Biden Needs a Dedicated Office of Cannabis Policy

I have a suggestion for President-Elect Biden. Actually, I have about 400 of them. But since I don’t want to be the first person “blocked” by the new president (in time…), I’ll start with one.

I believe that the incoming Biden administration would be well-served by creating a discrete Office of Cannabis Policy (“OCP”) to help them make intelligent choices in this complicated and consequential area of public policy.

For those who don’t know me (which I’m told is, shockingly, most of the world), I’ve been very involved in this issue for the past decade or so. I am the author of PA’s Medical Marijuana law (Act 16 of 2016) as well as the author of the only comprehensive Adult Use (recreational) Cannabis bill (SB 350) currently pending in the legislature. I’ve also spent much of the past several years traveling around the country (when that was still possible) attending and speaking at conferences on various aspects of cannabis policy. I’ve also been working with leaders in the industry as well as law enforcement, and those focused on social justice, to create a national set of “best practices in cannabis”.

What all of my work has taught me, is that cannabis policy, as it is currently evolving, touches on almost every aspect of modern society. Here is a non-exhaustive list of the areas of American life that are affected by the decisions we make surrounding cannabis.

= Economic Development: Cannabis is on track to be a 60 billion dollar a year industry in 2021. It is one of the few industries that has actually thrived and grown during COVID. Currently, slightly over 250,000 people are directly employed by the cannabis industry. The direct economic impact of cannabis is projected to grow exponentially. But beyond that, there are literally billions of additional dollars on the sidelines waiting for policy makers to bring more rationality and predictability to the market. And keep in mind, these numbers only reflect the direct impact of cannabis businesses. The ancillary businesses (e.g. processing equipment, tracking software, soil, lighting, packaging, marketing, etc.) will be significant drivers of economic development in their own right

= Social Justice: If done right, the economic benefits of this industry will not be exclusively bestowed upon those who already have significant resources. Proper policy can open up doors of entrepreneurship to people across the economic spectrum. Things like micro-licenses and subsidized training can create opportunity for literally millions of people.

= Criminal Justice Reform: Over the past five years, an average of 665,000 people per year are arrested for marijuana-related offenses in the USA. This has far-reaching and devastating consequences. People put in the criminal justice vortex are often trapped there for life. They have trouble finding employment. But beyond that, even low-grade possession charges can be used as “bootstrap offenses” to enhance criminal penalties for other offenses, or to deny people bail or parole, etc. Ending prohibition and a thoughtful expungement protocol would make a huge difference in the lives of millions of Americans.

= Tax Policy; Currently the tax code is extremely stifling to cannabis-related businesses. This is true in many ways, but perhaps the most stark is Section 280(e) of the tax code (Title 26). This provision prohibits any business engaged in selling a Schedule 1 narcotic from taking most normal business deductions. This literally doubles the effective tax rate for most growers, processors, dispensaries, etc.

Also, it is worth noting that just at the federal level a 2018 study says that a more rational federal policy on cannabis could provide $132 Billion in annual, sustainable tax revenue, and that number has only grown.

Banking: Federal money-laundering statutes prohibit banks from handling the proceeds of a Schedule 1 narcotic. As a result, most cannabis businesses don’t have access to even the most basic banking services. They can’t get credit cards, or checking accounts. There have been numerous violent, even deadly robberies as companies have to drive large sums of cash around simply to pay basic bills. Plus, this obviously reduces effective monitoring of financial transactions and costs the federal and state treasuries a good bit of tax revenue;

There is a bill pending in Congress known as the “SAFE Banking Act”. There are also things that can be done at the regulatory level. But these impediments to normal banking are among the biggest problems the cannabis industry faces.

= Insurance: Medical marijuana is helping millions of people per year in very dramatic ways. But one of the major problems we are facing is that, like most medicine, it can be expensive. However, current federal law impedes most insurance coverage of any marijuana-derived products. This is a tragedy as people are denied medicine and forced to endure needless suffering. Insurance companies want to offer this sort of coverage, we should let them.

= Public Health: Medical marijuana is helping millions of people. But it’s very existence feels tenuous. Given that as a technical matter, ALL state medical marijuana programs violate federal law, we are always one zealous anti-cannabis Attorney General away from being shut down. As it stands, there is some protection in federal law in the form of the Rohrabacher-Blumenauer Amendment, which prohibits the use of federal funds to interfere in legitimate state medical marijuana protocols. But this isn’t a statute. It’s simply part of an annual budget resolution which must be renewed every year. And every year it is a fight. It’s actually been taken out of the budget in a couple of recent budgets, only to be put back in at the last minute. It is very difficult for the industry (or any industry) to survive in such an uncertain environment.

= International Relations: Another unfortunate consequence of current federal policy is that it sustains the illegal, international drug trafficking infrastructure. As I put it when I speak on the subject, “Every dime that does not go into the pockets of a licensed, vetted, entrepreneur, goes instead into the pockets of violent drug cartels”.

= Agriculture: My team and I have spent a good bit of time working with the farming community. An intelligent cannabis (and hemp!) policy would be a huge benefit to certain agricultural interests which are seeking guidance as they navigate the inherent tensions created by a patchwork of state laws, all of which conflict with federal law.

I could obviously add to this list and go into greater detail about each of these categories, but I think you get the idea.

I believe that a group of people who have spent much of their lives steeped in various aspects of cannabis, would be invaluable in creating an integrated and sustainable national cannabis policy that dovetails well with state protocols.

This is what I think OCP should do day-to-day:

= Meet with stakeholders and do the detailed research necessary to present President Biden with wise and defendable policy options on the various aspects of cannabis which need to be addressed;

= Work with relevant personnel in the various federal agencies (Department of Agriculture, AG, HHS, State, OMB, etc.) to coordinate policy choices between agencies and between the federal government of the states;

= Work with the administration’s legislative team to persuade Congress and state legislatures to adopt administration policies;

= Promote administration policies to gain buy-in from relevant entities (law enforcement, criminal justice reform advocates, medical organizations, competing factions of the cannabis industry itself, etc.);

= Gather and monitor incoming data reflecting how well policy choices are working, the extent to which they are meeting their goals, and whether course corrections are necessary.

I know that the incoming administration has a lot on it’s plate, and numerous, extremely pressing problems to address beginning on day one. However, cannabis policy is evolving and changing rapidly. Just three weeks ago, all five states that had forms of cannabis legalization on the ballot saw those initiatives pass. More states will legalize in each of the approaching several years. The consequences of these changes are enormous in numerous ways. It is critical for the administration to be part of the conversation as this trend continues.