Cannabusiness Advisory

The 2018 midterm elections could hold significant consequences when it comes to the immediate future of the cannabis policy throughout the U.S. Not only will a number of states be deciding their local policy, some experts suggest that if the U.S. House flips in favor of the Democrats, federal cannabis reform could shortly follow.

At the state level, California, Michigan, Missouri, Ohio, Utah, and Wisconsin will vote on a variety of different cannabis-related proposals. Michigan will decide on Proposal 1, which has the support of 62 percent of registered voters, permits people over the age of 21 to possess and grow personal-use quantities of cannabis and related concentrates, and also offers licensing activities related to commercial marijuana production and retail marijuana sales. North Dakota will vote on Measure 3, which would legalize the possession and use of marijuana by adults and automatically expunge most prior cannabis convictions. Missouri will decide on ballot questions specific to providing medical cannabis access. Utah will vote on Proposition 2, which regulates the licensed production and distribution of medical cannabis products to qualified patients. In Wisconsin, 16 counties and two cities face referendum questions concerning cannabis decriminalization; however, all are “advisory referendums,” and their passage would not require the state legislature to take action.

But it’s the battle for control of the U.S. House that likely will have the largest impact on national cannabis regulation. Despite overwhelming public support in favor of ending the federal government’s longstanding prohibitive stance, GOP leadership has largely limited any serious legislative movement in Congress. By contrast, Democrat leadership has grown increasingly outspoken in support of passing marijuana reforms in recent years, and it is likely that a Democrat-controlled Congress would – at a minimum – allow floor votes on key pieces of legislation. Probability forecasters place the Democrats’ chances of winning the House anywhere from 55% to 86%, depending on the source.

And while Democratic control of the House makes reform more likely, it’s not out of the realm of possibility for GOP leadership to take aim at federal cannabis reform. President Trump has suggested he “probably” would support legislation (i.e., the STATES Act) that allows states to decide whether marijuana should be legalized without federal interference. Other legislative measures that have been discussed, and likely would be easier to pass, include the SAFE Banking Act, which protects financial institutions that offer services to legal cannabis businesses, and the Small Business Tax Equity Act, which is designed to allow marijuana businesses to take the kinds of tax deductions that other companies can.

While there won’t be any major changes taking place overnight, we should have a clearer idea of the direction in which things are headed in just under two weeks’ time, so stay tuned.