What Does a Democrat-Controlled Senate Mean for Federal Cannabis Policy Reform?

After Democrats secured the majority in the U.S. Senate following the Jan. 5 Georgia Senate runoff election, many in the cannabis industry are undoubtedly wondering how the shift in power might affect federal reform efforts.

“The Senate flipping from red to blue is a huge green light for cannabis policy,” Melissa Kuipers Blake, an attorney with Brownstein Hyatt Farber Schreck, tells Cannabis Business Times and Cannabis Dispensary. “[Incoming Majority] Leader [Chuck] Schumer has long been an advocate of cannabis reform, particularly the MORE Act, and we expect him to act on comprehensive cannabis reform in the coming year.”

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According to Kris Krane, founder and president of 4Front Ventures, the parent company of Mission Dispensaries, the Democrats taking control of the Senate “changes things completely.”

“It’s an entirely different calculus now in terms of what we can get accomplished at the federal level than it was just a few days ago, when it looked like we’d be looking at the prospects of the Biden administration and a Republican Senate,” Krane tells Cannabis Business Times and Cannabis Dispensary.

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With a Republican-controlled Senate, Krane says passing the Secure and Fair Enforcement (SAFE) Banking Act appeared somewhat likely, and while the legislation’s efforts to increase the industry’s access to banking would be a welcome change, significant, long-lasting changes in federal law seemed out of reach.

Now, with Democrats at the helm of a unified government in Washington, Krane says the industry has a chance at real federal reform, possibly for the first time ever.

Incoming Senate Majority Leader Chuck Schumer has indicated that he wants to make cannabis legalization a priority, Krane says, and House Speaker Nancy Pelosi has been historically receptive to reform efforts.

The House passed the SAFE Banking Act as a standalone bill in 2019 (and again as part of a COVID-19 relief bill in May), and also approved the Marijuana Opportunity Reinvestment and Expungement (MORE Act) last month to federally deschedule cannabis.

“I think we now have a possibility for major federal reform, including descheduling and legalization, that we’ve frankly never seen before,” Krane says.

These descheduling and legalization efforts are likely to include social equity and social justice provisions, Kuipers Blake adds.

“It’s important to remember the social equity component of cannabis reform, which the Democrats have made a priority, and we don’t expect that to change,” she says. “So, there’s also an opportunity for cannabis reform to be coupled with criminal justice reform.”

However, according to Krane, it remains to be seen what legislation like the MORE Act and SAFE Banking Act will ultimately look like in the new Congress.

“I think the MORE Act is going to be the basis for whatever type of comprehensive reform the Democrats want to push,” he says. “That said, I don’t know … if the bill that does end up getting pushed and getting passed will be the MORE Act as it’s currently written.”

Lawmakers may spend more time fine-tuning the details of the legislation now that it has a chance of being considered in the Senate, Krane says.

“The details are really important if it can actually pass versus if it can’t, if it’s a symbolic piece of legislation,” he says. “My guess is that the MORE Act serves as the foundation for a broader descheduling bill. What that ultimately looks like, I don’t think we know yet, but I don’t think it’ll be exactly the MORE Act.”

Krane predicts that the SAFE Banking Act will make it through Congress as standalone legislation much quicker than a descheduling bill like the MORE Act will, as lawmakers may see banking reform as low-hanging fruit that Republicans can throw support behind.

“That’s where the debate’s really going to fall, is how far do they go first?” Krane says, adding that an exact timeline for federal cannabis reform remains unclear as Congress continues to grapple with the COVID-19 pandemic and other high-priority issues. However, he says lawmakers will likely get some sort of major reform legislation through Congress within the next two years, before the midterm elections in 2022, which could shift the power in one or more houses of Congress back to the Republicans.

In the meantime, Krane advises cannabis businesses to start preparing for the possibility of banking reform and even changes to 280E, which could come before any major descheduling or legalization efforts make it through Congress.

Businesses should also consider donating to the advocacy groups that are working to push these reforms through Congress, Krane says.

“I think we have an obligation to step up and support the groups that can represent us and get this done because this is it—we’ve got two years to get it done,” he says. “If we don’t get it done in these two years, who knows when we’re going to have another window to potentially see these types of reforms. This has to be an all-in effort on the part of the industry and the movement, and the industry needs to step up and support the organizations that are working on this stuff in D.C. Again, if it doesn’t happen now—this is our window, and it may never happen again.”