John SchroyerNow that the 2024 presidential election dust is in the process of settling, cannabis industry insiders may very well be wondering what’s next, given the mixed past policy stances regarding marijuana from President-elect Donald Trump.
The answer is that the status quo is probably the worst-case scenario. In a best-case scenario, Trump pushes a Republican Senate to approve the SAFE Banking Act and possibly even more comprehensive business-friendly reforms for him to sign into law.
That’s the hope, anyway, given Trump’s campaign promise in September of supporting the federal rescheduling process, the SAFE Banking Act, and other “common sense laws,” as the president-elect put it at the time. If he does, the next few years could prove transformative for the U.S. marijuana trade, although rescheduling falls far short of full federal legalization in many key business aspects.
Several industry members and trade groups expressed optimism that the returning chief executive will follow through on his September pledge, despite the fact that rescheduling was begun under the Joe Biden administration two years ago.
In point of fact, there had been concern until Trump’s September announcement that he could decide to cancel rescheduling altogether if he won reelection, since the process is under the purview of the U.S. Department of Justice. Theoretically, there’s nothing binding Trump – or whomever he appoints as the new attorney general – from calling off the process entirely, since it won’t be finished until sometime next year, after Trump takes office.
“The cannabis community has every reason to be optimistic with President Trump returning to the White House. He has endorsed the SAFE Banking Act and reclassification of cannabis,” the U.S. Cannabis Council said in a statement on Wednesday. “We look forward to working with his administration to advance meaningful federal reform.”
Los Angeles-based consultant Avis Bulbulyan also noted that “Reform was going to happen within the next administration regardless of who won, the question was more about what that reform would look like.”
With Trump, Bulbulyan predicted, it’ll probably be more of a libertarian-bent reform, compared to what Harris had proposed, which he said may have been federal legalization replete with “overbearing regulations and heavy taxes.”
NewLake Capital Partners CEO Anthony Coniglio said that Trump’s September pledge “sets the stage for potential reform in the upcoming Congress,” but noted that a lot of reforms will still have to get through both the House and Senate, which will likely require some level of bipartisan cooperation. That’s a wild card that has yet to be played: the GOP hasn’t even picked a majority leader in the Senate yet, and control of the House is still undetermined, given that there are several House races yet to be called.
The most likely thing that businesses can expect is more of the status quo, said Tyler Beuerlein, chief strategic business development officer at Safe Harbor Financial, with emphasis put on a state’s-rights approach, which Trump has supported with regard to cannabis policy since his first term in office.
“A Trump Administration will likely place greater emphasis on state autonomy and deregulatory measures, potentially reinforcing a state-led approach to cannabis policy,” Beuerlein said in an email, adding that would mean “significant barriers” for businesses would persist, including in the banking sector, without action from Congress.
The partisan gridlock in both chambers, however, has some stakeholders pessimistic about the odds of federal reform happening anytime soon. That’s one of the reasons that cannabis investment firm Poseidon said in a statement that it thinks the courts may be one of the real avenues to force further change, and that it’s hanging some of its hopes on a federal lawsuit brought by several cannabis companies, that’s set for a hearing with the First Circuit Court of Appeals next month.
“We also remain focused on the Commerce Clause lawsuit, which is likely bolstered by the outcome of the general election. State’s rights and judicial process remains our likely best chances of the biggest change agent for legal cannabis at the federal level,” Poseidon said in a statement.
Of course, it’s also possible that the famously mercurial Trump could decide to swap his position once more, given that several marijuana legalization ballot questions – including in his home state of Florida – failed at the ballot box on the same day he won reelection. Or he could swing the opposite direction, Bulbulyan suggested, and go for complete de-scheduling, which is the industry preference.
Trump has never had a specific policy on cannabis reform, and his first attorney general in 2018, former Alabama Sen. Jeff Sessions, rescinded federal policy memos issued under the Obama administration, in a sign that was taken at the time as broadly anti-cannabis.
But Trump fired Sessions just a few months later, and declined to take any serious action against states that had set up operational marijuana markets, despite the ongoing legal tension between federal prohibition and the state-level marijuana trade. Trump also, near the end of his first term, pardoned several convicts of marijuana crimes, suggesting that he’s quite open to bolstering marijuana reform in general, and by extension, the industry.
The bottom line is there’s no obvious reason for marijuana companies to worry. Although the industry may have been better off with a Harris administration pushing for full federal legalization – and the interstate commerce that would have accompanied such a drastic move – there’s no indication that the new Trump presidency is cause for alarm.
