3 Key Cannabis Storylines to Watch in 2020
Nevertheless, there were plenty of reasons for cannabis entrepreneurs and executives to feel optimistic heading into 2020.
In September, the U.S. House of Representatives voted 321-103 to pass the SAFE Banking Act, which would allow financial institutions to conduct business with marijuana companies in legal states without facing criminal or civil charges.
Meanwhile, the U.S. House Judiciary Committee approved the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act of 2019, while would remove marijuana from Schedule I of the Controlled Substances Act.
So, what storylines will define the next year in cannabis? Here are 3 to keep an eye on as 2020 gets underway.
State-Level Legalization Efforts Move Forward
Marijuana proponents in more than a dozen states have called for cannabis legalization -- both medical and recreational -- through the legislature or at the ballot box in 2020.
Efforts to legalize adult-use cannabis sales are underway in Arizona, Connecticut, Montana, New Jersey, New Mexico, New York, Pennsylvania, Rhode Island, South Dakota and Vermont.
Meanwhile, attempts to legalize medical marijuana are happening in Alabama, Kentucky, Mississippi, Nebraska and South Dakota. Notably, South Dakota will become the first-ever U.S. state to vote for both medical and recreational cannabis initiatives on the same ballot in 2020.
Elsewhere, Virginia Governor Ralph Northam recently called for marijuana reform during his State of the State address last week.
The sale of recreational cannabis is currently legal in Alaska, California, Colorado, Illinois, Maine, Massachusetts, Michigan, Nevada, Oregon, Washington, Vermont and the District of Columbia. 33 states have also legalized medical cannabis sales.
Federal Cannabis Reform Stalls
The U.S. Senate, which is currently on day 7 of an impeachment trial against President Donald Trump, is dragging its feet on a bill that would protect financial institutions working with state-approved marijuana operations.
Efforts to advance the SAFE Banking Act, which passed the U.S. House of Representatives over four months ago, have hit a snag as Senate Banking Committee Chairman Mike Crapo (R-ID) has called for amendments to the bill.
“Significant concerns remain that the SAFE Banking Act does not address the high level potency of marijuana, marketing tactics to children, lack of research on marijuana’s effects, and the need to prevent bad actors and cartels from using the banks to disguise ill-gotten cash to launder money into the financial system,” he said in December.
The delay has drawn the ire of cannabis industry lobbying groups as well as members of the House who helped write the bill, and Crapo has repeatedly been encouraged to move things along.
Last week, the four lead sponsors of the SAFE Bank Act – Ed Perlmutter (D-CO), Steve Stivers (R-OH), Denny Heck (D-WA) and Warren Davidson (R-OH) -- wrote Crapo a letter and said they “look forward to continued progress on this issue.”
“Our bill is about public safety,” they said. “It does not change the legal status of marijuana and is focused solely on taking cash off the streets and aligning federal banking laws with the decisions states are already making regarding cannabis.”
One bill that would redefine the legal status of cannabis, however, is the MORE Act. Even though the House Judiciary Committee advanced that bill last November, the chances of it passing both a full House vote are around 50% right now. The odds of it passing the Senate are just 3%, according to GovTrack.
Congress is also examining additional cannabis legislation, but lawmakers and regulators have called for more research on the effects of marijuana before they would consider decriminalizing or descheduling the cannabis plant.
Major Players Tighten the Belt
Pot stocks got punished in 2019 and a number of high-profile cannabis companies began pulling back on planned acquisitions and other expansion plans.
Earlier today, Canadian cannabis firm TerrAscend Corporation said it had terminated a planned acquisition of Gravitas Nevada Ltd., a vertically-integrated marijuana business with cultivating, processing, packaging and dispensing operations in the Silver State.
TerrAscend is just one of a number of cannabis outfits tightening the belt, however.
Most notably, California-based MedMen Enterprises last November embarked on a major restructuring effort that included a number of divestments and hundreds of layoffs. The multi-state operator also canceled a planned $700 million acquisition of Chicago’s PharmaCann.
Meanwhile, Chicago’s Cresco Labs also terminated its planned acquisition of VidaCann at the end of 2019.
Other companies, like Eaze and High Times, are struggling with cash flow and reportedly at risk of going under. In an effort to stay afloat, those companies have begun pivoting toward plant-touching operations such as branded products and retail dispensaries.
For her part, Beverly Hills Cannabis Club founder Cheryl Shuman recently told HempToday that “soon the industry will consolidate and the green rush will be over.”
If that’s the case, perhaps we’re seeing the beginning stages of that consolidation as cannabis firms scramble to conserve cash, reduce debt, and evolve alongside the industry.
What other major storylines do you think will emerge throughout 2020? Drop us a line at firstname.lastname@example.org.