Industry and advocates team up for cannabis legalization push

By Alex Halperin
Feb 9, 2021
USCC Interim CEO Steve Hawkins, Courtesy USCC

As federal cannabis legalization gains unprecedented momentum in the U.S. Senate, a new group of more than 40 prominent companies and advocacy groups has coalesced to support the cause. The United States Cannabis Council (USCC) aims to lead a unified push for legalization and “avoid the fragmentation that has plagued us before” said interim CEO Steven Hawkins, who is also executive director of the Marijuana Policy Project.

Under the umbrella of ending prohibition, the group has three policy objectives:

  1. Descheduling cannabis: This would remove cannabis from the reach of the Controlled Substances Act, and enable it to be regulated in a way similar to alcohol and tobacco.
  2. “Social justice and equity for impacted communities:” USCC divides this into two main facets: expungement of past cannabis offenses and the creation of ways for minority entrepreneurs to obtain cannabis business licenses. Thus far, not all of the new group’s member companies have made social justice an important component of their operations. “Every member of USCC sees social equity as a priority,” Hawkins said. “That doesn’t mean everyone has developed it to their full potential”
  3. “Creation of a sound regulatory environment:” The group calls for Congress to pass a “comprehensive, common-sense regulatory package focused on the safe and responsible sale and use of cannabis.” The particulars of what common sense regulation ends up looking like in terms of taxes, interstate trade and numerous other policy areas are questions worth billions to USCC’s members, which include several of the country’s largest cannabis companies.

    In interviews with WeedWeek and other publications, Hawkins has revealed few details about the group’s specific regulatory priorities, or where there may be differences within the coalition. For example, he declined to share whether USCC supports a national cannabis sales tax to benefit communities which bore the brunt of prohibition. The MORE Act, a bill to end prohibition which the U.S. House of Representatives passed in December, included the tax.       

One policy variable which has immense implications for who gets rich, and how rich they get, is when federal legalization happens. 

Senate Majority Leader Chuck Schumer (D.-N.Y), Sen. Cory Booker (D.-N.J.) and Sen. Ron Wyden (D.-Ore.) are collaborating on a bill to end federal prohibition which could emerge within weeks. This suggests federal legalization is a real possibility before the November 2022 midterm elections, or even this year. 

However, a fast-tracked end to prohibition isn’t necessarily in the best interest of the largest companies. One observer recently suggested to WeedWeek that big multi-state operators (MSOs), several of which have joined USCC, would benefit from an incremental legalization process. 

MSOs’ desired scenario, in this view, would be for Congress to pass cannabis banking reform, which would give the industry access to the financial system, potentially including the ability to list on major stock exchanges. Banking reform without full legalization could protect cannabis companies from having to compete with big tobacco, big alcohol and sectors who won’t participate in an illegal industry. This would enable cannabis operators to expand and mature in a moated environment for a few years before they have to compete with or be acquired by much larger mainstream companies. 

Hawkins allowed that this might be the game plan for some companies, but that “[USCC] members are focused” on ending federal prohibition during this Congress. WeedWeek asked several larger USCC member companies whether they believe a rapid legalization process is in their best financial interest. None responded to the question. (We’ll update if they do.)

Morgan Fox, Communications Director for the National Cannabis Industry Association (NCIA), wrote that smaller businesses and those led by entrepreneurs from marginalized communities “stand to gain the most” from access to banks since larger companies have the resources to make sophisticated arrangements. 

NCIA declined USCC’s invitation to join the new group but is open to collaborating with it, Fox wrote. “Federal descheduling clearly needs to happen as soon as possible.”

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