One of the more contentious midterm elections of all time will (finally) be over today as Democrats try to wrestle control of the House and the Senate from Donald Trump and the Republican Party. Some important cannabis measures are also on the ballot as Michigan and North Dakota could join the list of states with legal cannabis while Missouri and Utah voters will cast ballots on medical measures. Polling shows that marijuana may just be the one thing that can bridge the political divide as 2/3 of all Americans support legalization.
With such strong support for legalization, and Donald Trump stating that he’s inclined to support a states’ rights legalization bill, the cannabis community and industry must seize upon the political movement, regardless of which party controls Congress after today. As Forbes reports, the political landscape for cannabis can be altered dramatically for the better on a number of fronts after today’s election results:
Voters in seven states will weigh in on 36 different cannabis proposalsTuesday, everything from the legalization of medical and recreational use to the definition of hemp to the tax on cannabis sales. All of these initiatives have the potential to change how cannabis is produced, sold and used. But there’s more than just those cannabis-specific questions that could change the marijuana landscape after the midterms. Newly elected officials will have the power to set or change state policies. Here’s a look at how election results could impact the industry.
As more cannabis friendly politicians are elected at the federal level, Congress may be forced to take up legalization of cannabis, or at least find ways to limit federal enforcement of existing cannabis laws. At the very least, it will be more likely to pass a coherent set of regulations around the production, distribution and use of legal cannabis.
Tax reform: Right now, because cannabis is illegal at the federal level, cannabusinesses are unable to utilize tax deductions, including for employee wages, technology, accounting and rent, that are meant to help small businesses. That means they can pay an effective tax rate of 70% to 90% of their profits. Other businesses expect an effective tax rate of roughly 30%. Tax code 280e was designed to attack illegal drug trafficking, but it’s being used by the feds to strangle state-legal businesses. U.S. Senators Cory Gardner (R-CO) and Elizabeth Warren (D-MA), co-sponsored a bill that would provide the cannabis industry with a raft of safeguards, including removing it from 280e, improving banking access and preventing federal enforcement of cannabis laws in states which have legalized it. A Nevada candidate for governor also is calling for banking access for cannabis businesses.
Democrat Earl Blumenauer and Republican Dana Rohrabacher, two candidates that have spoken at the International Cannabis Business Conference, have both made their cases for their respective parties as the better proponents for legalization. While both parties have legitimate arguments, the truth is that the party in power means less on the issue than ever before. With supermajority support for legalization, game-changing federal legislation can be accomplished if the cannabis community effectively organizes. So today, vote, and make sure your friends and family do the same. After today, the real works begin and cannabis can be declared the big winner of today’s election.
Learn the latest about cannabis politics, business, and culture at the upcoming International Cannabis Business Conference in San Francisco on February 7-8, 2019. Be sure to secure your spot at this must-attend event by purchasing your early-bird tickets by January 18th.