MJBiz Daily’s article predicts 7 events that we can expect in 2024, which, potentially, change the game for many players of the industry. The main theme is the potential rescheduling of marijuana from Schedule 1 to Schedule 3 of the Controlled Substances Act (CSA), which would have significant implications for the industry, such as tax relief, banking reform, and increased research opportunities.
The article begins by explaining the background and context of the rescheduling process, which was initiated by the Biden administration in October 2022, following a recommendation from the Department of Health and Human Services. The article claims that the rescheduling would be the biggest change in U.S. marijuana policy in 50 years, and that it could also boost Biden’s reelection chances.
The article then outlines some of the benefits and challenges of rescheduling, such as:
The elimination of Section 280E of the federal tax code, which has been a major burden for state-legal cannabis businesses, as it prevents them from deducting many normal business expenses. The article cites an estimate that cannabis retailers will pay an extra $2 billion in federal taxes in 2024 due to 280E, and mentions a case of a Florida-based company seeking a $143 million refund.
The possibility of marijuana banking reform, which would allow cannabis businesses to access financial services and capital markets, and attract more investment. The article notes that Congress has been slow to pass such legislation, despite bipartisan support.
The opportunity for more research and innovation on cannabis, especially on minor cannabinoids, such as CBN, CBG, and THCV, which have potential medical and market value. The article states that rescheduling would acknowledge the medical value of cannabis, and allow for more data and evidence from the states.
The article also mentions some of the other factors and trends that could affect the cannabis industry in 2024, such as:
The next state to legalize adult-use marijuana, which could face legal or political obstacles.
The competition and pricing pressure from the illicit market, which could undermine the viability of the legal market.
The growth and innovation of cannabis beverages, which could offer a healthier and more enjoyable alternative to alcohol.
The article also focuses on three specific predictions:
Rescheduling might be the only progress at the federal level in 2024, as Congress is unlikely to pass any other marijuana legislation, such as banking reform or hemp regulation, due to partisan gridlock and election year dynamics.
Florida and Pennsylvania might be the next states to legalize adult-use marijuana, as they face pressure from their neighboring states and their own voters. However, they also face legal and political hurdles, such as constitutional amendments, court challenges, and legislative opposition.
Marijuana reform will be a 2024 presidential campaign issue for some candidates, as it could influence voter turnout and preferences, especially in key states such as Florida and Ohio, where legalization measures or sales are expected to take place.
Finally the article mentions its final two specific predictions:
States will make moves against the illicit market, which poses a threat to the viability and legitimacy of the legal market. The article cites the example of New York, where the governor announced the opening of the 37th legal store, but faced a huge and persistent illicit market, with thousands of unlicensed sellers operating in the city. The article also mentions California, another state with a large and competitive illicit market. The article suggests that states need to find a balance between enforcement and market incentives to curb unlicensed sales and attract customers to the legal market.
States will either deliver on ambitious social equity promises or reimagine “a fair industry”. The article acknowledges the ongoing struggle of the legal industry to fulfill its criminal justice reform vows, and to ensure that disadvantaged groups have a fair share of the opportunities. The article refers to the case of New York, where the initial plans to prioritize small businesses and individuals affected by the war on drugs faced constitutional challenges. The article also points to Ohio, where lawmakers failed to make changes to the voter-approved legalization measure, and might seek a lawsuit-proof equity plan.
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