The United States has come a long way since California’s legalization of medical cannabis in 1996. In 2012, Colorado and Washington became the first states to legalize recreational cannabis. As of June 2025, 40 states, three territories and the District of Columbia allow for medical use of cannabis products, and 24 states, three territories and the District of Columbia allow adult-use cannabis for non-medical purposes. Although the country has seen rapid change over the course of the last two decades, the country has not settled on a uniform set of standards for the legalization of cannabis, as states from coast to coast have different legalization legislation, criminalization potential and regulatory requirements.
Other countries with full medical and recreational cannabis legalization have a lot to teach the United States — full legalization allows for safer regulation requirements, business and economic growth, standardized testing and packaging, safer banking and more. It’s time to make cannabis less of a taboo topic, and more of a unified, regulated benefit.
Varied State Laws and Regulatory Requirements Leads to a Haze of Uncertainty
The United States has varied cannabis laws and regulatory requirements across different states, which can cause significant confusion. Under federal law, cannabis is illegal, so it is up to individual states to determine what, if any, safety standards and other regulations to implement. When a cannabis product is brought to a lab, each state has different rules, so there is not “any level of comfort for the numbers that they’re putting out,” said Anna Schwabe, a cannabis geneticist and researcher, in a 2023 Stateline article. Most states, but not all, require legal cannabis products to be tested for potency and contaminants; however, a lack of regulatory standards leads cannabis producers to go “lab shopping,” where they can test at different labs until they obtain clean results.
States have had to issue recalls for harmful contaminants, such as mold, salmonella, or E. coli, after some products have been released. For example, the Oklahoma Medical Marijuana Authority issued a recall in 2022 for 99 medical cannabis products from alleged lab violations. An emergency order ensued, immediately suspending the medical cannabis business license, and 33 businesses were alerted to the 99 products that were included in this recall.
When cannabis was legalized in Canada, the Cannabis Act was created to provide a strict legal framework for controlling production, distribution, sales and production across the country. The Cannabis Act created uniform and clear safety and quality regulations to define what type of cannabis products are available, how each should be packaged and labeled, standardized serving sizes, prohibition of certain ingredients, tracking requirements to ensure the presence of no illegal markets and restrictions on promotional activities. Although there are nationwide regulations in place, each providence and territory is responsible for enforcement to oversee the sale of cannabis, including creating their own safety measures, such as increasing minimum age, lowering possession limit, creating additional rules at home, and restricting where adults can consume cannabis.
In the United States, packaging requirements also vary state by state. For example, most cannabis regulations require the packaging to be child-resistant, but only two states require packaging to protect the product from possible contamination from toxic substances. Only nine states require the packaging to have no resemblance to commercial food products. Two states require the products to be in plain packaging, while one state does not allow the packaging or containers to be shaped to resemble animals, fruits, or humans (FL Stat. 381.986(15), N.H. Admin. Code He-C 402.19(b)(1)).
Additionally, different states have different advertising requirements. For example, three states do not have any broadcast restrictions, while 13 states restrict broadcasting advertisements of adult-use cannabis. Vermont requires licensees to submit advertisements for regulatory approval prior to showing the advertisement (Vermont St. 7-33-1 § 864(e)). Six states prohibit the use of therapeutic claims in cannabis advertising, but seven states require the claims to be substantiated (The Network for Public Health Law; Alaska Admin. Code tit 3 § 306.770; 410 Ill. Comp. Stat. 705/55-20 (2019); 18-691-1 Me. Code R. § 5.2; NY Can. § 86 (2022); Or. Admin. R. 845-025-8060; Wash Admin. Code § 314-55-155 (2013); RCW 69.50.369).
Similar to Canada, Germany passed the Act on the Controlled Handling of Cannabis and Amending Other Provisions. The German Cannabis Act requires all packaging to include health risks and counselling treatment agency information on the package. The packaging must also be childproof and neutral with no promotional design. The German Cannabis Act also has a general ban on advertising and sponsorship by cannabis and cultivation associations. This ban includes social media content.
Canada and Germany show us that national legalization provides more protections, less confusion, and a united approach to health and safety.
Conflicting State Regulatory Laws Cloud the Path for Growing Businesses: A Green Light for Legalization Could Mean Billions in Economic Growth
Businesses operating across state lines deal with uncertainty on regulatory requirements. Despite an overwhelming majority of states allowing cannabis sales and use at some level, cannabis is still classified as a Schedule I substance under the Controlled Substance Act, alongside heroin, ecstasy, and LSD (21 U.S.C. § 812).
In 2023 alone, the cannabis industry created nearly 23,000 new jobs. By 2024, there were 440,445 full-time jobs supported by the legal cannabis market, according to the Vangst 2024 Jobs Report.
Of the top 10 largest legal cannabis markets in 2023, the United States was No. 1, bringing in $28.8 billion in 2023, which was a 10.3% increase from 2022. By 2027, the United States cannabis market projects retail sales reaching $53.5 billion. From April 2023 to March 2024, Canada’s total cannabis sales brought in $5.2 billion, which was an increase of 11.6% from 2022–2023.
Federal recreational legalization would create the economic benefits of state and federal tax revenues, job creations, labor force participation and workers compensation benefits. Post legalization, states saw an increase in tax collection that are directly related to cannabis sales, according to a report by Federal Reserve Bank of Kansas City.
The prohibition of cannabis leads to direct costs to police, lawyers, judges and correctional resources. Not only does it cost more money, but there are no taxation benefits from the production and sale of illegal cannabis. Legalizing cannabis supports various issues, but some examples include supporting law enforcement, education, local government, general funds and substance use and abuse education.
In Canada, legalization has been associated with a significant reduction in cannabis-related offenses among youth. There was a 62.1% decrease in cannabis-related offenses among females, and 53% reduction among male police-reported cannabis-related offenses. There was no evidence of association between cannabis legalization and property, or violent crime increases. Among adults, there was a decrease of police-reported cannabis-related offenses by 73.9% for females and 83.2& among males.
Canada is one example leading the discussion of cannabis-related offenses diminishing among youth and adults with the legalization of cannabis.
Banking Protections Pave Way for Secure, Transparent Cannabis Market: More Change Leads to More Taxes
In 2021, United States Senators Cory Booker, Ron Wyden and Chuck Schumer proposed the Cannabis Administration and Opportunity Act as a discussion draft, which would remove cannabis from the list of controlled substances, impose a federal excise tax on cannabis products, contain decriminalization provisions, and allow state-compliant cannabis businesses to have access to financial services, such as bank accounts and loans. This draft is a step toward a comprehensive regulatory scheme, but it creates more questions than answers. Federal agencies provide guidance for regulatory oversight, insurance, and access to funding and payment systems to state and federal banks, but because cannabis remains a federally illegal substance, financial institutions that provide banking to state cannabis businesses may still be subject to criminal and civil liability under the Controlled Substances Act. Criminal and civil liabilities inhibit the willingness of financial institutions to provide financial services, such as opening accounts, accepting credit cards, and authorizing electronic transfers, to legal cannabis businesses.
The Secure and Fair Enforcement Banking Act (SAFE Banking Act) of 2023 was introduced, but not passed. This legislation would have provided protections for federally regulated financial institutions that serve state-sanctioned marijuana businesses. This bill would prohibit a federal banking regulator from penalizing banks for providing banking services to a state-sanctioned marijuana business (H.R.2891–118th Congress (2023-2024)).
All states that allow adult-use cannabis tax its sale. States can levy sales taxes, excise taxes or both. Each state taxes a different amount, ranging from 3% municipal sales tax in Connecticut, up to 37% in Washington, and some states tax cannabis by weight or amount of THC (Connecticut Code 214c Section 12-330, RCW 69.50.535, Tax Foundation). Most of these taxes go to regulation and state general funds, state and local government, substance misuse treatment programs, education and public safety. A study from 2017, when only 29 states had legalized medical cannabis — with eight of those states having regulated both recreational and medical cannabis — reported that states with legalized cannabis were on track to generate $559 million from cannabis taxes in 2017.
If the United States would allow federal legalization of cannabis, it would help create safer banking laws, build international relations with United States banks in foreign countries, and cause less confusion.
Dormant Commerce Clause: A Constitutional Check on State Trade Restrictions
The Commerce Clause gives Congress the ability to regulate commerce among the states (U.S. Const. Art. I Section 8 Clause 3). Courts have determined that states cannot unjustifiably burden interstate commerce for the benefit of their own economic interests (New Energy Co. v. Limbach, 486 U.S. 269 (1988)). In 2005, the Supreme Court first decided that application of the Controlled Substance Act provisions “criminalizing manufacture, distribution, or possession of marijuana to intrastate growers and users of marijuana for medical purposes did not violate Commerce Clause” (Gonzales v. Raich, 545 U.S. 1, 125 S. Ct. 2195, 162 L. Ed. 2d 1 (2005)). Because cannabis is federally illegal, but legal in certain states, there is an aggressive interstate market for cannabis, and court decisions have been unclear with respect to Commerce Clause implications.
In 2022, the First Circuit Court determined that the Dormant Commerce Clause applies to cannabis industries — even though it is illegal under federal law — when state law permits cannabis businesses, but only when owned by state residents meeting various requirements. The court reasoned that residential requirement for cannabis business ownership does violate the Dormant Commerce Clause, arguing that states should prohibit dispensaries altogether if they do not want them, instead of protecting those run by state residents (Northeast Patients Group v. United Cannabis Patients and Caregivers of Maine). Other states, such as Michigan and Missouri, have drawn similar conclusions, issuing preliminary injunctions that block the enforcement of marijuana license residency requirements (Lowe v. City of Detroit 544 F. Supp. 3d 804 (E.D. Mich. 2021), Toigo v. Department of Health and Senior Services 549 F. Supp. 3d 985 (W.D. Mo. 2021))).
On August 12, 2025, the Second Circuit determined that New York violated the Dormant Commerce Clause by favoring its residents over others. In New York, anyone is allowed to apply for a cannabis license, but the New York law gives special priority to certain individuals, including members of the community that have a cannabis-related offense under a former New York prohibition. The court determined that the Dormant Commerce Clause prohibits state protectionism unless Congress authorizes the law, and Congress gave no permission for New York to favor its own residents (Variscite NY Four, LLC v. New York State Cannabis Control Board).
The Dormant Commerce Clause concern further proves that national legalization would halt confusion, encourage business growth, and increase funds in every state.
As acceptance of the cannabis industry grows, it is clear that the once stigmatized plant has become an economic benefit to many states in the United States. Legalizing cannabis at the federal level would not only unify state laws but also allow comprehensive and safe regulation requirements.