Will Democratic Plan for Federal Marijuana Legalization be Great for Growers?

The war on marijuana, which started federally in 1937, has claimed millions of victims. Not just the suffering caused by arrest,  trial and imprisonment, but also injuries and deaths at the hands of drug war police and assset forfeiture.

With the 2020 election just around the corner, it’s interesting that federal marijuana legalization is being pushed by Democrats in the U.S. House of Representatives and the Senate via the Marijuana Opportunity Reinvestment and Expungement (MORE) Act.

Sponsored by an unusual coalition of progressive, corporate and conservative Democratic politicians including Democratic Vice Presidential candidate Senator Kamala Harris, the new law would remove marijuana from the DEA’s “controlled substances schedule.”

This isn’t a “schedule” like what you do at specific times of the day. This meaning of the word schedule is a ranked, categorized listing of so-called illicit drugs, with Schedule One containing drugs the DEA falsely claims have absolutely no medical or societal value, and are easy to become addicted to.

As with almost everything the DEA says, their drug schedules are bullshit. Just look at the fact that they group marijuana, peyote, Ecstasy, LSD, Quaaludes, heroin and other substances together in Schedule One, which is the most restrictive schedule containing what they say are the “most dangerous drugs.”

We have to wonder what drugs the DEA people are taking, because anybody with a functioning brain can find solid proof that cannabis, peyote cacti, Ecstasy and LSD have medical usefulness. Indeed, marijuana provides unique symptomatic relief for a variety of serious medical conditions, with far fewer if any negative side effects, compared to pharmaceutical drugs it competes with.

The MORE Act also requires federal government expungement of marijuana criminal convictions. It doesn’t require that states expunge state marijuana criminal convictions. Nor does it require states to legalize marijuana.

So one of the loopholes in the MORE Act is that individual states are free to continue marijuana prohibition, although the law’s sponsors say it contains “incentives” for states to expunge marijuana convictions.

These incentives include programs funded by the federal government that give money to state and local governments so they can give it to eligible members of the community, such as…

*The Community Reinvestment Grant Program: Provides services to people most adversely impacted by the War on Drugs, including job training, re-entry services, legal aid, literacy programs, youth recreation, mentoring and substance abuse treatment
*The Cannabis Opportunity Grant Program: Provides funds for loans to assist small businesses in the marijuana industry that are owned and controlled by socially and economically disadvantaged individuals.
*The Equitable Licensing Grant Program: Provides funds for programs that minimize barriers to marijuana licensing and employment for the individuals most adversely impacted by the War on Drugs.

We view these programs, and expungement, as a form of reparations to the marijuana community for all the crimes committed against us during the War on Drugs. The war on marijuana is a real war with actual casualties, including physical injuries and death.

Being arrested for marijuana almost always creates financial and social hardships for those arrested, even if they aren’t convicted of a marijuana crime.

Worse yet, a marijuana conviction is viewed by mainstream society as an excuse to deny college aid, jobs, housing, medical care, child custody and other societal benefits.

The MORE Act would create other positive changes. For example, it permits Veterans Administration physicians to make medical marijuana recommendations to qualifying veterans who reside in legalized marijuana states.

The MORE Act is an adjunct to business-focused federal marijuana legislation introduced by Democrats in 2019—the SAFE Banking Act—which would allow banks to do business with licensed, legal cannabusinesses.

The SAFE Act passed the House of Representatives, but Republican Senate leader Senator Mitch McConnell is blocking a Senate vote, as he is likely to do to the MORE Act. This means neither of these proposed laws are likely to become actual laws anytime soon.

Marijuana legalization is supported by a majority of Americans. A recent survey even showed that 60% of Republicans support the MORE Act put forward by Democratic vice presidential candidate Sen. Kamala Harris in 2019. The same poll also found that 69% of Democrats, 41% of independents and 54% of Republicans believe use and sale of marijuana should be federally legalized.

Ironically, marijuana legalization would be both good and bad for the marijuana industry, especially black market growers. Federal cannabis legalization is likely to drastically lower marijuana prices in legalized marijuana states that currently allow commercial cultivation and sales, even though the MORE Act levies a 5% federal excise tax on legal marijuana sales.

Federal marijuana legalization would create an interstate marijuana market, increase competition between rival marijuana producers and sellers, and crash cannabis prices, which are already so low in states like Oregon that it’s almost not worth growing marijuana for sale.

The addition of a 5% federal excise tax, combined with decreased marijuana prices, would create financial loss for legalized marijuana states that are deriving significant revenues from state marijuana sales and state taxation.

The proposed law would not legalize personal marijuana growing or end the prohibition on individuals who grow marijuana and sell it without obtaining state and local licenses to do so.

Indeed, one of the biggest criticisms of so-called marijuana legalization is that what it really is amounts to enabling a commercial, licensed, government-authorized, government-taxed marijuana industry…combined with an attempt to destroy the black market marijuana industry.

Marijuana consumers are allowed to buy marijuana from official businesses, but not from individual cultivators who run home-based marijuana growing and retail businesses in the black market.

Indeed, the trend of so-called cannabis legalization in the USA and Canada is to legalize commercial exploitation of the marijuana marketplace, while the government increases its efforts to crush home-based marijuana growing.

Canada’s federal decriminalization of licensed, corporate, commercial cannabis enterprises, for example, was accompanied by increased legal penalties and enforcement against home-based marijuana growers.

Worries about the financial effects of marijuana legalization are complex. When Dennis Peron was able to place medical marijuana legalization on California’s ballot in 1996, most of the state’s black market grower-sellers opposed it, fearing Peron’s proposal would give people the option of growing their own cannabis instead of purchasing it, and would reduce marijuana consumer customers and profits.

Some black market growers even threatened Peron with physical harm if he continued pushing his ballot proposal, which was called Proposition 215.

Prop. 215 was a simple law that allowed you to cultivate as much marijuana as a doctor said you needed. Marijuana grower-sellers feared this would give people the option of growing their own cannabis instead of purchasing it, and would cost them customers and profits.

Many in the marijuana industry voted against Prop. 215, but it passed anyway, becoming the breakthrough marijuana legalization law that spurred the widespread state legalization laws we see today.

Did the fears of California grower-sellers turn out to be justified? Yes and no. Before the California legislature started fooling around with Prop. 215 to create a ridiculous bureaucracy of official state marijuana licensing and business regulations, demand for marijuana skyrocketed.

Many people started growing their own cannabis legally. Some of them also sold marijuana, including to people who had never used marijuana before, and to people in prohibition states (the other 49 states).

The general consensus of opinion is that Prop. 215 put more money into the pockets of marijuana growers and sellers than before it passed.

All that has changed now, with the complicated, draconian, ludicrous regulations, fees, taxes and other garbage enacted as state legalization in California, Washington, Colorado, Oregon and other states.

In some legalized states, white market sellers have to pay steep taxes every step of the way (from cultivation to sale), so their prices are higher than black market prices. This has ensured a surprisingly healthy marijuana black market in some states where legalized cannabis dispensaries are easily found., but legal cannabis costs too much.

From a financial perspective only, marijuana entrepreneurs recognize that prohibition creates the highest marijuana prices and the most profits for growers, processors and sellers. When you can go to prison for growing a plant, most people won’t do it. This keeps marijuana prices high. But the more legalized marijuana becomes, the lower its prices will be.

Reputable economic analysts affirm that if there ever comes a time when federal law and all state laws classify marijuana as a totally legal, unregulated plant, no different legally than tomato plants, cannabis prices will crash to near zero. Tens of millions more people would be growing marijuana and sharing it.

The prohibition-fueled days of marijuana being an exceptionally profitable agricultural crop will be gone forever, and compared to the glory days from the 1980s until early in the 2000s when wholesale cannabis prices were as high as $4000 a pound or more, and retail cannabis was $450 an ounce, they already are gone.

So here we are in the marijuana community and industry, faced with the ultimate ethical dilemma. We enjoy the fact that marijuana’s illegality has made it worth so much more than any other plant. Tens of thousands of growers have paid their mortgages and put their kids through college growing marijuana and marijuana seeds. Some growers and seed sellers became millionaires.

All of us want those profits to keep on keepin’ on, but none of us want the war on drugs to continue. We don’t like it that every year for the past 30 years, police have arrested at least 700,000 of us per year for marijuana “crimes.”

The bottom line is that the more cannabis legalization that happens, the lower marijuana prices will go. If legalization only consists of creating a regulated and taxed commercial marijuana industry, then perhaps adequate profits for some of the vulture capitalists, corporate cannabis entrepreneurs and other profiteers who have entered the legal cannabis industry will continue.

But for those of in the marijuana black market, things will get harder as cannabis prices drop.

How likely is it that the Democrat-sponsored federal marijuana legalization will succeed? Right now, it’s impossible for it to succeed, because Republican Senate Majority Leader Mitch McConnell refuses to consider any legislation sponsored by Democrats, no matter how helpful the legislation is.

Nor is there any indication that current President Donald Trump, who claims he has never used marijuana but would be feeling a lot better right now if he did, would sign a marijuana legalization law if Congress passed one.

During the 2016 campaign, Trump said he backed marijuana decriminalization and had no problem with legalized marijuana states. However, as soon as he became president, he appointed marijuana-hater Jeff Sessions to be attorney general. Sessions promised to rev up the war on marijuana, and get rid of state legalization.

Now that Joe Biden has won the presidency and several more states passed some form of marijuana legalization on 2020’s election day, Senator Kamela Harris becomes vice president, and California’s governor nominates another Democrat to take her place. Harris sponsored the MORE Act, and Biden has indicated support for Harris’ bill.

If Joe Biden retires due to age or medical issues before his first term is over, Harris becomes president, and could immediately remove marijuana from the DEA’s Schedule One via executive order. Of course, Biden could do the same thing.

It’s possible that if all a Biden-Harris administration does is legalize possession of cannabis that it could be a benefit to marijuana growers because it increases demand.

You never know what tomorrow may bring. We’re growing and selling as much premium marijuana as we can right now and will keep on doing it, no matter what the government does.