Cannabis Insight | Opposition to rescheduling was inevitable, Deeper Look at PA, Cresco

Rep. Harris Fights Cannabis Rescheduling Despite Global Policy Shifts

Opposition to rescheduling was inevitable. However, there are reasonable counterpoints that highlight perceived flaws, omissions, or outdated assumptions in Rep. Harris's objections to rescheduling cannabis. However, political viewpoints color both sides of this complex debate.  

Republican congressman Rep. Andy Harris (R-MD) expressed significant opposition to the potential rescheduling of cannabis from Schedule I to Schedule III of the Controlled Substances Act (CSA). His opposition is based on a letter sent to the Drug Enforcement Administration (DEA) Administrator Anne Milgram. Rep. Harris's letter to the DEA reflects the intersection of science, law, and international treaties, but primarily a different political ideology surrounding cannabis policy. The ongoing discussion among lawmakers, agencies, and stakeholders underscores the evolving landscape of cannabis regulation in the United States, highlighting the tension between maintaining traditional drug control measures and adapting to changing public attitudes and scientific understandings of cannabis. Here's a breakdown of the main points and the broader context:

Rep. Andy Harris's Opposition

• Against Rescheduling Recommendation: Harris challenges the Food and Drug Administration's (FDA) recommendation for rescheduling cannabis, suggesting it is based on flawed scientific standards.
• International Treaty Obligations: Emphasizes the importance of adhering to international treaties that, according to him, prohibit such rescheduling.
• Concerns Over Scientific Standards: Accuses the FDA of ignoring important factors regarding marijuana's potential for abuse and public health impact.

Context and Counterarguments

• International Treaties: While Harris argues that rescheduling cannabis would violate international treaties, it's noted that the United Nations (UN) has revised global cannabis scheduling policies. Countries like Canada have legalized cannabis without penalization.
• FDA's Justification Questioned: Harris criticizes the FDA for not examining daily use, traffic fatalities due to impairment, and not comparing marijuana's potential for abuse adequately with other drugs.
• Push for DEA to Maintain Current Scheduling: Harris's letter is part of a broader debate, with different lawmakers urging the DEA to either reschedule cannabis, deschedule it, or maintain its current classification.

Legislative and Political Landscape

• Bipartisan Interest in Cannabis Policy Reform: Despite Harris's opposition, there's growing bipartisan interest in Congress for reforming federal cannabis laws, including banking reforms and calls for rescheduling or descheduling.
• Administrative Actions: The DEA is under pressure to make a final decision on cannabis scheduling, with input from both proponents and opponents of reform.
• Public Opinion and Potential Political Impact: Public opinion increasingly supports cannabis reform. Rescheduling or descheduling could have significant political implications for those in office.

Broader Implications

• Impact on Federal Cannabis Policy: The outcome of this debate could significantly impact how cannabis is regulated at the federal level, affecting everything from criminal justice to public health and economic opportunities in the cannabis industry.
• State vs. Federal Law Conflicts: Any changes in federal cannabis scheduling could impact the ongoing conflict between state-level legalization and federal prohibition, potentially leading to a more harmonized approach.

HEDGEYE VIEW - Here are some potential counterarguments to Rep. Harris's opposition to rescheduling cannabis:

International treaties - While Rep. Harris argues rescheduling would violate international treaties, counterarguments could note that:

• Many countries are revising their cannabis laws without facing penalties, suggesting flexibility in the treaties. For example, Canada and Uruguay have legalized cannabis despite being signatories.
• The UN itself has revised its scheduling recommendations regarding cannabis, signaling a shifting global perspective.
• Adhering rigidly to outdated treaty terms should not outweigh domestic public health and social justice imperatives.

FDA's analysis - Counterarguments are:

• The FDA conducted a scientifically rigorous eight-factor analysis, as required by statute, to justify its rescheduling recommendation.
• Concerns like traffic fatalities are valid but not directly related to scheduling determinations per the CSA criteria. They can be addressed through targeted public policies.
• The FDA compared cannabis abuse potential and considered daily use rates appropriately within statutory constraints.

Political motivation 

Some could accuse Rep. Harris of being swayed by ideological opposition to cannabis reform rather than evidence-based policymaking. His stances align with historical and outdated "War on Drugs" views.

Green Horizons: Navigating the Future of Cannabis Legalization in Pennsylvania

I think PA will go recreational, but it is not a given

Pennsylvania's path to legalizing recreational marijuana is marked by a juxtaposition of medical success stories, political deliberation, and economic potential against a backdrop of regional legalization trends. As the state navigates these waters, the experiences of individuals benefiting from medical cannabis, combined with lessons learned from neighboring states, offer valuable insights. The dialogue between lawmakers, healthcare professionals, and the public continues to shape the future of cannabis policy in Pennsylvania, with a cautious yet inevitable move toward legalization.

Medical Marijuana Success in Pennsylvania

• Legalization Timeline: Pennsylvania legalized medical marijuana in 2016, offering significant relief to patients with severe medical conditions. 
• Medical Marijuana Card Process: Obtaining a medical marijuana card involves registration, physician certification, and an annual renewal fee. While the state has streamlined the process, the costs and bureaucratic steps are considered burdensome by some patients, highlighting the benefits a recreational market could offer regarding accessibility and convenience.

Challenges to Recreational Legalization

• Political Landscape: Despite a Democratic majority in the state House and a supportive governor, legislative hurdles persist. Efforts by lawmakers such as Rep. Dan Frankel (D-Allegheny) aim to build consensus around a comprehensive bill. Still, the process is slow, reflecting the complexity of transitioning to a regulated recreational market.
• Regulatory Considerations: Key concerns include regulating the marketplace, licensing, packaging, preventing minor access, and ensuring integration with the medical market. Public hearings and consultations with experts from other states are part of the strategy to address these challenges thoughtfully.

Comparative Analysis with Neighboring States

• Regional Context: With states like New Jersey, New York, Delaware, and Maryland moving forward with recreational marijuana, Pennsylvania faces competitive pressure and a blueprint for potential success. Learning from these neighbors' successes and missteps is crucial in shaping Pennsylvania's approach.
• Economic and Social Implications: Legalizing recreational marijuana is an economic opportunity for the state, promising quality control, law enforcement resource optimization, and revenue generation. Yet, the slow pace of legalization reflects caution against potential societal impacts and the desire to establish a robust regulatory framework.

Legislative Efforts and Future Prospects

• Senate Bill 846: Introduced by Senators Daniel Laughlin (R-Erie) and Sharif Street (D-Philadelphia), this bipartisan bill represents a tangible step toward legalization but faces legislative obstacles. Its progress will be crucial to the state's political will to embrace change.
• Public Opinion and Advocacy: A narrative shared by many state residents underscores a growing public sentiment that favors legalization, not just for accessibility and economic reasons but also for the potential to address broader societal issues related to substance use.

Hedgeye View - Recreational cannabis legalization will likely occur in Pennsylvania but remains contingent on overcoming lingering political and policy hurdles. I think our view aligns with the nuances involved in this issue. Here are a few key factors that support our perspective:

1. Momentum from neighboring states legalizing could pressure Pennsylvania to follow suit, but each state has unique political and regulatory considerations. Geographic trends do not dictate outcomes.
2. Strong medical cannabis success and personal stories could continue shifting public opinion toward recreational legalization. However, some lawmakers/constituents have lingering doubts about broader societal impacts.
3. Economic and tax revenue benefits appear increasingly compelling, but regulators must ensure proper market oversight safeguards. Recreational legalization cannot sacrifice prudent policymaking.
4. While the bipartisan Senate Bill 846 proposes a recreational framework, legislative disagreements on allowing home grow could hamper its passage. Compromise is problematic on a complex, multi-faceted topic.

Cresco Labs Positions for Future Cannabis Growth with New President

Cresco Labs has promoted Greg Butler to the position of President. This recognizes his past contributions and prepares the company for the future cannabis industry. As President, Butler will oversee all of Cresco Labs' operations, including production, retail, marketing, corporate planning, and investor relations. Butler joined Cresco Labs in 2020 as Chief Commercial Officer after advising the company since 2018. He has helped innovate and professionalize many aspects of the business. Butler has over two decades of experience leading major brands for large and small companies.