International Cannabis – Legalize, Regulate, Export

Over the last decade, the United States’ cannabis industry developed into a fully feathered golden goose for the states that have deviated from cannabis’ dated Federal Schedule I drug classification. Even with many industries attempting to rebound from the impact of the Coronavirus pandemic, the American cannabis industry reached a record high of $17.4 billion in sales nationally, as of March 2021.[1] At the international level, there is growing momentum in many countries to address the historical prohibitions against cannabis, and pass legislation that would permit production and consumption in varying forms. Most notably, in 2018 Canada became the first G20 country to legalize recreational cannabis use.[2] Further, as of June 2021, Mexico followed Canada’s example, legalizing private and recreational use of cannabis.[3] With both of the United States’ neighboring nations recognizing the economic benefits of legalization, it is time for American lawmakers to recognize that not only should cannabis be legalized nationally, but the growing international demand will foster the development of an international cannabis market.

Currently, the status of cannabis in the United States, at the state level, can vary from legal, decriminalized, medicinal only, cannabidiol (CBD) only, or fully illegal. At the federal level, it remains a Schedule I narcotic, alongside heroin, ecstasy, LSD, methaqualone, and peyote.[4] There are recent developments, however, in Congress to pass legislation ending federal cannabis prohibition; including the introduction of the Cannabis Administration and Opportunity Act by Senate Majority Leader Chuck Schumer (D-NY) in July of this year.[5] The bill as currently drafted would: de-schedule cannabis by removing it from the Controlled Substances Act; permit the states to enact their own cannabis policies, as they do with alcohol; expunge federal arrest records and convictions for non-violent cannabis offenses; and create a federal tax structure and regulatory framework.[6] The need for change is echoed even at the highest court of United States, with Justice Clarence Thomas stating, “the Federal Government’s current approach is a half-in, half-out regime that simultaneously tolerates and forbids local use of marijuana. This contradictory and unstable state of affairs strains basic principles of federalism and conceals traps for the unwary.”[7] While the American federal government has been attempting to figure out where it exactly stands on cannabis, several other notable nations have enacted legislature purposed towards the eventual regulation and legalization of cannabis.

In May of this year, Switzerland became the first European nation to permit legal adult-use by launching essentially a trial version of their legal recreational cannabis market, with the potential to run through 2031.[8] The significance of Switzerland’s trial, however, is that the newly passed regulations allow for pilot schemes for the legal production, importation, and distribution of cannabis, through regulated cannabis supply chains.[9] The Swiss trial regulations include requirements on participants of the trial, the cultivation of cannabis, how it is processed and refined, and how it is packaged and labeled.[10] While not as encompassing as Switzerland’s steps, progress can also be seen in the growing number of nations permitting medicinal cannabis use, such as Germany, Italy, France, Denmark, and Ireland.[11]

While the regulatory hurdles of legalizing cannabis nationally for the United States are significant, they are not impossible, and as it would appear, are already underway. With the progress and acceptance of cannabis seen at the international level, if the United States moves forward with the legalization and regulation of the cannabis industry, it has the potential to position itself as a global leader in the export of cannabis. The economic benefits to the United States are numerous when considering what is required by legalization, including a considerable new source of tax revenue. This new source of tax revenue is a further important consideration in light of the extensive hyperinflation the United States currently faces. The economic benefits to the United States only increase when considering the export of cannabis. The export of cannabis would require the formation of internationally recognized standards for the production, processing, and packaging of cannabis, as well as the establishment of multilateral treaties between nations desiring to import or export cannabis. While the current legal status of cannabis in the United States is confusing, the way forward in the international arena seems much clearer: legalize, regulate, export.

[1] Will Yakowicz, U.S. Cannabis Sales Hit Record $17.5 Billion As Americans Consume More Marijuana Than Ever Before, Forbes (Mar. 3, 2021, 3:43 PM), https://www.forbes.com/sites/willyakowicz/2021/03/03/us-cannabis-sales-hit-record-175-billion-as-americans-consume-more-marijuana-than-ever-before/?sh=3f58c6352bcf.

[2] Canada Becomes Second Country to Legalise Recreational Cannabis, BBC News (Oct. 17, 2018), https://www.bbc.com/news/world-us-canada-45806255.

[3] Mitchell McCluskey, Mexico’s Supreme Court Decriminalizes Recreational Use of Cannabis, CNN (June 29, 2021, 4:36 AM), https://www.cnn.com/2021/06/29/americas/mexico-cannabis-decriminalization-intl/index.html.

[4] Drug Enforcement Administration, Drug Scheduling (2021), https://www.dea.gov/drug-information/drug-scheduling.

[5] Joshua Weiss and Denver Donchez, The Current Landscape of Federal Law Governing Cannabis, Jdsupra (Oct. 27, 2021), https://www.jdsupra.com/legalnews/the-current-landscape-of-federal-law-7330922/.

[6] Id.

[7] Travis McDermott, U.S. Supreme Court Justice Says Current Federal Cannabis Prohibition is “Contradictory and Unstable,” Jdsupra (July 30, 2021), https://www.jdsupra.com/legalnews/u-s-supreme-court-justice-says-current-8562095/.

[8] Conor O’Brien, Swiss Government Releases Details on Adult-Use Cannabis Pilot Schemes, Prohibition Partners (Mar. 31, 2021), https://prohibitionpartners.com/2021/03/31/swiss-government-releases-details-on-adult-use-cannabis-pilot-schemes/.

[9] Id.

[10] Id.

[11] Jakob Manthey, et al., Public Health Monitoring of Cannabis Use in Europe: Prevalence of Use, Cannabis Potency, and Treatment Rates, The Lancet (Sept. 23, 2021), https://doi.org/10.1016/j.lanepe.2021.100227.