Overview
During just the past month alone, and especially the recent election cycle, significant developments with respect to cannabis and its legalization occurred. From changes at the federal level with wide ranging potential impacts on either reclassification and/or legalization of cannabis, to impactive federal and state election victories as well as passed ballot initiatives, all moving legalization even further along. Meanwhile New York and New Jersey continue to take steps towards broad legalization, albeit with stumbling blocks that keep postponing promised passage deadlines while the “race” continues to see just which state will beat the other to significant new tax revenues generated by the legal marijuana markets.
Notable Developments at the Federal Level
Two of the fiercest opponents of cannabis legalization, or states’ rights recognition for legalization, are no longer impediments at the federal level…and they both happen to be named Sessions. First, it is well known that former Attorney General Jeff Sessions has been one of the most ardent opposers of any legalization, reclassification or decriminalization of marijuana at the federal level. Left to his devices, Jeff Sessions would likely have sought to return the country back to the days of the costly, and largely ineffective, “war on drugs.” However, with the recent “resignation” of his position as Attorney General, Jeff Sessions will no longer be in a position to impede steps already in the works at the federal level to, at the very least, give greater recognition to states’ rights in choosing to decriminalize and/or legalize the cannabis business within those states. Advocates are hopeful that any new appointee made by President Trump will be much more open to reforms. With 33 states already having approved medical marijuana use and another 10 allowing adult recreational cannabis use, state rights recognition alone would have a significant impact on the growth of the industry.
Additionally, the recent loss by Representative Pete Sessions (R-Texas) of his House seat is likely to have an equally, if not greater, impact on at least the House side of Congress towards legalization or decriminalization. Rep. Sessions served more than 20 years in the House. He was a powerful voice in opposition to virtually any changes at the federal level towards marijuana decriminalization or use. On a posting made on Election Day by the political director of the marijuana-advocacy group NORML, Justin Strekal stated that Rep. Sessions was the “single greatest impediment” in the House to the passage of any “common-sense, voter-supported marijuana law reform measures.” In short, no one in the cannabis industry should be shedding any tears over the dual departures of the Sessions. Also, it was announced that in January, Republican House member Bob Goodlatte of Pennsylvania will be retiring and he had been an active impediment, as chairman of the House Judiciary Committee, to a number of pieces of proposed cannabis legislation relating to criminal justice, including states’ rights and seeking to protect states allowing cannabis use from punishment at the federal level. Replacing some of these “old timers” on the Hill are a number of new candidates that have made it clear they are much more receptive to relaxing cannabis laws/restrictions at the federal level. The Senate and the White House still remain a concern, but with the latest polls showing that some 66% of voting-age Americans support legalization, including more than half of Republicans, the changes in the House and with the Attorney General clearly herald a positive direction at the federal level that has not previously existed.
State Initiatives
Several states had cannabis initiatives on their ballots on this Election Day. The populous swing state of Michigan became the first Midwestern state to legalize the recreational use of cannabis when 56% of the state’s voters voted in favor of it. Prop 1 as it was referred to not only authorizes the commercial production and retail sale of marijuana but also allows those 21 and older to grow and possess marijuana, and related products, for personal use. Voters in the two traditionally red states of Utah and Missouri also passed medical marijuana initiatives on Election Day. Prop 2 in Utah permits medical marijuana use for people suffering from various qualifying illnesses/conditions. The state will regulate the licensed production and use of medical marijuana to those with physician approvals and recommendations. Missouri’s law will also create a regulated market for the production and distribution of medical marijuana to physician approved patients. The tax revenues generated will be used to support veterans’ health care services. The only shortfall on Election Day was the failure of voters in North Dakota to approve adult recreational use of marijuana. However, medical marijuana use remains legal in the state for those with qualifying conditions.
New York and New Jersey
As previously reported, there has been notable movement towards legalization of the recreational use of cannabis in both of the states of New York and New Jersey during the past year. Most recently, New York has continued to hold both public hearings as well as separate roving Assembly hearings in moving towards legalization legislation. That process may be further enhanced by the results of Election Day as Democrats won control of the state Senate. With Governor Cuomo winning big for his third term and Democrats already controlling the state Assembly, capturing the Senate should be a significant step for assuring passage of progressive legislation, including as to recreational marijuana production and use, in New York. There is already proposed legislation in New York supportive of recreational marijuana use legalization in the form of the Marihuana Regulation and Taxation Act (the Act), that New York’s new lawmakers can seek to move forward. The Drugs & the Law Committee of the New York City Bar Association (City Bar) also gave additional recent support and credence to passage of the Act. In short, all of the right moves appear to be being made in New York towards legalization, and related taxation, of adult recreational use of marijuana in the state sooner rather than later as we move into 2019. As an aside, since the New York Police Department instituted in September new guidelines applicable to marijuana-related arrests, such arrests for low-level marijuana possession or use have dropped by more than 90 percent.
Meanwhile, New Jersey has seen several overly optimistic “deadlines” come and go for the passage of legislation for the legalization of recreational marijuana use. However, just before Thanksgiving Governor Murphy signed into law a bill directing the state’s Agriculture Department to create a pilot program to research the cultivation of industrial hemp in New Jersey. The question still remains open though as to whether the Governor’s campaign vow to sign into law by this year’s end recreational cannabis legislation will still be fulfilled. State legislators, as well as Governor Murphy, are also still negotiating aspects of the current proposed legalization legislation; although a previously opposed key legislator, i.e., Senator Joseph Vitale appears to now be leaning toward voting in favor of passage. There is a multi-stepped process involved to obtain passage of legalization legislation that is likely to carry the matter into 2019, but there remains a focused movement towards that result in New Jersey.
It was recently announced that beginning November 26, state lawmakers would begin debating a package of cannabis legalization and decriminalization bills. Both the state Senate and Assembly budget committees (the “Committees”) were to debate and move to vote on the “New Jersey Cannabis Regulatory and Expungement Aid Modernization Act” (S2703). Similar to earlier versions this Act clarifies, among other things, that (1) cannabis delivery services will be allowed, (2) dispensaries can provide separate public lounges for the consumption of cannabis (think “cannabis coffee houses”), (3) with the exception of micro-businesses, other licensed cannabis businesses in state must allow workers to be represented by unions, and (4) a Cannabis Regulatory Commission of 5 members, appointed by the Governor and Legislature, will oversee virtually all aspects of the industry. The bill also provides a way to have previous arrests and convictions for low-end cannabis offenses to be expunged from criminal records. While the budget committees debate this bill, the Senate Health, Human Services and senior Citizens Committee meet to approve two other related bills (S10) and (S2426) focused on making the existing medicinal marijuana law more consumer-friendly by, among other things, greatly expanding the number of qualifying serious ailments for patients who want to use cannabis to treat their conditions.
On November 26, 2018, after hours of public hearing and comment on the proposed bills outlined above the Committees did, in fact, approve the various cannabis-related bills before them, The next step will be a vote on the bills by the full Senate and Assembly, potentially by mid-December, with presumably some additional negotiation in the interim, including with the Governor’s office, to try and reach agreement on final language for each of the bills.
Should you have questions or require additional information about any of the above or generally with respect to the laws and regulations concerning cannabis criminalization and/or legalization, please contact Eric W. Sleeper.
