Top California marijuana officials claim that there is already an established interstate market for cannabis in the United States. It was just unregulated. This forced cultivators to choose between remaining legal, but isolating their products to a single state or engaging in illegal activity by selling across state borders.
Now that three states are able to import and export marijuana, the discussion about the future of cannabis commerce has evolved. Stakeholders, advocates, and regulators are becoming more aware of the possibilities that would arise from a borderless business.
The Alliance for Sensible Markets held a webinar Wednesday in which a California cannabis regulatory official, a former Washington, D.C. regulatory official, and an attorney discussed problems with the current status quo siloed state marijuana markets, and efforts to implement legislative and administrative reform.
The biggest problem in cannabis is interstate commerce, yet few people are aware of it. Discover where we are and where we’re headed, why we do it, and how.
With @CAcannabisdept’s General Counsel Matt Lee, @crc_coalition’s Rafi Crockett, @THATadamsmith and @_Marc_Hauser_ https://t.co/J0tfnx77RK
SensibleMarkets May 11, 2020
The three western states — California Oregon, and Washington State — have enacted legislation allowing governors to negotiate agreements with other states that allow for marijuana exports and imports after federal policy changes. California’s law contains an additional provision that triggers the authorization of interstate marijuana commerce if the state’s attorney general issues a statement that there is no significant risk that federal enforcement will be taken against it.
Matt Lee, the general counsel of California Department of Cannabis Control DCC, said that restricting marijuana sales within state borders is unsustainable.
He said that if Michigan’s auto industry was limited to selling cars in Michigan or Florida orange growers were only allowed to sell oranges in Florida, or the California wine industry only allowed to sell wine in California, none of these industries would be viable.
He noted that it does not seem to be a coincidence that three Western states have passed legislation on interstate commerce, and are also the most closely linked with the illegal, unregulated sale of marijuana outside state borders.
Lee explained that he was motivated by the fact that a key way for us to strengthen the legal cannabis market is to stop forcing people to choose between the legal market and the market interstate, where all of the action historically has been done. States have struggled with the “inherent conflict” that federal prohibition creates.
The regulators want to encourage participation in the legal marketplace and keep activities aboveboard. On the other hand, “the point of legalization” is to bring the market out of shadows and regulate it.
He said that he was attracted to interstate because it is an area where he didn’t think he had to make the hard decisions or trade-offs. “This is an opportunity to increase the pie while still protecting the interests of the states.”
You can watch the conversation with @HowardWPenney and @HedgeyeTV here. Thanks to @HowardWPenney and @HedgeyeTV https://t.co/J0tfnx77RK
SensibleMarkets May 11, 2020
Interstate commerce, in addition to normalizing the cannabis industry and achieving the legalization objectives, would also address the varied supply and demand issues of each state, according to Rafi Crockt, a former D.C. Alcoholic Beverage and Cannabis Board commissioner who is also a part of the Cannabis Regulators of Color Coalition.
Washington, D.C. does not have enough physical space to grow enough marijuana to satisfy 700,000 residents, plus the 20+ million visitors that come to the city every year. “We can’t do that,” she said. “Our cannabis will continue to come from Oregon from California from Washington.”
Crockett stated, “Let’s create a system where we can do this in a safe way, which allows patients to have the best possible access to medicine, and also allows small businesses to continue to flourish in these states and in my jurisdiction.”
She added, “We have an industry of cannabis that is flourishing and thriving. It has been operating successfully for generations.” “We grow it in the Northwest and then consume it elsewhere in the country.” It works. It works. We all know it works. “The real problem is the introduction of this completely artificial and new industry.”
What we should be doing is examining how this market works. What are the most important things for this market? What can we learn from this market? What might be some red flags, or things we wouldn’t want to adopt? We already know that model works. Let’s use that model. “We will never be able to eliminate unregulated shops without doing that.”
The panel discussed federal policies as well, including the Controlled Substances Act and the dormant Commerce Clause of the U.S. Constitution.
The CSA prohibits marijuana as a Schedule I substance, but Lee said the law does not contain “unambiguous affirmatives that are unmistakably clearly stated” regarding the issue of interstate commerce.
A federal circuit court decision in Maine last summer confirmed that state marijuana laws that require cannabis businesses to have a Maine address violated the Commerce Clause. This clause prohibits states from enforcing policy that unnecessarily restricts interstate commerce, unless Congress gives specific instructions.
In November, a Oregon marijuana company filed a suit in another federal court declaring the current state ban on cannabis imports and exports from and to other states is illegitimate.
Lee, who is a lawyer, said that he believes the Commerce Clause arguments have “substantial theoretical strength.” He added that cannabis attorneys in particular “need to temper their legal theory with some political pragmatism.”
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Looking ahead in the short-term, stakeholders are eagerly awaiting updated federal marijuana guidance from the Justice Department–something that Attorney General Merrick Garland said that his office is actively working on–and how that might affect the conversation around interstate cannabis commerce.
Lee also wrote a letter to California’s Attorney General, , requesting the office provide an official opinion on potential risks associated with authorizing cross border marijuana imports and/or exports. Lee stated that regulators “still await that opinion.”
Last week, the California Attorney general’s office informed Marijuana Moment that “there are no updates at this time.”
Adam Smith, the founder of the Alliance for Sensible Markets said during the Webinar they were working with the West Coast Governors to get them request specific interstate cannabis guidance from the federal Justice Department. He said, however, that “in general, we feel that it is teed-up for a decision on the political front that will allow that to happen.”
He said that if the Justice Department can provide guidance on tolerance this year, “I believe we will be having conversations at the highest level between states in the second half this year about how to get things moving. I think that we could, and probably, move cannabis between legal markets by the first half 2024.”
Last year, the New Jersey Senate President introduced a bill to regulate interstate marijuana trade. Maine ‘s legislative committee recently rejected similar legislation. However, the chair of that committee said they could revisit it through another means.
New Hampshire Governor backs Marijuana Legalization through State-Run stores after Senate defeats Reform Bill
The post Regulators and Advocates Discuss Next steps for Marijuana Interstate Commerce first appeared on Marijuana Moment.
