In the cannabis industry, hopes are high by definition (and inhalation), but those hopes were dashed on Election Day, when all three recreational cannabis measures on state ballots failed.
Voters in Florida, North Dakota, and South Dakota rejected the proposals, leaving the tally of states with legal retail cannabis stores at 24, plus Washington, DC.
“It feels like a gut punch,” Roz McCarthy, founder and CEO of Florida-based Black Buddha Cannabis, said during an election postmortem Zoom panel on LinkedIn hosted by MJBizDaily the day after the election.
Unlike North Dakota, where 52.5% voted against the measure, and South Dakota, where 55.5% rejected it, Florida’s proposal had popular support, with 55.9% voting in favor. But in the Sunshine State, Florida voters passed a constitutional amendment in 2006 that raised the threshold to pass future constitutional amendments to 60%. (That 2006 amendment passed, ironically, with 57.8% of the vote, meaning it didn’t meet the threshold of votes that it instituted for constitutional amendments that followed it.)
Smoke signals: In an October YouGov survey, 45% of respondents said a Kamala Harris presidency would be better for the cannabis industry, nearly three times as many (16%) who thought a Donald Trump presidency would be better, with 13% thinking they’d both be equally good and 26% not sure.
But Trump surprised many in September when he posted on Truth Social that he was in favor of reforming some cannabis laws, including supporting the recreational cannabis proposal in his home state of Florida.
As we reported before the election, Trump also announced that he supported the proposed reclassification of cannabis from what the DEA calls a Schedule I drug—“drugs with no currently accepted medical use and a high potential for abuse,” including heroin and LSD—to a Schedule III drug, which includes testosterone and Tylenol with codeine.
For cannabis retailers, the significance of rescheduling is that under a provision, 280E, in the tax code, they cannot write off major operating expenses, including payroll, utilities, rent, and marketing. However,if cannabis were rescheduled to a Schedule III drug, they would be able to write off operating expenses like other retailers.
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.
Another possible reform on the horizon, the Secure and Fair Enforcement Regulation (SAFER) Banking Act, would help cannabis retail businesses, who often are shunned by banks because the drug is illegal under federal law, by codifying that banking transactions with state-licensed cannabis businesses are lawful. Trump also seemed to signal that he supported that, too, writing on Truth Social that if elected, he’d “work with Congress to pass common sense laws, including safe [sic] banking for state authorized companies.”
But do a few comments late in the campaign mean that Trump will make cannabis reform a priority?
Full weed ahead?: David Culver, SVP of public affairs and lobbyist for the US Cannabis Council, said in September in MJBizDaily that Harris was a “champion for cannabis reform.”
But during the recent Zoom panel, Culver said he plans to “hold [Trump’s] feet to the fire” when it comes to his pre-election reform promises.
“This is not the ideal situation, and certainly not what we were hoping for, but we are in a position that we are going to be able to get some stuff done next year,” Culver said. “I’m going to be standing in line as soon as that Trump transition office opens with my little nerdy notepad with a bunch of requests. So let’s keep our chins up.”
Less optimistic was William Garriott, chair of the Law, Politics, and Society program at Drake University in Des Moines, Iowa, who’s researched US cannabis legislation for the last decade.
“Cannabis legalization was not a priority during [Trump’s] campaign or his previous presidency,” Garriott wrote in The Conversation on November 5. “Though Trump backed Amendment 3 for recreational use in Florida, his support was tepid compared with priority issues like immigration. The fact that the measure failed and is unpopular within the Republican Party does not create much incentive for him to put the issue at the top of his agenda once he returns to office.”