Cannabis businesses: Essential

A new look for an industry that remains burdened by legal constraints and public perception

In the face of a global pandemic, much of the world seems to have shut down; schools have transitioned to remote learning, stores and restaurants have closed their doors and people who still have their jobs are working from home. The only operations that have continued to run on schedule are the ones that have been declared “essential.”

Essential services include, of course, hospitals, pharmacies, grocery stores, gas stations, law enforcement, energy, water and infrastructure. The list is meant to include only those services that keep the world spinning. Each state that has issued a stay-at-home order has its own list of essential services, but in 29 of the 33 states that allow medical or recreational marijuana, cannabis dispensaries have made that list.

Amid the chaos of crisis, the cannabis industry has proven to be essential.

The most important legal questions surrounding the sale of cannabis products have been left unanswered for some time now. Although 33 states and the District of Columbia have approved the sale of medical marijuana and 11 states and the District of Columbia allow recreational use, the federal government still lists cannabis as a Schedule I drug in the Controlled Substances Act, which does not recognize any difference between medical and recreational use.

As states continue to shift away from criminalization of the product, is it possible that the COVID-19 pandemic could serve as a turning point for the cannabis industry? What do those same legal questions look like after a return to normalcy?

Some lawmakers believe that a shift in the perception of cannabis may be on the way, including Rep. Earl Blumenauer (D-Ore.), who told Politico: “This is something that makes a huge difference to the lives of hundreds of thousands of people every day. I do think that this might be part of a turning point.”

As legalization progressed, it was anticipated that small shifts in the nature of business would be implemented over time; the idea that dispensaries are akin to pharmacies and should operate through similar practices, yet with a heightened level of scrutiny, would begin to take hold over a span of years. However, the crisis at hand may have jumpstarted the legalization process by changing the perception of cannabis in three major ways: publicly, culturally and, of course, legally.

Cannabis shops in Denver and San Francisco closed during the early stages of the outbreak, only to reopen in both cities after “crowds swarmed” the dispensaries, as reported by Fox News. There have been numerous reports of a major uptick in cannabis sales, though it could be argued that a stockpile mindset contributed to those numbers, especially in areas where closures were announced.

Even in places that declared cannabis businesses to be essential early on, retailers experienced a spike in sales prior to stay-at-home orders taking effect. The public perception of cannabis products may not have changed entirely, but their acceptance is certainly clearer when illuminated by the stay-at-home orders issued over the previous weeks.

Further, and maybe more importantly, the cultural perception of cannabis looks to be evolving. The medical community, no doubt, has a major effect on this shift. The states limiting cannabis products to medicinal use greatly outnumber the states that also allow for recreational use, and thus will surely have a larger impact on the future of legalization. Doctors across the country are advocating for the use of medical marijuana, specifically for those who suffer from chronic pain brought on by disease or malaise. As a result, cannabis users in states that have closed dispensaries are without the pain medication they have been recommended by their doctors, many of whom would argue that such medication is crucial to the patients’ continued welfare. Still, those states are in the vast minority. As noted, all but four states that have legal marijuana programs of some kind have declared the product to be essential, which gives the cannabis industry an important argument in its battle for recognition and legalization.

The cultural perception of cannabis is quickly moving toward an understanding that this is a medicine like any other and, as such, is just as essential to a frozen world as anything else you can buy at the pharmacy.

Legally, there have been long strides taken on the basis of necessity in the last few weeks that may have spanned years under other circumstances. In an article from the Green Market Report, Cynthia Salarizadeh notes that increased delivery of cannabis over the last month represents a major shift of services, with legal ramifications: “States like Louisiana, Pennsylvania and NJ, among many more, have changed their cannabis rules almost completely to allow for either delivery or curbside pick-up. It would have normally taken years to have these services accepted and implemented.”

In the face of adversity, the law has stretched to accommodate the needs of its citizens. Governors and mayors across the country have declared those needs to include cannabis products during the COVID-19 crisis, but how will those declarations affect the industry at the other end of these trying times?

The ultimate question that arises is this: If the cannabis industry is important enough to be declared essential in the face of the most serious pandemic in the modern era, should it be considered any less essential when normalcy attempts to make its return?

 

Kay Barnes Baxter is the managing partner of Foley & Mansfield’s New Orleans office and a member of its national cannabis practice group. She is a seasoned litigator with extensive experience defending cases involving a wide range of products and manufacturers. She can be reached via email at kbaxter@foleymansfield.com.

Travis Grosscope also contributed to this article. He is a second-year student at Tulane University Law School and began clerking at Foley & Mansfield in June 2019. He is a member of the Tulane Sports Law Society and the Tulane Entertainment & Arts Law Society.

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