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What the election could mean for retail cannabis

While Trump surprised many by speaking up for Florida’s cannabis ballot initiative recently, Harris has advocated for cannabis reforms for years.
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Illustration: Anna Kim, Photos: Justin Sullivan, Win McNamee/Getty Images

7 min read

Former President Donald Trump surprised many when he announced in a Truth Social post on September 8 that, as a Florida resident, he’d vote in favor of the recreational cannabis initiative on its November ballot, in opposition to fellow Republican Florida Governor Ron DeSantis.

Trump earlier claimed on Fox News that his opponent in the presidential race, Vice President Kamala Harris, put “Black people in jail over marijuana” when she was a prosecutor in California, but since her election to the US Senate in 2016, and as vice president, she’s been an advocate for reform, even sponsoring a bill in 2019 to legalize cannabis nationally.

Harris’s running mate, Minnesota Governor Tim Walz, advocated for his state’s recreational use cannabis law, which he signed in 2023. Contrastly, Ohio’s Senator JD Vance, Trump’s running mate, declined to take a stand on his state of Ohio’s cannabis legalization law that also passed last year.

For cannabis retailers, brands, and growers, the stakes of the election are high. Retail Brew contacted both campaigns to expand on their positions on cannabis reform; neither responded. Here are three major issues for the industry and where our research indicates the candidates stand:

Vice President Kamala Harris and her running mate,  Minnesota Governor Tim Walz.

Matthew Hatcher/Getty Images

National cannabis legalization

What it is: While recreational cannabis has so far been legalized in 24 states and Washington, DC, cannabis remains a Schedule I illegal substance under federal law. This means that cannabis retailers have an excessive tax burden and are usually shunned by major banks and credit card companies that are federally regulated and avoid cannabis-related businesses.

Where they stand: In 2019, then-Senator Harris was the lead sponsor of the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, a bill that would have decriminalized cannabis. Among other things the proposal, which did not pass the Senate, would have removed (descheduled) cannabis from the list of controlled substances, eliminated penalties against individuals for growing, distributing, or possessing it, and made Small Business Administration loans available to cannabis businesses.

Harris had not always been so pro-legalization, having opposed a California measure to legalize recreational cannabis as the state’s attorney general in 2010.

“Times have changed—marijuana should not be a crime,” Harris said nine years later when introducing the MORE Act. “We need to start regulating marijuana, and expunge marijuana convictions from the records of millions of Americans so they can get on with their lives.”

While Trump has voiced support for some cannabis reform laws recently, he has stopped far shy of supporting a national change, as Harris did with the MORE Act.

During his administration, there was concern that Trump would challenge some state cannabis laws. In 2018, Attorney General Jeff Sessions, a Trump appointee, rescinded the Cole Memo, which had been issued during the Obama administration to guide federal regulators not to prosecute states that legalized cannabis. Sessions ended up not going after state operators.

Trump “appointed an attorney general who made a show of repealing the Cole Memo and then, in terms of actual policy, continued to follow the Cole Memo,” Bryan Barash, VP of external affairs and deputy general counsel at cannabis sales platform Dutchie, told MJBizDaily recently.

Former President Donald Trump and his running mate, Senator JD Vance.

Jim Watson/Getty Images

Rescheduling

What it is: Rescheduling is a far cry from descheduling, but still would be a significant reform for cannabis retailers.

Under the Biden Administration, in 2023 the Department of Health and Human Services and the Department of Justice recommended that cannabis be reclassified from what the DEA calls a Schedule I drug—“drugs with no currently accepted medical use and a high potential for abuse,” such as heroin and LSD—to a Schedule III drug (alongside testosterone and Tylenol with codeine).

Following a strange-but-true 1981 court case we explained previously, Congress added Section 280E to the tax code. Under 280E, cannabis retailers cannot write off operating expenses—including payroll, utilities, rent, and marketing. In accountant-speak, that means cannabis stores pay taxes on gross profit, while other retailers pay taxes on net profit.

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But while Schedule I and II substances are subject to 280E, Schedule III substances are not, meaning that rescheduling cannabis would enable cannabis retailers to write off operating expenses and pay taxes only on their net profit.

The DEA is scheduled to hold a hearing on the rescheduling after the election, on December 2.

Where they stand: At an event promoting the rescheduling measure in March, Harris spoke against marijuana being in the same category as drugs like heroin, and that even fentanyl is in a softer category, Schedule II.

“Marijuana is considered as dangerous as heroin and more dangerous than fentanyl, which is absurd, not to mention patently unfair,” Harris said at the time.

During Trump’s administration, however, Sessions did the opposite of distinguishing cannabis from heroin, declaring in 2017 that cannabis was “only slightly less awful” than heroin. “Our nation needs to say clearly once again that using drugs will destroy your life,” Sessions said.

More recently, Trump voiced his support for rescheduling in the same recent Truth Social post where he announced he supported Florida’s proposed recreational cannabis law. “As President, we will continue to focus on research to unlock the medical uses of marijuana to a Schedule 3 drug,” he wrote, referring to a belief that rescheduling might make it easier to study cannabis’ potential health benefits in laboratory settings.

Cannabis flies into a shopping cart.

Colnihko/Getty Images

The SAFER Banking Act

What it is: As more states pass recreational-use cannabis laws, many who open retail dispensaries already have long-standing relationships with banks for existing businesses.

And then they don’t.

Getting dropped by a bank is a “rite of passage” for cannabis retailers, Lauren Rudick, managing principal at Rudick Law Group, a New York-based firm that provides legal services to cannabis companies, told Retail Brew in 2023. Only 10% of banks permit cannabis-related businesses to open accounts, according to Reuters.

Most banks prohibit cannabis businesses because the substance is illegal under federal law and, as the Wall Street Journal explained, they don’t want to be “accused of money laundering or violating bank-secrecy laws, as well as facilitating the illegal drug trade.”

Enter the Secure and Fair Enforcement Regulation (SAFER) Banking Act. It would enshrine that banking transactions from state-licensed cannabis are lawful.

Versions of the SAFER Banking Act have passed the US House of Representatives seven times since 2019, according to a February analysis by The American Bar Association. It has never passed in the Senate.

Where they stand: In a 2019 column on CNN.com, then-Senator Harris wrote that year’s version of the bill was “a promising step forward in allowing legal marijuana businesses to access basic banking services.”

In his Truth Social post, Trump also seemed to obliquely support some kind of legislation that would protect banking for cannabis retailers, writing that if elected he’d “work with Congress to pass common sense laws, including safe [sic] banking for state authorized companies.”

Trump’s running mate, Senator JD Vance, voted against the SAFER Banking Act in 2023 when it came before the Senate’s Committee on Banking, Housing, and Urban Affairs, on which he serves.

In a letter to a constituent that the constituent shared with the Cannabis Business Times, Vance explained that he voted against the measure because “the upsides of this bill are overstated.”

The bill’s passage, Vance continued, “could pave the way for more widespread marijuana use and federal legalization.”

Retail news that keeps industry pros in the know

Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.

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