Federal legalization is the end of medical cannabis.

Dear Friend & Subscriber,

Today’s topic is federal legalization of cannabis and the death of medical cannabis as we know it.

As you may have heard, a bill to end federal cannabis prohibition was introduced today on the senate floor by U.S. Senate Majority Leader Chuck Schumer this morning.

Among many aspects of this legislation, the bill would remove cannabis from the controlled substances list, create new federal tax revenues and regulation, as well as fund restorative justice programs and expunge non-violent cannabis arrests.

What you may not realize is that federal legalization of cannabis is the beginning of the end of medical cannabis programs.

Yes, Schumer’s bill allows for states to further regulate cannabis, including maintaining prohibition (in the same way some states remained “dry” even after alcohol prohibition was repealed). But, in the ever-present battle of states’ rights, states would not have the power to enact legislation that circumvented federal laws.

In most states with coexisting medical and adult-use markets, those patients that qualify for medical recommendations are exempted from many of the laws that adult-use customers are subject to.

Medical patients can typically purchase larger quantities at one time, enjoy increased possession and cultivation limits, and avoid adult-use excise taxes that generate the recreational tax revenues that legislators often brag about. For example, as a Colorado medical patient, I can purchase 5x the amount of concentrates, 2x the amount of flower, and 10x+ the amount of edibles as I would be able to as an adult-use customer. And technically, with my patient purchase limit exemption, I could purchase even more than that (at least until HB1317 kicks in January 2022).

The federal government will stop allowing states to maintain medical programs that circumvent federal taxes, limits, and laws.

Sure, they may still allow medical programs, and medical exemptions in extreme cases with a large burden of evidence required (remember, the federal government did at one time have a very short list of patients that it was actively supplying cannabis to, long before legalization), but the “frequent buyer program” that the medical industry largely operates as will disappear.

We are already seeing states gearing up for federal legalization.

As discussed earlier this year, Colorado passed (rather quickly, I might add) HB1317, altering medical cannabis laws in the state to be more restrictive and closer to those of adult-use laws. Regardless of how you feel about these changes, they are being implemented as we speak. By January 2022, Colorado’s medical market will shrink drastically as its limits and regulations are adjusted to be equivalent in many ways to recreational laws.

When I started CannaVenture in 2016 as a Medical Patient, I tried to operate in both recreational and medical markets, and it’s challenging, at best.

As a newly transplanted Colorado resident, I felt that anyone who had been granted state-legal access to cannabis should be able to attend my cannabis hikes. That meant if you were 21+ as an “adult,” or 18+ as a “patient.' By 2017, we had to stop allowing 18+ patients and move to a strictly 21+ environment to avoid logistical nightmares (and legal issues).

It is simply too hard on everyone, from business owners to regulators to those charged with enforcing the laws, to maintain two different systems of legalization.

We have seen that law enforcement in states with legal hemp have had a hard time enforcing cannabis prohibition; they can’t tell (immediately) whether a nug is hemp or pot, let alone test for “legal limits” of THC. Having two systems with two sets of rules creates complications that no market wants to deal with long term. For this reason, regulators and businesses looking to the future of cannabis do not envision it as a dual market but rather a sole, adult market, most closely resembling that of Alcohol.

Rather than address this elephant in the room head on, regulators are quietly tweaking frameworks so that medical cannabis is unnecessary.

It used to be that medical products were cheaper than their recreational counterparts.

It used to be that medical products were higher quality than their recreational counterparts.

It used to be that medical products could be purchased in higher quantities than their recreational counterparts.

One by one, these benefits of being a medical patient are being eroded in the background, while recreational markets are improved to be ever more attractive.

And even more troubling? Data supports these efforts to consolidate the market. According to a survey conducted in April 2021 by the Pew Research Center, twice as many people were in favor of adult-use legalization as were in favor of medical legalization (60% and 31%, respectively).

WHAT THIS MEANS FOR THE CANNABIS INDUSTRY AT LARGE:

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