What Changes to Expect in the Cannabis Industry in 2019

A lot is happening around the nation and much of it is great news for the cannabis industry. Some of the states where cannabis is legal, either for medicinal use or recreational use, are striving to remove the barriers that tie cannabis to criminalization. There is even the potential for a bill that would help legalize some aspects of the cannabis industry on the federal level. With that said, 2019 is looking to be a positive year throughout many cannabis-growing communities. Here is a closer look at what to expect in 2019 for cannabis.

Colorado – Change is Coming
The first significant change in Colorado is its governor. The pro-cannabis governor Jared Polis, is in. Under a more cannabis-friendly governor, some of those bills will likely make it into law. Those changes include relaxing outside finance laws so that more companies outside of Colorado can own and operate cannabis companies in Colorado. This could be negative or positive. It is an opportunity to balance the cost of financing against the dropping price of market-ready cannabis. It is no secret that legalization of cannabis impacted the wholesale price of the plant.

Changes on the Federal Level for 2019
One of the biggest changes for cannabis on the federal level is the shift in power that will occur in the House of Representatives in 2019. Rep. Earl Blumenauer penned a plan that outlines what needs to happen for the Feds to legalize Cannabis. This shift follows in the footsteps of John Boehner, the former Speaker of House of Representatives, who also sits on the advisory board of Acreage Holdings a cannabis firm. These shifts could help spur on changes in states where cannabis is still not a legalized crop. Should the Feds move to make cannabis legal, we can anticipate the impact will likely take place in the next few years. Also, with a federal reversal of current cannabis laws, you could see the stock market add cannabis to existing programs such as futures. This could mean that cannabis crops would be traded much the same way that corn or wheat are currently sold.

An article that appeared in Forbes in mid-2018 points out that President Trump is also onboard with moving legalized cannabis forward on the federal level. Thus, it seems that all of the ducks are in a row to make a positive change towards the legalization of cannabis in the near future.

Much of the past political maneuverings have come to a precipice of sorts for 2019. It is possible that by the end of 2019, we will have some federal legalized cannabis policy enacted into law. Such a move may also impact the pricing of cannabis in states where it is still illegal to grow cannabis.

Changes to California’s Legalized Cannabis Laws for 2019
Colorado and California differ somewhat on what cannabis companies can do and cannot do. A great example is cannabis-infused beverages which in Colorado could be a reality in 2019. However, not in California, as that option is currently banned by Assembly Bill 2914. Several bills in California are moving to provide the same level of control for cannabis products that exist for other medications. For example, the shape of cannabis cannot be something that a child would confuse with candy. The focus or arguments in both California and Colorado remain on underage use of cannabis and safeguards for preventing such.

A big change for California is that some cannabis companies will be allowed to provide free cannabis to certain patients, so long as they meet certain guidelines, thanks to Senate Bill 829. This is a big deal because it is the first time that medical cannabis is being treated – legally – in the same way as mainstream pharmaceuticals. The benefit is that those who cannot afford medication are sometimes able to get those meds for free through special programs. Medical cannabis is now in that same boat. This bill helps to also move California’s cannabis laws into more of an alignment with how the public sees medical cannabis.

Oregon and Pricing
The big lesson from Oregon is that too many licensed growers mean that the price of cannabis drops significantly. Cannabis-as a growing industry- will likely take a lesson from Big Ag and how the market is regulated by volume of crops grown. This could include farming subsidies, but that would be in the future. These changes will likely not occur in in 2019 but the unfurling of these needs are likely to spur changes in other states. if the Feds make cannabis legal on their level, this will definitely be a huge impact on the price of cannabis in states where it is still illegal to grow cannabis.

The Big “What If”
Cannabis, as an industry, is still separated by the differences in laws from one state to the next. If the federal jurisdiction were to make cannabis legal on that level, it could open the doorway for more streamlined policies on the state levels – not just for one state, but for all. That could be a huge boon for cannabis growers as there would likely be less personalization of cannabis law interpretation and would provide access to other types of benefits such as traditional bank financing and changes in the way we sell crops. In California, there are bills on the books that may address decreased taxation of cannabis and bills that would allow specialized banks to work with cannabis growers and dispensaries. Currently, with cannabis still illegal on the federal level, it is impossible for a traditional bank to become involved in financing cannabis businesses without suffering harm from federal prosecutors. Should the Feds make cannabis legal in some form on the federal level, we could see traditional banks open up to lending and financing within the cannabis communities.

In short, a lot of improvements are occurring for the cannabis community throughout the legalized states and potentially even on the federal level. Much of what happens though, is dependent upon changes that we will not see until after January 1, 2019. Those include how active the new governor-elect will be in Colorado and what types of bills will be approved by Governor Jerry Brown as he exits power in 2019 and what his replacement will favor or not. Perhaps the biggest change will be on the federal level which if such a dream becomes reality, would provide the outline by which all states could see legalized cannabis without the fear of federal prosecution.

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