Cannabis laws throughout the United States are ever-changing and complex. On the federal level, cannabis remains a Schedule 1 substance, meaning it has no medical use whatsoever, although President Joe Biden recently urged his administration to reexamine how cannabis is classified. The prospects for federal decriminalization of cannabis remain somewhat dim, but even if that were to occur, the regulation of cannabis would still be largely governed by state and municipal law.
At present, less than half of the states where there is some cannabis allowed also permit adult use. All those states, and quite a few others (around 40 in total currently, some of which have highly limited programs), allow for medical marijuana, although the definition of what constitutes a qualifying medical condition varies greatly from state to state. Moreover, the amount of THC that is allowable in a single product also varies between states.
In many states that allow some form of legal cannabis, some municipalities can then also pass their own cannabis laws (see the discussion of Rhode Island below). As such, states require businesses to have both state and municipal licenses. Some states have as many as 12 licenses cannabis businesses can receive.
With so much complexity in cannabis law, here is an overview of how recent legislation moving through states could impact the cannabis landscape at both the local and federal levels. (Note that this list is not comprehensive.)
–California is one of the most favorable environments for cannabis. Last year, California had over $5.2 billion in sales, according to the California Department of Tax and Fee Administration, making licenses in the state highly prized. However, growing cannabis in California continues to be expensive. Recently passed legislation now requires that operators seeking a license in the state must fill out extensive forms and obtain an environmental impact report to show they’re in compliance with the California Environmental Quality Act (CEQA), which requires state agencies to consider what changes in the physical environment may occur as a result of the activities being licensed. In addition, current provisional license holders must demonstrate efforts they’re making to be in compliance with CEQA. The state legislature has appropriated $100 million in grants to assist growers in offsetting some of the costs that will come with these applications, but cultivation in the state remains expensive.
Like Illinois, California also has pending legislation (Assembly Bill 2188) that would not allow an employer to terminate an employee for use of cannabis outside of the workplace.
–Massachusetts passed a number of laws in 2022 making the environment there more favorable for cannabis operators—particularly in the creation and funding of a Cannabis Equity Trust Fund to address social inequities from prior cannabis convictions.
–Nevada recently passed legislation in June 2022 to increase usage by legalizing consumption lounges. Supporters in the state envision cannabis comedy clubs, yoga studios, massage parlors and cafes.
–Oregon passed significant pieces of legislation in 2022 and increased money available for social equity programs. These bills created a moratorium on new recreational licenses until 2024 and created greater penalties for illegal cannabis grow operations.
-North Carolina senators voted to legalize medical marijuana in June 2022. While the bill ultimately did not pass the state House, its passage in the state Senate moved the state a step closer to joining the other states that have licensed cannabis for medical use. Currently, possession of less than 0.5 ounces is now a non-jailable offense with a fine up to $200, while possession of half an ounce to an ounce can result in a jail sentence of up to 45 days and a fine of $1,000. Possession of more than 1 ounce is a felony.
-Rhode Island made significant progress in May 2022 with the signing of the Rhode Island Cannabis Act, which legalizes personal use and retail sales. It also allows for the review and expungement of past convictions for possession and allows for the issuance of 24 retail licenses. Over 30 municipalities in Rhode Island voted in November regarding the licensing of retailers in their towns, and 25 voted to allow adult use. The towns that chose not to have cannabis on the ballot cannot restrict cannabis use under the act.
–Mississippi became the 37th state to legalize medical marijuana In February 2022.
2022 Midterm Elections
In addition to the above states, five other states had measures on the ballot this year to legalize adult-use cannabis. The results were generally unsurprising and expected.
Maryland passed a referendum on the ballot (Question 4) legalizing cannabis possession by amending the state constitution. Missouri had a ballot measure that legalized personal use for adults over age 21. Along with Maryland, these became the 20 and 21st states to allow for adult recreational use.
Although voters in South Dakota approved the legalization of both medical and adult use for up to 1 ounce of marijuana for people 21 or older, the constitutionality was struck down by a lower court and then affirmed 4-1 by the South Dakota Supreme Court in late 2021. Both South Dakota and North Dakota had referendums on the ballot for legalization this year, but they did not pass, which was consistent with polling prior to the election.
Arkansas, which allows for medical marijuana, had a ballot measure for legalization of adult use over age 21. The Arkansas Supreme Court in a 5-2 decision in September 2022 allowed the measure to move forward after the Board of Election Commissioners ruled that the title of the matter was misleading, but it ultimately did not pass.
Oklahoma had three ballot propositions heading into the midterm elections, but none of them appeared in November. However, Gov. Kevin Stitt issued a proclamation that there will be a special election regarding marijuana on March 7, 2023. In addition, advocates in Nebraska were unable to obtain enough signatures timely to qualify for the 2022 ballot.
Medical marijuana is now legal in almost three-quarters of the country, although there are substantial differences between programs. Legalized adult use continues to expand, and the growth trend continues on an upward arc, creating more opportunities for commercial operations and employers in the foreseeable future.
Barry Weisz is a Partner at Thompson Coburn LLP’s Los Angeles office and is one of the founders and co-chairs of the Firm’s Cannabis practice, which provides comprehensive services to the industry on issues that include product liability, commercial litigation, labor, patent applications, licensing and permits, FDA compliance, product warnings and packaging, health care law, and real estate transactions. He can be reached at BWeisz@thompsoncoburn.com or (310) 282-9448