From rescheduling to state-by-state legalization initiatives to the presidential election, 2024 projects to be another wild ride in politics and the cannabis space.
Marijuana Venture spoke with more than two dozen entrepreneurs and operators in the cannabis space to get their predictions for 2024. Part 3 of this four-part series will cover politics and regulations.
Part 1: Consumer trends
Part 2: Challenges and opportunities
Part 3: Political movement
Part 4: Business operations
POLITICAL MOVEMENT
“2024 should be a breakthrough year for the cannabis industry. With the presidential election, the movement on SAFER, the discussions swirling around rescheduling and what seems like a lot of other positive industry movements, the writing is on the wall for 2024 to be a year where we see major growth and success across the sector.”
KEVIN HART
FOUNDER AND CEO
“Beginning January 1, employers in California will be restricted from taking adverse action against employees or job applicants based on off-duty cannabis use. This new law is much needed protection for cannabis consumers, and we hope that more states begin to follow suit.
The Department of Health and Human Services recommendation to reschedule cannabis to Schedule III was some welcome news, although about a decade late unfortunately. We are hopeful that the federal government takes the steps necessary in the short term to see this change through, but we are realistic in our expectations on timing for implementation. We see an implementation of 12 to 18 months as being a bit more reasonable than the six-month timeline mentioned by some. Schedule III will be a big step in the right direction, though outright descheduling is a far cleaner path for the cannabis industry.”
ED SCHMULTS
CEO
“Cannabis cultivation — especially home grow — will be a big topic in 2024. This is thanks to evolving state laws, such as New York likely allowing home grow starting in 2024 and newly legal Ohio debating its regulations. Home grow should always be a mandatory component of state regulatory frameworks. Allowing individuals to grow cannabis just like they grow their tomatoes is a critical step toward ending the stigma of prohibition. It can also promote sustainable growing practices, while empowering consumers to become smarter shoppers. Just like the craft beer industry created new generations of informed beer drinkers and allowed brands to develop and market new niche brews, home grow can do the same for the cannabis industry.”
SHAI RAMSAHAI
PRESIDENT
“If I had a crystal ball, this is what I believe it will tell us about the next 12 months in the legalized cannabis industry: the forthcoming year will be the most exciting ever in the industry. I foresee the federal government reclassifying cannabis as a Schedule III controlled substance on April 20, 2024. Immediately afterward, Democratic leaders like Senator Chuck Schumer and Senator Cory Booker will hold press conferences and try to take a victory lap. In response, certain members of Congress will attempt to stifle this reclassification and force an egregiously high 14% excise tax, which some will try to prop up as a compromise. President Joe Biden will miss the chance to capitalize on this historic shift in federal policy, allowing Donald Trump and the Republican Party to swoop in and boost their perception among younger voters.
Additionally, I believe hemp-derived Delta-9 THC products and other naturally occurring intoxicating hemp-derived cannabinoids will be forced into regulated channels, closing the Farm Bill loophole. Unfortunately, we will see no SAFER Banking Act progress. Instead, a Garland Memo-like protection will be introduced alongside Schedule III in response to the Boies Schiller Flexnor lawsuit against Attorney General Merrick Garland on behalf of several cannabis companies, creating enthusiasm throughout the industry. Rescheduling alone or rescheduling/memo combo will result in a new wave of liquidity, a surge in M&A activities, equity issuance and refinanced debts that will bail out many who may not survive otherwise. We will also see new companies listed on Cboe Canada. By the time the ball drops and welcomes in a New Year, we will look back at what has been a wild ride in 2024.”
MORGAN PAXHIA
CO-FOUNDER
POSEIDON INVESTMENT MANAGEMENT
“As the cannabis industry eagerly anticipates the potential rescheduling from Schedule I to Schedule III in 2024, we see a transformative shift on the horizon. This change holds the promise of eliminating the burdensome U.S. Code § 280E tax laws, which have long hindered the growth and profitability of cannabis businesses. With this change, many businesses will become profitable overnight, creating opportunities for capital raises, investments in innovation and scaling of existing businesses that are struggling.”
BRIAN WITLIN
VICE PRESIDENT OF PRODUCT
“Rescheduling, 280E and banking will likely still be the primary areas of focus in D.C. 2024 is a presidential year, and those years have been pretty good for the expansion of cannabis legalization within the states. To the extent there are still states where the electorate can make the call on legalization, we might see a few more states put legalization on the ballot. Any movement to expand or legitimize legalization could yield positive results economically for an industry that has felt the impacts of an uncertain economy.”
LEWIS KOSKI
CHIEF STRATEGY OFFICER
“In 2024, legislative reform stands as a persistent theme, with rescheduling emerging as the focal point of unprecedented potential. Rescheduling would remove 280E and radically change the trajectory of the industry overnight. However, a collective effort is imperative; to bridge the gap between anticipation and realization, the industry must unite in a concerted effort to normalize and streamline the supply chain of cannabis sales. In the geographical realm, the momentum of cannabis legalization continues to surge forward in states like Florida and Pennsylvania. However, the dichotomy persists as long-established states such as California grapple with ongoing challenges and headwinds. The contrast underscores the complex and dynamic nature of the cannabis industry, where regional dynamics play a pivotal role in shaping the industry’s trajectory.”
JOHN YANG
CEO