Election years typically see the most movement toward federal legalization of recreational marijuana, and 2024 will be no different for one of cannabis's top trends.
At the state level, Pennsylvania and Florida could potentially join the legal cannabis industry. Indiana, which has so far appeared to be a newcomer to the cannabis legalization scene, could join the legalization march after implementing a voting system in November.
When it comes to federal advances, don't forget to mention the SAFER Banking Act. There is no sign that the law will advance on Capitol Hill, and the issues it seeks to address will likely be resolved through other channels.
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Politicians seeking re-election may keep talking about safety to drum up support, but that ship has now sailed. As American voters, it is embarrassing to see our elected officials fail to accomplish more with this legislation since it was introduced years ago. .
We are not alone in our frustration with the federal government's lack of progress; other governments are also beginning to explore other routes, including the judicial branch. One example is the Boies-Schiller-Flexner lawsuit against Attorney General Merrick Garland. It would not be surprising to see Garland submit a memo similar to Cole's memo from several years ago. If he does, it would be a meaningful step in the right direction.
We look at the potential reclassification of cannabis at the federal level
Another meaningful step in the right direction is the reclassification of cannabis under the Controlled Substances Act. The Drug Enforcement Administration (DEA) is likely to follow the Department of Health and Human Services (HHS) recommendation to reclassify marijuana as a Schedule 3 substance.
We are all waiting for this move and since the 20th is a Saturday, we believe it could be announced on April 19, 2024. Democratic leaders such as Sens. Chuck Schumer and Cory Booker may hold press conferences and try to claim victory, but they are currently playing no significant role.
Will Congress pursue a sales tax?
Congress will also keep an eye on it, as they may seek to pursue an excise tax if the 280e tax burden is eliminated. Excise taxes can be a political tool, ultimately resulting in an unnecessarily punitive tax rate of 14%.
It is unfortunate to introduce such unnecessary taxes as the legal industry is fighting the illegal market and the exploding drug market without excise or 280e taxes is unregulated. We look to Congress to act here and force drugs into legal and regulated channels.
The advances that can be made in 2024 will revive the animal spirit of cannabis and create a tsunami of liquidity. The influx of liquidity will refinance debt and restart equity raising, helping companies that would otherwise not survive. Needless to say, this could pave the way for the first U.S. operator to list on a major U.S. stock exchange. Assuming the above comes to pass, 2024 will be the most exciting year yet for the legal cannabis industry.
