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Cannabis 2023

Cannabis 2023: Can a Year of Baby Steps Move Federal Legalization Forward?

With four states adding or updating marijuana legislation in 2023, only 10 states remain as outliers, allowing no legal medical or adult-use marijuana. Coming on board the adult-use train this year were Delaware, Minnesota and Ohio, with Kentucky passing its first legalization for medical-use.

Despite this overwhelming majority of states allowing medical-use – and the growing number of states legalizing adult-use, we’ve seen no real progress on the federal level in 2023. Instead, as we discussed in our February article, each small step forward seems to be countered with giant steps back – even on the CBD level, and the months since then haven’t elicited anything noteworthy for CBD or marijuana.

In fact, states continue to face numerous challenges stemming from the lack of federal legalization. Take for example the Minnesota Governor’s signing of adult-use marijuana into law, which was immediately followed by a notice from the St. Paul, MN, Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), “drawing attention to the distinction between state and federal law.” The notice reminded residents that, regardless of state laws, cannabis is still federally considered to be a controlled substance, thus prohibiting any person who is an “unlawful user” of a federally controlled substance from possessing firearms or ammunition. (See TAG’s article “Unique Challenges Continue for State-Legalized Cannabis“ for more information.)

The year of 2023 also saw continuing finance challenges for the industry, with Mastercard revoking the use of its cards (including bank cards and ATM withdrawals) for the purchase of marijuana products, even in states where it is legal. Additionally, the Paychex payroll company informed cannabis operations earlier this year that they could no longer use their services for marijuana-related businesses, and many banks continue to refuse to provide financial services for cannabis operations.

One positive note of 2023 was the recommendation from the Department of Health and Human Services (HHS) to the Drug Enforcement Agency (DEA) to reclassify marijuana as a Schedule III drug from its current status as Schedule I. The recommendation was a direct response to President Biden’s October 2022 directive for the Secretary of HHS to review how marijuana is scheduled under federal law. While this would not legalize marijuana, it would mean that the federal government sees it as having medical uses – which could be a positive step toward medically approved marijuana as it also facilitates cannabis research that could potentially accelerate FDA approval.

In fact, a Congressional Research Service Report sees the DEA reclassification as inevitable, as a Congressional hearing of 2020 included DEA testimony that it is “bound by FDA’s recommendations on scientific and medical matters.” So, the report adds, “If past is prologue it could be likely that DEA will reschedule marijuana according to HHS’s recommendation,” which would have broad implications for federal policy.

Wrapping up the year was a meeting of federal agency representatives in a National Academies of Sciences, Engineering and Medicine (NASEM) committee meeting focused on Public Health Consequences of Changes in the Cannabis Policy Landscape. With states continuing to move forward on legalization, such federal discussions and research are vital to improving the knowledge of medical personnel, as well as manufacturers and distributors of cannabis products – and consumers.

While the year did not provide any giant steps forward toward the legalization of marijuana on the federal stage, we can hope that the continued toddling baby steps eventually lead to more surety by the federal agencies enabling them to stand fully upright and make some concrete decisions.


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