Understanding the history and extrapolating the present to predict the future of the legal cannabis market in the USA.
To those in the industry, it seems absurd that cannabis still faces prohibition in 2019.
California, the state boasting the fifth-largest economy in the world, has legalized cannabis.
Michigan, Illinois, Oregon, Alaska, Colorado, and more have all legalized cannabis, some with tourism markets.
Most states have some form of legalized cannabis, they even recognize each other’s medical cannabis licenses.
Moreover, the 2018 farm bill declassified hemp and removed CBD from its previously-held Schedule I listing.
All signs are pointing to the United States legalizing cannabis, the only question is: when?
Compare the History of Prohibition
During prohibition, it’s been reported that tens of thousands of people died to the violence that came with the black market at the time.
Does that remind you of anything?
The War on Drugs has not only cost the lives of countless people, but it’s imprisoned an inhumane number, as well.
The parallel between the two events isn’t difficult to descry, which is why we must understand the end of prohibition to take a reasonable guess at when the United States will legalize cannabis.
Here are two of the main reasons that the prohibition of alcohol failed:
- Too many people were involved with the black market. There was overwhelming demand and the supply was filled through criminal entities.
- Prohibition was unenforceable.
Compare that to today’s cannabis market.
The black market continues to outpace the proceeds of regulated industries.
And, the cost of the War on Drugs includes, but is not limited to:
- The expansion of prisons and the United States having the highest incarceration rate in the world.
- Time spent enforcing outdated drug laws.
- Lost taxes where cannabis could be legalized and regulated.
Given that illegal cannabis is starting to look a lot like prohibition towards its end, there are some stark political differences between the two that need to be hurdled.
Extrapolate Knowledge from the Present
Prohibition was enacted under the 18th Amendment.
The 21st Amendment, a state-ratified solution, upended the 18th Amendment and legalized alcohol.
Could we see a state-ratified solution today?
Unlikely.
With less than a dozen states to fully legalize cannabis, we can’t expect to see the same state-level enthusiasm for federally-legalized cannabis.
Just to call for an amendment to end the War on Drugs, two-thirds of the states would need to agree to explore the issue.
To pass the amendment, three-fourths of the states would need to vote in favor.
We simply don’t have the numbers at this time.
The House recently voted to allow banks to work with cannabis companies, but the Senate would still need to act and the President would have to sign the bill.
While the normalization in the banking industry would be a welcome step up, that would not legalize cannabis.
While there are a handful of bills in Congress that aim to address the legalization of cannabis on some level, they are not gaining drastic momentum quite yet.
Don’t expect cannabis to be legalized by the end of the year.
When Will Cannabis Be Legal in the USA?
Eventually, cannabis will be legal in the United States, it’s just a matter of when.
In this question, we have two issues to address:
- The likelihood of a bill reaching the President’s desk that would legalize cannabis.
- The likelihood of President Trump signing a legalization bill.
Before a bill can reach the President’s desk it has to make it through the Senate, and in this case, past Senator Mitch McConnell of Kentucky.
That poses a few problems for advocates of the bill (which would only normalize cannabis banking).
The first is that Sen. McConnell has vowed to stand in the way of anything that comes out of the Democratically-controlled House.
Next is that, while the Senator endorses hemp and appreciates its farming in his home state, he has been quoted as saying that cannabis is the “illicit cousin” of hemp.
He’s a roadblock.
Assuming that roadblock is overcome, President Trump becomes a wildcard.
He’s claimed that he believes states should decide what happens with cannabis.
However, his political style could bring him to endorse fully-legal cannabis as a cornerstone of his 2020 election bid.
If he has to fight a populist-left message, he may need to swing in that direction to retain some of his voters.
It’s a known phenomenon that when cannabis is on the ballot, more democrats come out to vote, at least at the state level.
The President may understand that he doesn’t want to lose any of his supporters on the issue of legalized cannabis, or he could risk being unseated.
The Last to Legalize
While the United States may have no choice but to legalize cannabis in the near future, we may still end up being dead last in North America.
Canada has already legalized, Mexico is on its way, and we’re still trying to get in a position where banks are legally allowed to work with cannabis companies.
When will the United States legalize cannabis?
Soon.
But never soon enough.