The Presidency’s Pot-ential: Trump’s Rocky Relationship with Marijuana

Since 2012, more than 25 states have legalized recreational marijuana, and 38 have legalized it for medical use.

However, this past election saw one of the smallest pushes towards legalization this country has seen. Only Nebraska succeeded in voting for a measure that allows for medical cannabis and a marijuana commission. North Dakota, South Dakota, and Florida all took stabs at a recreational industry, but ultimately failed.

With Donald Trump being elected President once again, the future of legalization efforts remains in up the air. And this is largely because of Trump’s irregular patterns with marijuana efforts.

In 2018, he signed the Farm Bill, which legalized all hemp production and ultimately made way for the abundance of CBD products to hit the States. However, simultaneously, he denied the 2013 Cole Memorandum which would have prevented federal prosecutors from pursuing cannabis cases in legalized states. Moreover, he proposed revoking federal protections for state medical marijuana industries.

As you can see, Trump’s actions towards cannabis are very unpredictable. Naturally, this has awakened some concerns about the future of the cannabis industry.

Trump currently wants to reform the SAFE Banking Act (giving cannabis businesses access to federal banking) and reschedule the plant in the Controlled Substances Act. However, being his previous policy directions, it’s still uncertain whether he’ll actually follow through with these efforts.

Still, cannabis reform ultimately comes down to Congress. Admittedly, there’s some potential here. Congressman Matt Gaetz, Trump’s recent pick for the U.S. attorney general, is a strong supporter of cannabis legalization. Yet, most in the Republican Party still oppose cannabis reform.

For instance, Trump’s selection of John Thune as Senate Majority Leader — a long-standing opponent of cannabis policy reform — could prevent future efforts. However, recent bipartisan efforts to federally regulate marijuana, suggest this kind of conservative resistance is not universal.

Similar to Trump himself, Congress also remains unpredictable. Since Republicans now control the House and Senate, there’s plenty of disagreement when it comes to specific issues. For example, most Republicans support business interests (i.e., the SAFE Banking Act) but oppose human rights issues (i.e., federal legalization).

As his presidential campaign suggested, Trump’s primary concern in office is economic reform. Admittedly, it’s unclear how his proposition for higher tariffs and lower taxes will impact the cannabis industry.

However, as a businessman, Trump is likely aware of how rescheduling cannabis from a Schedule I to Schedule III substance would be beneficial. More specifically, it would eliminate Internal Revenue Service (IRS) Code Section 280E. This elimination would allow cannabis businesses to deduct regular commerce expenses, as seen in other industries.

Such deductions would have a major impact on the industry as a whole. To provide an example, Trulieve recently revealed it received $113 million in tax refunds after challenging IRS Section 280E.

Beyond rescheduling, many advocates also have their eyes on the SAFE Banking Act. This would protect financial institutions working with cannabis businesses, giving marijuana entrepreneurs access to banking services.

So… what does this all mean? In terms of federal legalization efforts, we are unlikely to see any progress over the next four years. Instead, the focus will continue on state-by-state levels.

However, there is a chance that Trump may continue with President Joe Biden’s efforts to reschedule cannabis under the Controlled Substances Act. Since rescheduling would hold major economic benefits, this could closely align with the primary concern of Trump’s administration. Furthermore, these efforts may finally result in the passing of the SAFE Banking Act.

Still, until Trump sets out with his plans for the future of cannabis legalization, this all remains speculation. And, the future of cannabis legalization in the States remains somewhat uncertain.