Road To Legalization: The True State Of Cannabis Legalization In The United States

The culture of prohibition and stigmatization of cannabis use in the world has been a burden that this innocent plant has had to bear for decades.

However, public opinion has been changing towards an open and permissive vision: at the end of the ’60s, only 12% of Americans were in favor of the legalization of cannabis; at the beginning of this century, 30%; and this year, more than 70%.

But as always, legislation is moving at a snail’s pace in a rocket-powered world, leaving aside the needs of the market and disguising the prolongation of prohibition with excessively restrictive regulatory measures.

The history of prohibition in North America is long and storied. 

In 1914 the United States banned cocaine and opiates. There was also the famous Prohibition Law, which was later repealed, not to mention the battle against tobacco. In the 1930s, marijuana was criminalized, and the prejudices are still carried to this day.

Since the 1970s, then President Richard Nixon declared drugs “public enemy number one,” which implied an almost vicious prosecution of anyone who used marijuana. 

During the last century, U.S. prohibition became the guide at the domestic and international level, with the emblem of the persecution of drugs being the flag of many presidents. 

This persecution and prohibition have been so regardless of who has been the tenant in the White House, although many presidents have used the cause to further their polls.

Even the now president-elect, Joe Biden, boasted during the campaign of his support for cannabis regulation. Still, almost two years have passed, and there has been no concrete action that actually benefits the market or its consumers.

The good news is that the majority of the country’s inhabitants, once ardent enemies of cannabis, have now become loyal supporters of the cause, as they have witnessed first-hand its potential benefits.

Currently, experts mention that a fundamental factor must be taken into account regarding prohibition and regulation, and that is that all regulations in the United States are state-based. Prohibition remains the only norm at the federal level. 

Recreational use of cannabis is legal in 19 states and medical use in 38. That is certainly an advance, but it is far from a resounding victory against the system.

Government burdens, as well as restrictions on cannabis, make it a costly industry to get into and stay in. It is not easy for an entrepreneur to start cannabis cultivation, production, distribution, or retail business, even in states where it is regulated. Regulations imply costs on all fronts.

The regulation of cannabis was supposed to take something widely used and erase the criminal element from it. But thanks to over-regulation, excessive taxation, and state-by-state inconsistencies, cannabis legalization is becoming a new form of prohibition.

Many states make dealing with weed more complex than it should be, not to mention that the continued federal prohibition of marijuana makes building a business extremely difficult and limits access to the conventional banking system. Leaving small and medium-sized businesses unsupported.

The reality is that current legislation is not in line with what U.S. consumers want or what is happening on the streets. Regulation and legalization should work synergistically between the parties involved in the cannabis business and the people who regulate it to make the most of a multi-billion dollar business.

Regulation in some states is a good starting point, but it is not a carte blanche. 

There are still more than 40,000 Americans incarcerated for non-violent cannabis offenses that make no sense. It is an illogical situation if you look at it objectively. 

U.S. lawmakers should strive to create criminal policies where these offenses are not imprisonable, freeing up government budgetary resources and preventing innocent people from ending up in violent environments with high rates of relapse. (But this is a topic for a separate article)

Another important point of regulation is the level of tax burdens. Companies in the cannabis market pay high taxes, very high ones, in fact.

In the words of the CEO of Green Thumb Industries, “secure banking is important to lower the cost of capital and allow new entrants into the industry.” Without this opportunity, it is very difficult for investors to easily access the cannabis market, which makes access to capital more costly, delaying the growth of the industry and limiting the capabilities of the cannabis companies. 

One of the main risks of this over-regulation is the possibility of turning to the black market, as they are not under the constant scrutiny of a controlling state or subject to exorbitant tax burdens. This is not only a stab at legal businesses and the American legal system but also a risk for consumers themselves.

Despite legal and regulated markets in 38 jurisdictions, the illicit cannabis business continues to eclipse legal sales.

Everyone loves the idea of a fair and transparent market. Still, without federal legalization that would involve removing cannabis from the list of controlled substances, anyone trying to create a large-scale cannabis business will be crushed by dozens of regulations, reporting standards, and tax regimes.