A leading marijuana policy think-tank is urging legislators to take a thoughtful, yet deliberate approach to federal legalization. This will account for the unintended effects that allowing interstate commerce may have on small cannabis business and social equity programs which have been developed in state markets.
The Parabola Center for Law and Policy released a report on Wednesday that said an end to federal prohibition of cannabis is inevitable. This reform would align federal and state policies, yes, but it could also “disrupt or force the transformation” of intrastate cannabis markets, according to the group.
The report states that “how the nation will transition from dozens to one single national cannabis market and its implications is unknown, but it’s likely to be dramatic.” It is safe to assume many supporters of federal de-scheduling do not know the implications such a change in policy will have on existing state cannabis policies.
Parabola makes three recommendations that will help mitigate the risk of corporate consolidation and monopolization, as well as the undermining of state markets. They also provide a draft to address this issue.
In states with legalized marijuana, the market is operated entirely within each state. This is likely unconstitutional. Why did they do it? Ironically, they did it largely in response to federal government guidance. Once the federal government legalizes cannabis, logic will no longer apply.
The Parabola Center October 25, 2020
The report recommends that Congress explicitly state that they do not intend to preempt or prohibit any state laws, regulations, or requirements, regardless of how the state law impacts interstate commerce, or whether it favors state interests.
Next, the proposal would allow for small businesses that are worker-owned, have a social equity focus, and offer support to “disadvantaged individuals, veterans, or communities most affected by cannabis prohibition and enforcement” to be given priority in interstate marijuana commerce. This should be regulated via a federal registration system. Registrations are also reserved for state licensed entities who 1) promote industry diversity or 2) offer support and services to “disadvantaged people, veterans or individuals and communities that have been most affected by cannabis prohibition or enforcement”.
Parabola also advises that the legalization of cannabis should be accompanied by provisions to minimize the potential for corporate concentration and monopolization in the industry, a concern the advocacy group separately addressed earlier this year as part of a campaign of education.
The report focuses also on avoiding violation of the U.S. Constitution’s Dormant Commerce Clause, which prohibits the states from hindering or unduly limiting interstate commerce and grants Congress the power to regulate it.
Parabola explains that state regulatory structures may be liable under federal legalization, if they keep their industries completely intrastate. Without deliberate congressional action as described in the report there could be unintended consequences for state-licensed business across the nation.
If federal legalization does not come with explicit federal protections of state-based intrastate markets, then everything will change when cannabis is descheduled. In the new report, the center stated that the world of legal marijuana will look very different from what it is now. This outcome is not inevitable. Congress can choose to protect intrastate markets.
Without protection for small business, the shift from fragmented markets within states to a single large market within states through the ending of federal prohibitions and the removal of interstate barriers is likely to lead to a consolidation of the cannabis market and a monopolization by large cannabis companies. Once the federal prohibition is lifted, many large corporations that are currently active in other industries will also enter the cannabis industry.
It says that “whatever one may think of the benefits of an interstate cannabis market that is consolidated, it is clear a market of this size is unlikely to prioritize social equity goals which have been driving many state’s existing policies.” Without specific efforts from Congress to protect state level cannabis equity programs and to limit market concentration and monopolization state efforts to create a fair and inclusive industry will be erased.
California Oregon, and Washington State each have enacted legislation preparing for the import and export of cannabis between states that are legal, pending federal reform, or in California, a state attorney general’s opinion that such an activity would not expose it to disproportionate risk.
New Jersey Senate President filed a similar proposal on the East Coast last year. However, it has yet to be enacted. Maine’s legislative committee rejected in May a bill which would have allowed the governor to sign agreements with other states that allow cannabis commerce.
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Parabola played a crucial role in balancing out the push for reform of cannabis while highlighting the subtleties of the debate which might otherwise have been overlooked as momentum continued to build.
, for example, proposed changes in 2021 to a federal marijuana legalization law passed by the House. This was to ensure that there is equity on the market and that communities most affected by the prohibition can benefit from this new industry.
The Center also raised the alarm late last year about the influence that the tobacco and alcohol industry has had on federal cannabis reform. They encouraged lawmakers to reconsider the idea of emulating the legal marijuana regulations in place for booze.
In a Wednesday press release, Shaleen title, founder and director at Parabola Center said, “Excitement is growing for federal legalization because state programs are leading to good jobs and progress towards our goals of justice and equity.” “But if we were to switch the switch and federally legalize pot, that would be the end of all this progress.” The fairest solution for all is to implement marijuana gradually, protecting small businesses and employees.
Top Federal Health Agency Releases Highly-Redacted Marijuana Scheduling Letter to DEA
Photo by Mike Latimer.
The post Federal Marijuana Legalization could endanger state markets without anti-monopoly and interstate commerce protections, report says appeared on Marijuana Moment.
