Pot Push to Put Social Justice in the Spotlight: Cannabis Weekly
(Bloomberg) -- Democratic control of the U.S. Senate already means pro-cannabis laws have a better shot this year. It’s also poised to boost the industry in a less direct way -- by amping up traction for social justice issues.
With marijuana-related arrests disproportionately affecting minorities, the cannabis industry has for years raised social justice as a reason to legalize the substance. Cowen analyst Jaret Seiberg sees arguments over racial and economic equity becoming even more urgent under a newly empowered Democratic Congress.
“Democrats view the social justice aspects of legalization as more important than the commercial aspects,” Seiberg said in a Jan. 28 note. In fact, equity issues may be the means by which legalization can happen, he said. Instead of haggling over the current legislative proposals -- the States Act, which would cede legalization to individual states, or the MORE Act, which would fully decriminalize cannabis -- the equation could be flipped.
“Rather than have a cannabis bill, there could be a broader social justice measure that includes police reform and civil rights measures,” he said. “Cannabis would be attached to it.”
Social justice has become a cause celebre of the cannabis industry, and for good reason: Black people are almost four times more likely than White people to be arrested for marijuana possession nationwide despite comparable usage rates, according to the American Civil Liberties Union. And there’s a long and ugly racial history behind cannabis prohibition, including racist comments from Harry Anslinger, the first head of the Federal Bureau of Narcotics. There’s also the supposed origins of the word “marijuana” itself -- which largely replaced “cannabis” in popular usage in the early twentieth century amid efforts to associate it with Mexican immigrants.
As the Black Lives Matter movement has risen in prominence, social justice arguments to legalize cannabis have gained more lobbying clout. Grants have been proposed as a way to help minority entrepreneurs compete in the newly legalized business, and there are calls for state licensing rules to ensure a diverse range of applicants get a shot at participating in new cannabis wealth.
There are still some hitches, including the prospect of a Senate filibuster. Despite Democratic control of the chamber, cannabis legislation would still need support from at least 10 Republicans as long as the controversial filibuster still exists.
Seiberg suggests the battle may even prompt Democrats to repeal the filibuster. At the very least, the threat could force both parties to the negotiating table to discuss the social impact of cannabis laws.
NUMBER OF THE WEEK
- 3.8%: The approximate portion of the 10,269 summonses for marijuana issued in 2020 that went to White individuals, as calculated from New York City Police Department data.
QUOTE OF THE WEEK
“We know White New Yorkers are using cannabis more, but there are less people apprehended for doing it. It’s a wildly disproportionate application of the law,” said Natalie Papillion of the Last Prisoner Project, a criminal justice reform group.
WHAT YOU NEED TO KNOW
- New Mexico’s governor called on the state to legalize recreational cannabis as a way to reduce its dependence on oil.
- Mexico’s interior minister said the country would legalize marijuana production in the coming months.
- The IRS’s latest list of top guidance objectives didn’t include the part of its tax code that the cannabis industry has been rallying to undo -- Section 280E that bars cannabis companies from taking deductions and credits.
- Massachusetts marijuana retailers dropped their lawsuit over regulations aimed at bringing more equity to the cannabis industry by helping people of color and those with low incomes start their own marijuana delivery businesses.
- Heavily-shorted cannabis company Sundial Growers was among the stocks caught up in the Reddit-fueled retail trading frenzy.
- InterCure Ltd., the Israeli cannabis producer whose chairman is former Prime Minister Ehud Barak, agreed to be acquired by blank-check company Subversive Real Estate Acquisition REIT LP.
- Tilray will supply medical cannabis for a French trial over 18 to 24 months.
- Scotts Miracle-Gro Co. reports first-quarter earnings before the market opens.
©2021 Bloomberg L.P.