A Synopsis of The Varying Views on The U.S. Regulated Cannabis Industry

By Darryl K. Henderson, J.D.

Summary:

As an innovation-oriented business professional, I have been fascinated with the varying views about the state-regulated cannabis industry in the U.S. My studying has required broad research and analyses.

I have often thought that a concise synopsis of the arguments “against” and “in favor of” cannabis legalization in the U.S. would be a nice read. Have you had the same thought?  Good. Look below.  You will find an illustrative (not exhaustive) write-up on the topic.

Content:

CON:
Cannabis is a negative substance and has historically been used by people who are looked down upon by mainstream society (i.e., hippies, some racial/ethnic minority groups, etc.).

PRO:
The first recorded use of cannabis for medical or recreational purposes is in the writings of the Chinese emperor Shen Nung from 2737 B.C.

For hundreds of years, cannabis has been a naturally growing plant in many parts of North America.

At one time in the U.S., hemp (a form of cannabis) was one of the most profitable crops in farming. Several of our early U.S. presidents grew hemp, alongside tobacco, to be used in rope, canvas, clothing and paper.

People of color in the U.S., particularly African Americans and Hispanics, have been disproportionately harmed socially and economically by arrests, convictions and penalties for possession and personal-use of cannabis.

Although people of color and Whites use cannabis at roughly the same rates, because of cohort size Whites are the most prevalent users of cannabis.

If a person drinks a beer, cocktail or glass of wine it should not be assumed that he or she is a “drunkard.” Similarly, someone who consumes cannabis is not necessarily a “stoner” or “hippie.

CBS News has reported that the fastest growing users of cannabis in the U.S. are people at the age of 55 and over.

CON:
Cannabis is an illegal Schedule I drug under the federal Controlled Substances Act of 1970 (“CSA”).

PRO:
The socio-political push that began in the 1930s to criminalize cannabis had a bad-intent motivation. This was led by Harry J. Anslinger, the 1st Commissioner of the Federal Bureau of Narcotics. Prior to the end of alcohol Prohibition, Anslinger claimed that cannabis was not a problem and neither harmed people nor made them more violent. After Prohibition, with no scientific evidence, only the goal to propel his political career, Anslinger began to champion anti-cannabis ideology, legislation and law enforcement practices.

The Schedule I drug classification for cannabis means that it has no medicinal use, high potential for abuse, and it is not safe to use without medical supervision. Other Schedule I drugs include LSD, heroin and ecstasy (i.e., Molly or MDMA).

By contrast, Schedule II drugs are classified as having legitimate medicinal use but the potential for abuse. Schedule II drugs include cocaine, prescription pain killers like oxycodone and morphine, as well as drugs like Adderall and ColdCough HCM.

Schedule III drugs include Ketamine (a pet tranquilizer that is used by people to get high) and Fiortal/Codeine.

Arguably, cannabis is less harmful than all Schedule I drugs, most Schedule II drugs and some Schedule III drugs.

As of March 2018, medical marijuana (“MMJ”) has been legalized in 34 U.S. territories (including D.C. and Puerto Rico) and is active in twenty-eight.  Adult-use or recreational marijuana (“RMJ”) has been legalized in 10 U.S. territories and is active in seven.  CBD oil has been legalized as the only cannabis product available in 16 U.S. states and is active in eleven.  And hemp has been legalized and is active in 10 U.S. states.

Other significant developments in 2018 for the U.S. cannabis industry are as follows:

• A CBS News Poll revealed that 59% of Americans support the legalization of cannabis (which compares favorably to a 2017 poll by the Pew Research Center which reported 60% support)
• 61% say leave cannabis legalization to the states
• 33% say the federal government should lead cannabis legalization
• 63% say cannabis is less dangerous than “most other drugs”
• Former U.S. House Speaker John Boehner (Republican) is joining the advisory board of U.S. cannabis producer Acreage Holdings. “Boehner’s move marks a fundamental shift for a man who said nine years ago he was “unalterably opposed” to legalization,” reports Kristine Owram of Bloomberg.  In a joint statement with former Massachusetts Gov. Bill Weld, who also joined the Acreage Holdings advisory board, they said that they believe “the time has come for serious consideration of a shift in federal marijuana policy.”
• Four bills were introduced in the U.S. House of Representatives that are designed to ease the federal prohibition of cannabis in different ways, including eliminating the classification of cannabis as a Schedule I illegal drug under the Controlled Substances Act of 1970.
• Senate Minority Leader Chuck Schumer (D-NY) will introduce a bill to decriminalize cannabis on the federal level, which will include removing cannabis as a Schedule I drug under the CSA.
• President Donald Trump reiterated his opinion that the states should be allowed to decide cannabis legalization within their jurisdictions.
• Senate Majority Leader Mitch McConnell (R-Ky.) introduced legislation to legalize hemp in the U.S., designating hemp as an agricultural commodity and removing it from the Controlled Substances Act of 1970. A companion bill is being introduced in the House.
• S. Attorney General, Jeff Sessions, indicated in March 2018 that although cannabis possession, sale and use are illegal under federal law, the Justice Department is most interested in two areas: (1) illegal marijuana-growing operations occurring on national parklands and (2) street gangs that sell marijuana illegally. Sessions said that the U.S. attorneys can “decide how to handle” state-regulated cannabis businesses. And several U.S. attorneys have said that they do not intend to prosecute those businesses, as long as the businesses comply with state laws.

CON:
Cannabis is just another mind-altering substance that will worsen people’s health and add to the nation’s social problems. It is harmful to kids. And it will result in a repeat of the 100-year health disaster with Big Tobacco.

PRO:
No physician who has endorsed cannabis use has endorsed a repeat of the harmful effects of tobacco consumption, especially the ingestion of smoke.

Although the ingestion of the THC compound in cannabis (i.e., which causes a person to get “high”) by people under the age of 21 years can be harmful to their developing brains, once the brain has fully developed, moderate use of natural cannabis is less harmful than alcohol and tobacco.

The CBD compound in cannabis, which is distinct from THC, does not cause a person to get “high” and has documented therapeutic benefits.

There is no documentation of an overdose death caused by cannabis use.

The annual deaths associated with cannabis consumption = 0; alcohol consumption = 25,000; and tobacco use = 443,000.

CON:
Cannabis will create a new class of dependents similar to opioid abusers.

PRO:
States that have legalized cannabis have experienced a reduction in opioid use and opioid deaths.

No state that has legalized cannabis either for medical or adult-use has experienced a new class of dependents associated with cannabis use.

CON:
Cannabis will increase drug-impaired automobile driving accidents.

PRO:
No state that has legalized cannabis either for medical or adult-use has experienced an increase in arrests or accidents associated with cannabis-impaired driving.

CON:
There is little scientifically-accepted medicinal value to cannabis use.

PRO:
The World Health Organization (WHO) has found the CBD compound in cannabis to be safe, non-addictive, have no negative public health effects and effective in the treatment of a variety of illnesses.

Cannabis has a long history as a medicine, and many physicians and medical researchers recognize that cannabis has legitimate medicinal uses, including the treatment of: seizures (particularly with kids), severe chronic pain, PTSD, brain injury, Crohn’s disease, nausea from chemotherapy, lupus, arthritis, glaucoma, multiple sclerosis, high cholesterol, low metabolism, cancer and several other conditions.

Cannabis contains chemical compounds called cannabinoids. Cannabinoids interact with the endocannabinoid system in the human body (which is the largest neurotransmitter system in the body). Science has identified at least 15 cannabinoids in cannabis that have therapeutic value.

The U.S. Department of Health and Human Services obtained a patent on the use of cannabis to treat certain brain disorders. U.S. Patent No. 6630507, titled “Cannabinoids as antioxidants and neuroprotectants.” The patent was awarded on October 7, 2003.

CON:
Cannabis is a gateway drug to other harder, more addictive, and more health and society-harmful drugs.

PRO:
There is no scientific or law enforcement data to support the assertion that cannabis is a gateway drug.

There is no scientific evidence indicating that moderate use of cannabis is addictive for the vast majority of people.

Just as alcohol prohibition led to Al Capone, cannabis prohibition has led to the Mexican drug cartels.  But cannabis legalization has reduced unregulated, black-market cannabis sales.

CON:
Cannabis is a tool of the devil.

PRO:
Cannabis is not mentioned in scripture.

“I don’t believe that when God made marijuana he made a mistake that government needs to fix.” – Texas Republican Congressman David Simpson of Longview, Texas who co-sponsored House Bill 2165 to make it legal to buy and sell marijuana in Texas

CON:
Cannabis users will not be able to perform at work. Cannabis consumption will add to employers’ burdens and make workplaces less safe.  Cannabis consumption will increase liability insurance expenses.  It will encourage a new category of employee lawsuits.  And it will diminish organizational productivity.

PRO:
There is no data to support the assertion of widespread adverse effects of cannabis in the workplace.

No state endorses cannabis use on the job or advocates that an employee be allowed to be under the influence of cannabis at work.

Employers engaged in safety-sensitive operations (i.e., transportation, heavy equipment, utilities, etc.) must continue to prohibit cannabis use on the job or being under the influence of cannabis at work.

Employers can still have a zero-tolerance policy for the use, possession, sale, distribution, or manufacture of drugs (including cannabis), drug paraphernalia, or alcohol at work. This may include a policy that prohibits being under the influence of cannabis at work that was consumed away from the workplace, as long as such a policy is consistent with applicable law.

Employers should review their workplace policies and procedures for drug and alcohol use, testing and discipline with the help of legal counsel.

CON:
Cannabis is a danger to public safety and will harm communities (i.e., increase loitering by drug addicts, crime rates, the costs of government regulations, etc.).

PRO:
Over 95% of people arrested for cannabis possession or use did not have a prior criminal record and do not go on to commit other crimes.

The war on drugs has costs over $51B annually, but drug use has continued to grow nationally (e.g., 30 million Americans use cannabis every year).

The war on drugs has had enormous social costs. The imbalance in penalties for cannabis possession or use over several years has resulted in more arrests for cannabis than for cocaine, heroin and similar “hard” drugs.

Legalization will leverage the value of cannabis as a cash crop – including hemp farming.

Legalization will reduce government costs (i.e., law enforcement, judiciary, and incarceration) and raise government revenue (i.e., taxation on production and sale) – all of which can provide funds for government initiatives to foster community improvements in infrastructure, education, health care, workforce development, housing, and other areas of need.

In 2017, U.S. state-regulated cannabis sales reached $8.3B (24% growth over 2016) and generated $1.6B in state tax revenue (60% growth over 2016).  State-regulated cannabis sales are projected to be $11.7B in 2018.  For comparison, 2017 U.S. beer sales were $111B, wine sales were $60B, liquor sales were over $30B and coffee sales were $18B.

There are over 20,000 legitimate cannabis businesses in the U.S., employing over 121,000 people.

CON:
The presence of cannabis storefronts will erode community appearances, including family-friendly standards and images.

PRO:
In addition to well-designed and executed community zoning ordinances, “licensed cannabis delivery services” powered by geolocation-enabled digital apps for mobile devices can help to limit the number of cannabis storefronts in a community.

Florida has seen 50%-70% of its MMJ sales driven by home delivery services. This has created several benefits for consumers, dispensaries/retailers, and communities, including convenience for mobility-impaired consumers, private and discreet product purchases for consumers, improved customer service, enhanced sales for dispensaries/retailers and increased state tax revenue.

CON:
“The state of Colorado, which is revered by those who would love to see this happen as the model, you talk to the governor of that state, you talk to the legislators of that state, you talk to law enforcement people in that state:

You get a hundred and something million dollars’ worth of revenue and, yeah, that’s money, but the cost?… THC content in marijuana is not like it was even a generation ago. There are people overdosing based on ingestion of products that are edibles and things. You have that state being sued by at least two of their border states. You have law enforcement people and emergency rooms being overrun by problems. You have homelessness… spiking in that state.

It has not been good for that state, and states like us would be wise to look at that and realize that’s a sucker’s bet.” – Gov. Matt Bevin, Kentucky, October 2017

PRO:
“We have been terribly and systematically misled for nearly 70 years in the United States… I am not backing down on medical marijuana, I am doubling down… Marijuana is classified as a Schedule I Substance, defined as “the most dangerous” drug “with no currently accepted medical use.”… Neither of those statements has ever been factual. Even many of the most ardent critics of medical marijuana don’t agree with the Schedule I classification, knowing how it’s impeded the ability to conduct needed research on the plant… [I]t is virtually unheard-of to die from a marijuana overdose.” – Dr. Sanjay Gupta, CNN Chief Medical Correspondent, CNN Health, March 6, 2014.

FACTORS CRITICAL TO THE GROWTH AND SUCCESS OF THE U.S. REGULATED CANNABIS INDUSTRY:

The following factors are critical to the future growth and sustainability of the U.S. regulated cannabis industry:

• Establish irrefutable scientific evidence of the natural health benefits of cannabis that is broadly embraced by physicians, the U.S. Food and Drug Administration and the U.S. Justice Department;
• Remove cannabis from the Schedule I illegal substance classification of the Controlled Substances Act of 1970;
• Allow mainstream banking services for legitimate cannabis-related businesses and eliminate the need for those businesses to comply with the awkward and costly FinCEN and Justice Department guidance which forces cannabis-related businesses to dangerously operate on a cash-only basis;
• Eliminate the application of section 280E of the U.S. Tax Code to legitimate and non-criminally convicted cannabis-related businesses, thus eliminating the barrier to those businesses to “deduct operating expenses” from earnings reported for income tax purposes;
• Establish national consumer health and safety standards, especially to protect children, the elderly and the mentally-disabled from the ill-effects of cannabis use;
• Establish national community safety and integrity safeguards;
• Continuously educate the American public about the health benefits and risks of cannabis use;
• Implement effective and inclusive government initiatives that leverage the criminal justice cost savings and tax revenue generated by cannabis legalization;
• Encourage legitimate cannabis-related businesses to implement high performance businesses practices, including financial integrity; employee engagement to ensure worker satisfaction, commitment and career fulfillment; employee safety initiatives; equal employment opportunity, including zero-tolerance anti-harassment practices; and leveraging the value of diversity with inclusion in employment, customer services, business partnerships, supplier relationships and community relations; and
• Establish a “self-regulatory organization” (SRO) within the U.S. cannabis industry to help drive industry standards, rules and policies that foster high performance, transparent, quality and accountable business practices, along with legal and regulatory compliance.

ABOUT THE AUTHOR:

Darryl K. Henderson, J.D. has amassed a broad range of knowledge and skills in a variety of roles, including HR executive, chief diversity officer, chief employment compliance officer, operations executive, business management consultant, executive coach, entrepreneur and employment and commercial lawyer.

Darryl helps organizations to establish the right structure, jobs, talent, culture, strategies, programs and policies to drive productivity and growth.  His functional expertise includes business analyses, organization assessment, strategic planning, administration, process management, operations management, commercial law, community relations, DBE programs, HR structure and implementation, organizational design and effectiveness, employee engagement, leadership development, talent management, change management, EEO/AA compliance, employment law, leveraging the value of diversity with inclusion, and HR metrics and analyses.

Darryl has delivered services to several types of business entities, including headquarter sites, field sales offices, distribution centers, manufacturing plants, retail stores, government agencies, non-profit organizations, professional service firms, and start-up businesses. Geographically, he has served businesses located in the U.S., Mexico, Canada, Italy, Ireland, and the UK.

Darryl has an interest in helping to sharpen the understanding and delivery of high-performance business services within the cannabis industry, especially in the area of human capital management.  He currently serves as president of Keith Consulting Group, while serving as an executive coach in the Leadership Capstone Program at the University of North Carolina – Chapel Hill Kenan-Flagler Business School.

https://www.linkedin.com/in/darryl-k-henderson-b87521134