find opportunity.”
There are currently over 50 companies involved in some way or another with the organization, and at least two of the top five contributors to the passage of Proposition 207 are preferred vendors. Downing noted that while most of the opportunity for new entry into the Arizona market is in ancillary products, “Our industry should be looking to expand its competition as quickly as possible, because competition leads to better products and better choices.”
In a state where even the legal status of CBD was unclear until March, 2020, voters have made their opinions known on both medical marijuana and recreational marijuana at the same time. The state’s constitutional amendment, Amendment A, passed by 54.18 percent. It legalizes the possession and distribution of up to one ounce of cannabis; and it mandates that legislators develop a plan for medical marijuana and the sale of hemp by April 1, 2022.
South Dakota has traditionally been incredibly conservative regarding the legalization of marijuana, with the last initiative on the ballot losing by 67 percent in 2010. The Revenue Department will manage all licensing and regulation, and sales will be taxed at 15 percent. The boon to the economy may well be one of the top reasons for passage in a time when COVID has ravaged economies in almost every state.
According to Drey Samuelson, Campaign Manager for South Dakotans for Better Marijuana Laws, “It’s so obvious […] that prohibition doesn’t work, it harms people; and if it were lifted it would generate a significant amount of tax money that could be used for beneficial purposes.” He added that “SD will generate $250M by 2030 from Amendment A, 50% which will go to our public schools, 50% which will go to the state’s general fund.”
There was fierce opposition to the amendment from major trade associations, including the Association of General Contractors, South Dakota Association of Healthcare Organizations, South Dakota Chamber of Commerce, South Dakota Farm Bureau, South Dakota Retailers Association, and South Dakota State Medical Association.
Despite the outspoken pushback, however, cannabis won this round. Samuelson is excited to see the benefits come to fruition. “[There are] huge advantages to patients who now will be able to have legal access to marijuana that will treat seizures, chronic pain, anxiety, PTSD, etc.; no longer will people have their lives ruined for marijuana offenses that, in 11 states (soon 15), are not illegal; opioid overdose deaths will decline by roughly 25-30%; many illicit dealers will be run out of business, and the drug cartels/organized crime that supply them will lose an income stream; and people who buy marijuana will know, for the first time the strength of their doses and that they are safe; tourism in the state will benefit.”
Montana’s history with weed legalization has been arduous. In 2004, the state legalized medical marijuana through a citizen-backed initiative that passed with 61.81 percent of the vote. In 2011, the State Legislature repealed the initiative and passed a separate bill that put such strict limitations on medical dispensaries that it significantly reduced their ability to operate. Residents of the state voted to uphold the referendum by 57 percent.
In 2016, another initiative repealed the requirement that dispensaries could only serve three customers, and that they could not receive compensation beyond cost (both of these were part of the 2011 legislation). It also allowed doctors to prescribe medical marijuana for patients with chronic pain and PTSD.
The newest initiative, I-190—legalizing adult-use recreational marijuana—passed by 56.9 percent according to the AP. The state will impose a 20 percent tax on all non-medical marijuana; and the Montana Department of Revenue will be responsible for regulation and licensing for cultivation, transportation and sale. The state estimated that tax revenue will generate $48 million annually by 2025.
With COVID devastating the state’s economy, the revenue would be a welcome relief. In a June 26th interview with MG Magazine, retired state legislator Dave Lewis said, “Adding nearly $50 million dollars a year to the state budget with legal adult use marijuana isn’t just a bonus. This projected revenue has already become vital to the future budget of this state, and veterans services like all other services need tax revenues to continue.”
Pushback from the opposition group, Wrong for Montana, included a lawsuit demanding disclosure of where top supporting contributor North Fund gets its money. The organization provides funding to progressive issues all over the country, but its tax status as a 501c(4) allows it to keep its donors secret. Wrong for Montana complained that North Fund’s money was “dark money,” but courts upheld the organization’s status and allowed it to keep its donors undisclosed.
Other top sources for funding to pass I-190 include the New Approach PAC, a national group pushing for cannabis law reform; Fund for a Better Future, an advocacy organization pushing for social justice; Service Employees International Union, a union serving employees in the healthcare industry who will benefit from tax funds generated; the Marijuana Policy Project, an organization receiving funds from advocacy groups as well as corporations in the cannabis industry; and the Sixteen Thirty Group, an organization that supports progressive change, but has also been accused of receiving “dark money”.
New Jersey Governor, Phil Murphy, ran his 2017 campaign on a promise to make marijuana legal in the state; but the 2019 New Jersey Marijuana Legalization Act failed in the Senate by one vote. So the Legislature put the measure on the ballot, posing the question to voters.
The measure passed by an overwhelming majority, with 66.9 percent of the vote, according to the AP. It does not set up a framework for implementation. Instead, it simply allows the state to move forward with the process.
The only details so far include a 6.625 percent state tax, with municipalities permitted to charge an additional 2 percent tax if they choose. The rest is to be worked out through cooperation between the state’s Cannabis Regulatory Commission—consisting of five appointed members—and the Legislature.
A top financial backer of the campaign was the American Civil Liberties Union. After passage of the measure, former ACLU attorney, Diana Houenou, was appointed chair of the Cannabis Regulatory Commission. Houenou has worked on reforming the justice system surrounding cannabis, and it appears to be one of her top priorities as the state works to hammer out logistics.
“As happy as I am about the results of the vote, I would remiss if I didn’t remind us all that this is the first step,” Houenou stated in a November 6th interview with NJ.com. She later added, “For [the]cannabis industry to have integrity, it must be equitable.”
Other financial supporters included Scotts Miracle Gro, a company that supplies fertilizer for cannabis producers; Weedmaps, a tech company serving the cannabis industry; Drug Policy Action, an organization working for policy reform; and Pashman Stein Walder Hayden, a law firm serving the cannabis industry and offering criminal defense in drug charges, among other offenses.
While there are reasons to be optimistic that New Jersey’s legalization will bring about fair and equitable reform, some views are not so positive. Ed Forchion, known by many as NJWeedman, said in a September 4th interview with MG Magazine:
“I of course support the legalization of marijuana. What I don’t support is the current guise of deceit and manipulation under which it is being done. Since the 90’s, state officials have been pushing the war on drugs and targeting marijuana users in that war. Now these former and current state officials are part of the scheme to steal the marijuana industry from disenfranchised People of Color and hand it over to a few white corporate guys, openly excluding those who have been in this ‘illegal industry’ for decades. Basically, it is white men making laws to legalize other rich white men and to continue to exclude and criminalize everyone else for the same plant.”
We can only hope that the movement toward cannabis law reform includes a firm stance on equitable and restorative business practices, in addition to criminal justice reform that removes the burden from those who have been impacted by unfair cannabis laws for far too long.