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Three Actionable Ways States Can Prepare for Federal Cannabis Legalization

Apr 25, 2024

It’s becoming increasingly clear that changes to America’s federal cannabis laws are all but inevitable. What’s a bit hazier, however, is what those changes will actually look like and when those changes will take place. Whether the cannabis floodgates open in a manner similar to hemp and chaos ensues, or whether we’re amid a decades-long path of incremental reform, states should begin preparing now. Although by no means a comprehensive list, here are three ways that states can begin to prepare for federal legalization.

  1. Assess Litigation Risks

To avoid potentially lengthy, costly, and disruptive lawsuits, regulators should review all cannabis-related laws and statutes for potential litigation risks, especially those relating to matters of interstate commerce. Rules that benefit in-state operators to the disadvantage of out-of-state operators, such as residency requirements for licenses or laws that explicitly prohibit the sale of cannabis from out-of-state operators, violate the Dormant Commerce Clause and are ripe for legal challenge. For example, residency requirements in Maine were struck down by federal courts, finding that they unconstitutionally discriminate against those living in other states. Further, lawmakers should proactively address any laws that prohibit interstate trade altogether, as they will likely be immediately challenged upon federal legalization.

  1. Form Meaningful Partnerships with Fellow States and Federal Agencies

Cannabis regulators should develop relationships with their counterparts in other legal-cannabis states, along with the federal agencies likely to have a hand in national cannabis regulation. Building connections with other states, either through informal channels or established working groups like the Cannabis Regulators Association, allows for the sharing of policy best practices and lessons learned. Further, these relationships can create opportunities for states to work together to prepare for federal legalization, such as harmonizing certain regulations to ease interstate trade or improve health and safety standards.

Establishing working relationships with key federal agencies, such as the FDA, TTB, or USDA, can allow regulators to stay up to date on the latest developments at the national level and better understand the regulatory priorities of each agency. For example, OSHA representatives recently held a webinar about the agency’s guidance and enforcement priorities for workers in the cannabis industry. These relationships with federal agencies can also create opportunities for regulators to lend their expertise and ensure their state, constituents, and local cannabis industry are represented in national conversations.

  1. Identify Opportunities to Support Your State’s Industry Now

Another step states can take to prepare for federal legalization is to identify ways to support their local cannabis industry, either through the elimination of excessively burdensome regulations or by creating new economic opportunities for both existing licensees and new market entrants. Changes to a cannabis marketplace take time, especially if they require legislative action, so the sooner regulators and lawmakers work to make these changes, the better prepared they will be for federal policy change. Policymakers should consider removing or alleviating regulations that impose an unnecessary cost on operators, such as excessively high tax rates, or limit the ability of businesses to compete in a national market, such as prohibitions on cannabis beverages or digital advertising. Further, policymakers should consider creating new business opportunities for their state’s cannabis industry, particularly on the consumer side of the market, such as cannabis hospitality, craft cannabis, and delivery services.

Summer Fox

Summer Fox

Summer Fox (MPP) is the program manager at Cannabis Public Policy Consulting, where she manages the research team’s contracts, provides operational support to leadership, and lends her expertise as a cannabis policy consultant as needed. Summer received her Master of Public Policy (MPP) and Bachelor of Arts in Social Ecology from the University of California, Irvine. Before joining CPPC, Summer worked as the Manager of Policy at a cannabis technology company and has extensive experience in policy research, communications, government relations, and project management.

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