DEA Set to Green Light Cannabis Legalisation?

Public support of legalising cannabis at the federal level – lifting prohibition – has been increasing. Could the latest report from the DEA support this trend?

The winds of change continue to blow in the United States, as around nine-in-ten Americans favour legalisation for recreational and/or medical purposes.

In November last year, Pew Research released the results of their most recent poll regarding cannabis legalisation. The results showed that over two-thirds of the US population was in favour of legalising cannabis at the federal level. More than that, those that had been opposed to legalisation dropped from 52% in 2010 to only 32% in 2019.

US Cannabis Industry
Source: Pew Research

As America warms to the idea of the lifting of prohibition, so there are a number of bills in the House and Senate that are looking to create stability in the industry as a precursor to full decriminalisation or legalisation.

These include the SAFE Banking Act which will bring certainty to the rules and regulations that govern what commercial banks can and cannot do when it comes to serving cannabis-centric companies and clients. The Act will allow cannabis companies access to basic banking services that they are currently restricted from accessing.

The MORE Act is looking to decriminalise cannabis at the federal level and to right the injustices of a war on drugs that has targeted minority communities, devastating families and ruining lives.

In December 2018, President Trump signed the Farm Bill of 2018, which legalised hemp for industrial and commercial production, and with it, opened up a booming hemp-derived CBD market.  The Farm Bill did not legalise marijuana though, which remains a Schedule 1 drug and hence illegal at the Federal Level. However, that may be set to change.

Last week, the Drug Enforcement Administration (DEA) acknowledged in a report that state-level marijuana legalisation actually reduced instances of illegal interstate drug trafficking. In its performance budget submission to Congress for the fiscal year 2021, DEA gave an overview of its enforcement efforts and made predictions about future trends.

A very long and detailed document, that can be found here, did, however, contain a very subtle admission from the DEA, that legalising marijuana would have an impact on consumer demand and purchase from the black market.

"After the 2017 legalization of medical marijuana in Florida resulted in retail distribution centres throughout the [area of responsibility], the legalization of low-Tetrahydrocannabinol (THC) (10%) smokeable medical marijuana in March 2019 is anticipated to lead to a growing market for Florida-sourced low-THC marijuana."

Yet, until high potency marijuana becomes legalized in Florida, we believe the impact will be minimal on the demand for high-THC marijuana from California and other states," it continued. "Until then, the potential for abusing current law remains a possibility due to the difficulty in detecting THC potency by law enforcement.US Drug Enforcement Agency (DEA)

Dissecting the above in more detail reveals two interesting insights.  First off it would seem that the DEA recognises the fact that people would prefer to purchase cannabis for recreational use through legal outlets and dispensaries rather than sourcing it via the black market. This is particularly relevant when one considers the recent vaping crisis that spread throughout the US in 2019.

The crisis, led to Anne Schuchat, principal deputy director of the CDC, during a press call on October 25th, calling the injury EVALI, an acronym for "e-cigarette, or vaping, product use associated lung injury.

Anne Schuchat Principal Deputy Director of the CDC
Anne Schuchat Principal Deputy Director of the CDC

Symptoms could include a cough, shortness of breath, chest pain, nausea, vomiting, diarrhea, fatigue, fever, or abdominal pain. Some people developed the symptoms suddenly, over a few days, while with others it was a slow buildup over a few weeks.

More than 2800 cases of EVALI have been reported to the Centers for Disease Control and Prevention (CDC) as of Jan 21, 2020, and among those, there have been 60 deaths. This had a massive impact on the industry as vaping – the most popular form factor – accounts for nearly 60% of sales in legal states.

In the end, the CDC acknowledged that the issue arose from consumers purchasing cartridges on the black market. This further intensified the call for regulation, legalisation and standardisation of production and testing.

Secondly, and potentially more significant, the use of the words "until then" potentially signify that the DEA acknowledges that they are going to have to – at some point – legalise can Abis at the federal level and protect consumers from the black market.

Justin Strekal, political director of NORML, told Marijuana Moment that DEA's conclusion is "obvious." Strekal also observed that the word "until"—rather than "if," for example—shows that the Justice Department is cognisant of what's increasingly viewed as the inevitability of legalisation.

"Their framing clearly indicates that the days of prohibition are nearly over," he said. "We are living through the death rattles of prohibition."

Get the Latest Marijuana News &
Content in your Inbox!

All your support helps The Green Fund keep writing content for all you
marijuana enthusiasts and potential pot stock investors

Mark Bernberg
Mark Bernberg

Mark Bernberg is a long-time cannabis investing enthusiast and founder of The Green Fund, Asia Pacific's preeminent media house, positioned at the forefront of the global cannabis industry.

Leave a Reply

Your email address will not be published. Required fields are marked *