Cannabis Legislation in 2024: What It Means for the Industry

The year 2024 is shaping up to be a pivotal one for cannabis legislation in the United States. With ongoing debates over federal reform, state-level initiatives, and bipartisan support for key bills, the cannabis industry stands at the precipice of transformative change. This article explores the legislative developments anticipated in 2024 and their potential impact on the cannabis sector nationwide.

Federal Legislation on the Horizon

Rescheduling Cannabis

One of the most significant federal developments in 2024 is the ongoing debate over cannabis rescheduling. The U.S. Department of Health and Human Services (HHS) recommended in late 2023 that cannabis be reclassified from a Schedule I to a Schedule III substance under the Controlled Substances Act. If adopted by the Drug Enforcement Administration (DEA) in 2024, this change could have far-reaching implications:

Taxation Relief: Businesses would no longer face the burdensome 280E tax provision, which prohibits tax deductions for expenses related to Schedule I and II substances.
Research Expansion: Easier access to cannabis for scientific study would open the door to groundbreaking medical research and innovation.
Investment Opportunities: A reclassification could signal federal acceptance, encouraging institutional investors to enter the market.

SAFE Banking Act

The Secure and Fair Enforcement (SAFE) Banking Act remains a cornerstone of cannabis reform. Expected to make significant progress in 2024, the bill aims to provide cannabis businesses with access to traditional banking services. If passed, it would:

Reduce reliance on cash transactions, improving safety and transparency.
Streamline operations for dispensaries, cultivators, and ancillary businesses.
Increase financial accessibility, allowing small and minority-owned businesses to thrive.

Comprehensive Legalization?

While federal legalization remains uncertain, 2024 could see a broader discussion around national regulation. Proposed bills like the MORE Act (Marijuana Opportunity Reinvestment and Expungement Act) and the CAO Act (Cannabis Administration and Opportunity Act) seek to:

Remove cannabis from the Controlled Substances Act entirely.
Establish a federal tax and regulatory framework.
Address social equity issues by expunging past convictions and reinvesting in communities disproportionately affected by prohibition.

State-Level Initiatives

At the state level, cannabis legalization continues to gain momentum. In 2024:

Ohio and Florida are expected to vote on recreational legalization initiatives, potentially bringing two key states into the fold.
Texas could expand its medical cannabis program, reflecting the state’s gradual shift toward acceptance.
Maryland will fully implement its recreational market, offering a template for other states transitioning from medical-only frameworks.

Industry Impact

The legislative changes anticipated in 2024 could reshape the cannabis industry in several ways:

Increased Investment

Rescheduling and banking reform would reduce financial and regulatory risks, attracting institutional investors and accelerating industry growth. The influx of capital could lead to consolidation, innovation, and the expansion of multi-state operators (MSOs).

Growth in Social Equity Programs

Many proposed laws emphasize social equity, ensuring that communities disproportionately affected by the War on Drugs benefit from the legal cannabis market. Expungement provisions and grant programs could foster a more inclusive industry.

Market Expansion

New state-level legalization efforts and improved federal regulations could unlock new markets, boosting sales and generating tax revenue. The U.S. cannabis market is projected to exceed $50 billion by 2028, and 2024’s reforms will play a critical role in reaching that milestone.

A Transformative Year

The legislative developments of 2024 have the potential to usher in a new era for the cannabis industry. As federal and state governments continue to align public policy with shifting societal attitudes, the U.S. cannabis market is poised for unprecedented growth. Whether through rescheduling, banking reform, or new state initiatives, 2024 promises to be a landmark year for cannabis legalization and its broader impact on the nation.