During the midterm elections last month, two more states voted to legalize medical marijuana use (Missouri and Utah) while one more voted to legalize recreational (Michigan). That leaves 10 states with fully legal recreational and medical marijuana, and 23 with only medical. The momentum is clear.
And yet: marijuana use remains illegal at the federal level. And because the legal landscape is state-by-state, legitimate cannabis companies (not only growers but even cannabis-adjacent companies, like makers of paraphernalia) face hurdles like getting business bank accounts. It’s why you see so many American cannabis companies going public in Canada.
But one cannabis company CEO predicts the status quo in America will change very soon.
“I’m going to predict that there will be a form of federal legalization in this country in the next 18 months,” said Chuck Smith, CEO of cannabis edibles distributor Dixie Brands, on Yahoo Finance’s Morning Meeting live show last week.
His reasoning: the STATES (Strengthening the Tenth Amendment Through Entrusting States) Act, a bipartisan bill introduced to Congress in June. “Let’s make it a states issue, but if you’re operating legally in a state that has legalized cannabis, you’re not going to be subjected to prosecution at the federal level,” Smith says. “You’ll have access to banking, and you’ll have a more fair tax code.”
President Trump in June said about the STATES Act, “I probably will end up supporting that.”
To be sure, Smith is talking his own book. U.S. federal legalization would be a huge boon to his business.
Nonetheless, supporters see an unstoppable tide toward full legalization in America. Many compare it to sports betting: in May, the U.S. Supreme Court struck down PASPA, the federal ban on sports betting, which means individual states may now choose to legalize sports betting in their own state; six quickly have, joining Nevada to total seven states with legal betting.
Dixie is a 9-year-old company based in Colorado; it distributes THC-infused products (and products with CBD, the non-intoxicating cannabidiol) from a number of brands, including chocolate bars from Leafs By Snoop, herbal supplements made by Aceso, and even CBD-infused wellness products for dogs, made by Therabis. Smith boasts that Dixie has “the broadest and most diverse portfolio of infused products” on the market.
And as far as hemp-based products go, Smith expects full legalization of those long before federal legalization of recreational marijuana, thanks to the Hemp Farming Act of 2018. “When the hemp farm bill is passed, that will allow us to grow high-property CBD hemp in the United States,” Smith says, “and not have to worry about importing it from companies that actually have a legal hemp production supply.”
Still, cynics might retort, there are a lot of “ifs” in those predictions.
Daniel Roberts is a senior writer at Yahoo Finance. Follow him on Twitter at @readDanwrite.