Cannabis Musings - December 12, 2023

The political reality of cannabis.

Friends – we talked a few weeks ago about Georgia’s brave move towards allowing licensed pharmacies to dispense low-dose THC medical cannabis.  A little meshugah, in a good way.  Welp, the U.S. Drug Enforcement Agency took notice, and it apparently doesn’t like the idea.  Reportedly, the DEA sent a letter to a Georgia pharmacy reminding the latter that Federal law kind of gets in the way, particularly when you’re a DEA-registered/licensed pharmacy.  Understandably, the pharmacy is unpleased.

To me, the DEA’s response is not surprising at all.  Disappointing?  Sure.  Frustrating?  Absolutely.  Expected?  100%.  Although the DEA is in the middle of considering moving marihuana (the “h” is still funny to me) to Schedule III, the agency still has a job to do, and all of this is fairly clear-cut.  Indeed, even if cannabis were rescheduled to III, it’d still be Federally illegal for a state pharmacy to dispense it.  (If you’re wondering how the DEA could do this in light of the annual budget rider known as “Rohrbacher-Farr,” which prohibits the Department of Justice from spending funds “to prevent …States from implementing” medical cannabis laws, it's a reasonable question, but perhaps the DEA pulling a pharmacy’s Controlled Substances license falls outside of that scope?)

This also shouldn’t come as a surprise to just about anyone who’s been reading Cannabis Musings long enough to know my mantra that the Federal government allows the state-licensed industry to exist and operate solely as a matter of grace.  It’s that simple.  Progress has been made at the Federal level – who would have thought ten years ago that we’d have Congresspeople submitting legalization bills (even if it’s going nowhere), or a sitting President directing the Federal bureaucracy to reconsider cannabis scheduling, or that prospective FBI agents would be allowed to have used cannabis 24 times and still be considered eligible for hiring?  And yet, it’s still a slow crawl and little has actually happened.

So, pivot to the 2024 Presidential election, and the speculation of whether President Biden and/or the Republican candidate should/will stump for cannabis legalization.  Now, I’m no political analyst (just like I’m not an economist, or investment banker, or your lawyer), but I think this take suffers from the same rose-colored glasses mindset that the cannabis industry has demonstrated over the past five years thinking the Federal government cares more about pro-cannabis policy than it actually does.  Fun loiter hofenung ver ich noch meshugeh. (“Stuff yourself with hope and you can go crazy.”)

Cannabis remains a political third rail, despite overwhelming popular opinion favoring some form of Federal legalization.  Policy is hampered by decades of good, old-fashioned fearmongering and moral panic.  All that really matters in the end is whether you can convince the voter base (the ones who vote in the primaries) of a handful of Senators to support policy reform, giving candidates the cover they need to spend the political capital necessary to make it happen.  Without that, why would any Presidential candidate (particularly a Democrat) toss their opponent a giant softball (i.e., a Chicago 16-inch softball) and hand them the bat to crush that smashball into the outfield supporting a policy change that has no chance of success? 

The ad writes itself: “Wars. Inflation. Crime. Hate. Divisiveness. My opponent doesn’t care about any of this – he just wants to sell your kids drugs.”  Don’t believe me?  Consider Senator McConnell’s comments in February 2022 relative to SAFE Banking – “China has been steadily building up its military and economic might, and the Democrats’ answer is to help Americans get high.”  That was for a banking bill in comments made to nobody watching on C-SPAN. 

In my mind, it’s just not worth it for a Presidential candidate to very publicly take on cannabis as a campaign issue if there’s zero practical chance of it passing Congress, on the off chance that a handful of voters might be swayed by cannabis policy, of all things.  It’s way too hot button an issue, and, relative to the zillion other problems in the country and the world, it’s way too inconsequential.  I hope I’m wrong about this – it would be great to see cannabis policy be front-and-center in the Presidential debate.  I just really doubt it’ll happen any time soon.

Now, don’t get me wrong – cannabis of course means a lot for a lot of people, for a whole host of reasons.  I’m not suggesting that any of this is rational.  Indeed, it’s the exact opposite of rational (i.e., it’s irrational).  But that’s exactly why progress at the Federal level has been, remains, and will continue to be frustratingly slow.  We need to continue to do everything we can to change the narrative and push for change, but we need to be realistic with ourselves and with others, and manage expectations appropriately.  Otherwise, we’re going to keep stepping on rakes.

On a sort-of related note, our friends at On Drugs were successful in their FOIA request to get a redacted copy of Health and Human Services’ rescheduling recommendation to the DEA.  It’s an impressive feat and a good read.

Be seeing you!

© 2023 Marc Hauser and Hauser Advisory.  None of the foregoing is legal, investment, or any other sort of advice, and it may not be relied upon in any manner, shape, or form.