Regulating Cannabis Interstate Commerce: Perspectives on How the Federal Government Should Respond

Abstract

Much has been written and debated about why the US federal government should or should not legalize cannabis for adults to consume. Now that nineteen states have legalized recreational or adult-use cannabis and thirty-eight states in total have legalized medical cannabis, the conversation has shifted into a nuanced discussion of how to legalize cannabis, not whether to. And the framework that consumers, industry participants, researchers, doctors, patients, and anyone else impacted by the rapidly shifting regulatory structure of state-legal cannabis operate under is not working. Established companies with multibillion-dollar market caps are frozen out of the US financial system. Many prospective small business owners are locked out of checking accounts, getting loans at favorable rates, and the other nuts-and-bolts of creating sustainable businesses. These problems differentially affect minorities and other entrepreneurs from communities harmed by the near half-century old War on Drugs. On top of that, some well-capitalized firms have taken advantage of this patchwork system, creating near-monopolies in some states that have been shown to be detrimental to consumers and the stated goals of the legalization movement.

Creating a legal, sensible cannabis industry from the ground up is difficult work. One of the key challenges is how the federal government should rectify the ongoing conflict between state and federal law by regulating the interstate commerce of cannabis. This paper presents different perspectives on how the federal government should respond. The authors agree that federal legalization is perhaps inevitable. They also agree that the current patchwork of state legalization isn’t tenable. Some disagree on nuances and what mechanisms should be tweaked to ensure that the industry is built in a way that’s both fair and competitive for everyone.

Keywords: interstate commerce, cannabis industry, marijuana reform, regulatory structures, social equity