The U.S. is in the midst of a cannabis revolution. Twenty-one states (plus Washington, D.C.) have legalized recreational cannabis as of the this year’s elections. But despite these legal changes, interstate commerce for cannabis remains illegal under federal law—meaning that no state can legally transfer cannabis products from one part of the country to another.
That reality has led many experts to argue that allowing interstate commerce would lead to more efficient markets and more competition among vendors, which would ultimately benefit consumers by lowering prices and increasing product variety. As with much of the progression in the cannabis industry, California is paving the way.
Governor Newsom Introduces Senate Bill 1326
On September 18, 2022, Gov. Gavin Newsom signed several marijuana-related bills. Senate Bill 1326 allows for the creation of interstate commerce for cannabis pacts—a move intended to override the prohibition on the transportation and distribution of cannabis products across state lines. The move is intended to pave the way for the cannabis industry to operate more like other industries, where producers can export their goods and import products from other states.
The bill would be a big win for California’s cannabis industry, which has been crippled by federal prohibition laws that prevent the state from engaging in interstate commerce with other states that have legal marijuana programs. California would seek out other states who have similar interests, but who would perhaps benefits from a partnership agreement with states well known for their quality and established marijuana programs. While neighboring states like Oregon and Nevada will likely still rely on their own legal programs, it could mean stronger partnerships nationwide and more opportunity for brand growth.
However, it comes with stipulations. California will not move forward with sanctioned agreements with other states unless the federal government moves towards total legalization of cannabis. At this time, there is no reason to believe that this will happen soon. Although President Biden appears to be more pro-pot than past presidents, the nation is still wondering if Biden will legalize weed or show support from the sidelines.
In addition, the U.S. Department of Justice and the U.S Attorney General must issue written statements that fall in line with the intention of the bill, which includes law change or promises that guarantee that there will be no legal action taken against the states which participate in interstate commerce.
Cannabis is Illegal at the Federal Level
It’s important to remember that cannabis is still illegal at the federal level in the United States. This means that each state can pass its own laws regarding cannabis, but they must follow federal law.
So while California has made it legal for adults over 21 years old to purchase and possess recreational cannabis, this only applies within California state lines; when you’re traveling outside of California, you cannot take your cannabis with you (despite legal status in bordering states).
And because legalization is still such a new concept—and one with so many implications on society—it’s unlikely that Congress will change anything else about its stance on recreational marijuana use anytime soon.
Would Interstate Commerce Improve the Cannabis Industry?
California would certainly reap several benefits of legalized cannabis and interstate commerce. The state can easily produce far more than it can consume, and since plenty of states are not positioned to grow cannabis at such high quality, it would be a massive financial gain for the state of California.
Cannabis brands’ fate would soon be determined in the free market as consumers begin to determine what is worth buying. Since a large variety of products would be available for purchase online, it’s difficult to determine how long it would take to shake out, but undoubtedly there would be a massive upheaval and purging of lower quality cannabis throughout the country.
