As new states implemented the legalization of adult-use cannabis and federal agencies continued considering a massive overhaul of the Controlled Substances Act, 2023 marked another monumental year for the cannabis industry. As 2023 comes to a close, it’s worth looking back at key events and lessons learned to anticipate what the future of the cannabis industry has in store for 2024 and beyond.
On the federal level, the Biden administration took steps to loosen restrictions on cannabis, following the President’s request last year to begin a government-wide review process on the issue.
In a letter to the Drug Enforcement Agency (DEA) in August, a top official at the Department of Health and Human Services (HHS) recommended easing regulations on cannabis, moving the drug from Schedule I to Schedule III under the Controlled Substances Act. Among other characteristics, Schedule III drugs are categorized as having “moderate to low potential for physical and psychological dependence.” HHS noted their recommendation stems from the Food and Drug Administration’s own review.
The DEA is still conducting its final review, with a decision likely to come next year. If rescheduling occurs, it will mark the most significant change in federal cannabis law in half a century. Rescheduling could open doors for more tax exemptions for cannabis businesses and cause an increase in research on the health effects of cannabis. Although Congress failed to pass meaningful legislation on cannabis this year, momentum is building behind multiple bipartisan bills.
Most notably, the SAFER Banking Act passed out of the Senate Banking Committee in September, receiving votes from both parties. The bill was originally introduced more than a decade ago and has passed the House multiple times. If signed into law, the SAFER Banking Act would extend protections to financial institutions that offer services – such as bank accounts and loans – to state-approved cannabis businesses. Under the status quo, many licensed cannabis businesses have been forced to operate as cash-only, leading to break-ins and robberies.
Meanwhile, additional states are gradually adopting cannabis legalization following recent ballot measures and legislative initiatives.
Over half of Americans now reside in states where possessing cannabis is legal. Both Maryland and Missouri carried out the electorate’s wishes and implemented statewide amendments voted on last year expanding to adult-use cannabis. In April, the Delaware legislature also approved adult-use legalization, with Governor John Carney (D) allowing the bill to become law without his signature. The only outlier from this year is Oklahoma, where voters overwhelmingly rejected legalizing adult-use cannabis back in March.
Perhaps the most groundbreaking development comes from the Buckeye State. In November, Ohio voters chose to legalize cannabis, becoming the 24th state to approve its adult use. This is notable considering Ohio had previously rejected a similar ballot measure as recently as 2015.
Moreover, public opinion polls show that Americans are increasingly receptive to cannabis legalization – and are using it more. A Gallup survey in October revealed that seven in ten Americans support making cannabis legal. Only 12 percent said the same when the poll was first conducted in 1969. Further, according to a recent SAMHSA study, over 40 million adults reported using cannabis in the last month.
Internationally, European countries are also proceeding closer to cannabis legalization. Germany could soon become the largest EU country to decriminalize cannabis for adults, with a Bundestag vote expected to come as early as this December. The commercialization of cannabis businesses is expected to unfold in two phases with non-profit social clubs getting approved early next year and a more expansive tax and regulate framework coming later in 2024. Similarly, the Netherlands announced plans to launch a pilot program in December testing out the legal sale of cannabis.
In another win for the cannabis industry this year, X (formerly Twitter) became the first major social media platform to allow cannabis ads, giving industry advertisers access to a wider audience. The policy change came with numerous restrictions, though. Requirements include being licensed by the “appropriate authorities” and not targeting those under 21.
Looking ahead to 2024, the upcoming election season provides voters with a fresh opportunity to change the policy landscape for the cannabis industry. There’s already talk of Florida – our nation’s third most populous state – conducting its own cannabis ballot measure. With a presidential election around the corner, candidates might also make new promises about adult-use legalization. If 2023 is any indication, a year is plenty of time for major policy shifts.
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