On 04/14, we hosted our quarterly Cannabis Legalization call with Zander Abrams, the Founder of the Cannabis Policy Forum.
Cannabis/Consumables Pro Subscribers CLICK HERE for event details (includes video and materials link)
Notes from the Call:
Washington Update
Framing the policy - Progressives focus on "equitable legalization." This means they want to use the legal cannabis industry to advantage communities most harmed by the War on Drugs.
Current Roster of cannabis legalization measures
- MORE Act- Passed the House - Strictly partisan. It doesn't have any Republican support, and Schumer won't support it.
- CAOA- Purely partisan, Includes a 25% federal excise tax, The holy grail for Schumer and Booker, The reason why they torpedoed SAFE Banking at the end of 2021
- STATES REFORM- No chance this session, Nancy Mace has become a star, only a 3% excise tax rate, treats cannabis more like alcohol, Co-sponsors –> McClintock, Mast, Peter Meijer, and Don Young** passed away last month
- HOPE- Focused just on expungements
- SAFE Banking, No chance of passing, currently over 700 financial institutions in the US that admit to servicing the cannabis industry in some way, Failed as stand-alone, Janet Yellen “It’s an important issue – and it’s an extremely frustrating one that we haven’t been able to resolve it,” “We’ve worked with you on this bill. We’re supportive of it.”
California
- The biggest problem is that California is a retail desert.
- It has 930 active dispensaries with a population of 40,000,000 people - It needs 4,000 dispensaries to serve the legal market to reach a 1:10,000 ratio.
- Proposition 64 gave a lot of power to the cities; What is evident is cities can opt-out; What is less apparent is municipal control over licensing, which has been slow and riddled with. Policy Solution: Increase speed in issuing licenses
- Gov' Newsom issued $100m to support new licenses.
- In Q1 '22, CA issued 80 licenses (March was 31, the best month ever) -> in 2020, and CA issued 96; 30 a month would bring us to 1200 by EOY 2022 and 1500 by EOY 2023. Still not enough.
- Three hundred cities still have failed to license even a retail, medical cannabis business. And so, there needs to be a policy push with those municipalities.
- Taxes - Among the highest in the nation. The product gets taxed three times before it hits the end consumer, paying around a 35% tax.
