US cannabis legalization in the 2024 election? Will Joe Biden and the Democrats make cannabis reform a significant part of their re-election platform?

With the potential rescheduling of cannabis from Schedule I to III, pot stocks have risen. Investors are hopeful that banking reform may pass Congress. Voters are anticipating the end of cannabis prohibition.

But how much of this is hype versus reality? How likely is it that cannabis legalization will be a 2024 U.S. election issue? 

For answers, CLN spoke with three experts in the field. Nawan Butt, Portfolio Manager at Purpose Investments, Leah Heise, Founder and CEO of Gemini Twin Consulting, and Lex Corwin, Founder and CEO of Stone Road Farms.

U.S. Cannabis Legalization in the 2024 Election

Neither Trump nor Biden is particularly pro-cannabis, says Leah Heise. However, cannabis is a “bipartisan issue that needs to move forward. But I don’t think that the presidential election will do much in terms of changing the trajectory of this industry.”

Leah sees more significant progress in Congress with the eventual passing of the SAFE Act. While before, cannabis reform was an “afterthought,” Leah finds it “heartening to have an executive branch and the legislative branch really engaging on the cannabis conversation.” 

But ultimately, the lack of access to capital markets and banking is causing the industry’s current woes. Someone “putting a stamp of approval” on the federal cannabis file is undoubtedly a step in the right direction. Still, Leah is skeptical that the 2024 election will be a catalyst.

Rescheduling cannabis to Schedule III is the current achievable goal. Whether that results in cross-border trade and an import/export market remains to be seen. But, according to Leah, that’s what needs to happen. 

“We could be a world leader in exporting [cannabis] products,” says Leah. “But we’re completely cut off, we can’t even even move products in California to the East Coast.”

Democrats Need to Own the Issue

Nawan Butt is also skeptical that the U.S. 2024 election will result in cannabis legalization outright. Like Leah, he sees more action from the SAFE Act and potential rescheduling.

The big event isn’t the 2024 election, says Nawan, but whether the DEA’s response is positive or negative for rescheduling cannabis. “The DEA is supposed to respond in 90 days,” says Nawan. “So hopefully that will give investors another boost in sentiment and whether this is happening or not.”

That said, “It’s going to be very important for the Democrats to own this going into 2024,” says Nawan. 

Rescheduling cannabis has got legislators interested in passing the SAFE Act. Nawan says that would help the Democrats “own” the cannabis legalization issue.

Passing banking reform will bring interim relief for thousands of cannabis operators nationwide. “If Democrats can make this a 2024 election issue, we think that would be fairly interesting.”

Of course, Democrats promised all kinds of cannabis reform last time. Vice-president Kamala Harris was a sponsor of the MORE Act.

U.S. Cannabis Legalization in the 2024 Election

“It’s a double-edged sword,” says Nawan. “On the positive side, they can do the same playbook they used in 2020, try and get investors to jump on the cannabis train for the Democrats. Alternatively,” Nawan adds, the inaction of the last four years “could dissuade some of the voters that this is not happening.”

Nawan says the Democrats must be cautious in rescheduling cannabis and passing the SAFE Act. He says if the U.S. reschedules cannabis and passes banking reform before 2024, the Democrats “can sort of own the issue but [then], they don’t have any carrot to dangle in front of their perspective voters.”

What About Small Businesses?

Lex Corwin sees cannabis being a big part of the 2024 election. “It’s too big a business for it not to be,” he says. 

Lex points to the number of cannabis businesses earning hundreds of millions, even billions, in revenue. “These are big businesses and they’re going to start to have the lobbying power that a lot of traditional industries enjoy.”

Cannabis legalization is inevitable; it’s just a question of who can make it to the finish line. Federal legalization or rescheduling may trigger a massive inflow of capital.

While this “basically helps our chances of being able to compete with some of these larger operators,” it’s a double-edged sword. Removing barriers means “some of these massive billion-dollar cannabis companies,” will be able to move into less mature markets. 

Also, some states don’t have the climate for cannabis cultivation. Lex mentions that New York’s indoor cultivators will never be able to compete with outdoor trees in California.

“It’s a huge worry,” he says. “But you know, ultimately, our strategy is to just get into as many states as possible.” While interstate commerce has pros and cons, Lex sees it as “an absolute game-changer.”

 “Our costs of production in California are a fraction of what other operators in virtually every other market pay,” he says.

That said, “We’re going to see smaller cannabis biotech firms get gobbled up by big pharma.” Lex says it’s already happening. While rescheduling cannabis offers tax breaks, it makes pharma research and development more accessible. 

U.S. Cannabis Legalization in the 2024 Election

Overall, however, Lex is optimistic about the future of the U.S. cannabis market and the potential for legalization. As are Leah and Nawan.

While cannabis legalization in the U.S. 2024 election may or may not be front and center, it’s likely that, when Americans cast a ballot in November of next year, cannabis may already be a Schedule III drug that banks aren’t afraid to touch. 

Footnote(s)

A British Columbia (B.C.) court dismissed a lawsuit from owners of licensed cannabis retail shops. Last year, this group of cannabis retailers sued the province for not enforcing cannabis regulations.

While licensed cannabis retailers jump through bureaucratic hoops and pay excessive taxes on the faulty premise that this contributes to “public health and safety,” the B.C. Bud market of “illicit” retailers doesn’t face these same hurdles.

Particularly on Indigenous Reserves, where the plaintiffs claim damages of at least $40 million in lost revenue.

Justice Basran considered whether the province owed the plaintiffs a private law duty of care in this context. The plaintiffs claimed the province committed torts of negligence and negligent misrepresentation.

But what does this mean? And was Justice Basran’s dismissal of the lawsuit justified? 

Details of the Plaintiff’s (Cannabis Retail) Argument

While the cannabis retailers suing the province wished to remain anonymous, CLN uncovered who they were. Their position is understandable. The government sold them a bill of goods.

When Canada legalized cannabis, the province of B.C. effectively said, “play by the rules and you’ll profit.” The reality has been anything but.

Obviously, licensed cannabis retailers are at a competitive disadvantage vis-a-vis the unlicensed cannabis shops. 

So why did Justice Basran dismiss the lawsuit? 

First, let’s look at what the plaintiffs claimed in their suit. What do “torts of negligence” and “negligent misrepresentation” refer to in this context?

Tort Law

Negligence is a fundamental concept in tort law. It means a failure to exercise a degree of care reasonable people would exercise in similar circumstances.

To establish a claim of negligence, the plaintiff (in this case, a group of licensed cannabis retailers) needed to prove the following:

• That the province of B.C. owed a duty of care to the licensed cannabis retailers. 
• That the province breached that duty by failing to meet the standard of care expected under the circumstances (i.e. The province’s cannabis enforcement authority should have been raiding unlicensed shops more than they were)
• That the province’s breach of duty directly caused harm or damages (i.e. Causation) to the licensed cannabis retailers
• And that these actual harms (or losses) result from the province’s breach of duty.

The plaintiffs alleged that B.C. failed to enforce cannabis regulations (specifically, the Cannabis Control and Licensing Act) on Indigenous Reserves. They claimed this negligence resulted in damages of at least $40 million.

Negligent misrepresentation is a specific type of negligence claim that arises when one party provides false or misleading information to another party, and the party receiving the information relies on it (to their detriment).

To establish negligent misrepresentation, the licensed cannabis retailers had to prove the following:

• That the province made a false statement, whether intentionally or not
• That the plaintiffs relied on this false statement
• The plaintiffs suffered financial (or other) losses from relying on this false statement.

In this case, the plaintiffs said that B.C. promised them a viable, legal, above-the-board retail cannabis industry. One way of ensuring this would be to take enforcement action against unlicensed retailers, whether on Indigenous Reserves or not.

Did the B.C. Government Owe a Duty of Care to the Cannabis Retailers?

Justice Basran considered whether the province owed the plaintiffs a private law duty of care. The B.C. government argued that it did not owe such a duty because the parties had no direct relationship.

But what does this mean?

In tort law, a “duty of care” is a legal obligation imposed on an individual (or group, entity, etc.) to exercise reasonable care and caution to prevent harm to others affected by their actions and omissions.

Of course, not all actions or omissions give rise to a duty of care. That’s where proximity comes in, which refers to the direct relationship between the parties. In this case, whether a direct connection between the province’s cannabis regulators and the cannabis retailers justifies imposing a legal duty.

Justice Basran had to determine whether the province of B.C. owed a “private law duty of care” to the cannabis retailers. Of course, B.C. argued that it did not. They argued that their duty was the “public interest,” not the economic interests of specific businesses.

Justice Basran agreed that no duty of care existed due to lack of proximity. 

How Did the Court Come to this Decision?

Justice Basran dismissed the B.C. cannabis retail lawsuit based on the “plain and obvious” legal standard used when deciding to strike pleadings. 

The court considered the Anns/Cooper test to determine whether a duty of care existed. This involves two stages. First, whether the harm alleged was reasonably foreseeable. And second, whether there is a close relationship between the parties (proximity).

Justice Basran found no prima facie duty of care between the province and the licensed cannabis retailers. The court argued that B.C.’s cannabis regulations do not establish a legislative intention to create such a duty.

The court also ruled that the claims made by the province (i.e. Get licensed and profit) did not create a sufficient relationship to impose a duty of care.

Suppose the court had recognized that such a duty exists. Justice Basran was concerned such a decision could result in more of these types of lawsuits where the province (and its regulators) are held liable for the economic losses of numerous businesses due to their incompetence.

Justice Basran weighed the potential negative consequences of such a decision and decided it wouldn’t be in the best interests of the legal system, taxpayers, or society as a whole to impose such a duty.

B.C. Court Dismisses Cannabis Retail Lawsuit

A B.C. court has dismissed the cannabis retail lawsuit. The decisions sound as if what’s convenient for the government overrules what’s just and fair.

Was Justice Basran’s dismissal of the lawsuit justified? Judges are, after all, only human. And there is an appeals court. So, there may be more to the case in the future.

In the meantime, to argue that judges in Canada have far too much power, that they are, in effect, legislating from the margins is considered a “far-right” viewpoint. 

But there is nothing “far-right” or even “far-left” about upholding the values that underpin our rule of law. 

Suppose governments can evade the consequences of their actions because of the potential cost to taxpayers or the legal system. In that case, there is no rule of law.

It’s rule by fiat masquerading as a rule of law.

A recently published retrospective study suggests medical cannabis reduces neuropathic pain without serious side effects.

Algea Care, Europe’s leading telemedicine platform for medical cannabis, conducted the study in cooperation with the University Medical Center Hamburg-Eppendorf.

Published in the journal Medical Cannabis and Cannabinoids, CLN sat down for a chat with the CEO of Algea Care, Dr. Julian Wichmann, who was also instrumental in the study’s design.

 “While the study looked at it retrospectively,” says Dr. Wichmann, “Does [medical cannabis] work and the answer is, yes, it works.”

Details of the Medical Cannabis Reduces Neuropathic Pain Study

How did this study discover that medical cannabis can reduce neuropathic pain? One way was having patients report their “pain score.” At the start of the treatment, 96% said a pain score of 6 out of 10, with 10 being the most pain.

However, within six weeks of beginning medical cannabis, the reported reduction in pain score was significant. The average pain score went from 7.5 to 3.75.

Follow-up consultations with their doctor found that 90% of the patients reported reduced neuropathic pain. Over six months, 99% would eventually report improvement in their general condition.

No patient reported severe adverse effects. Patients reported dry mouth (5.4%), tiredness (4.8%), and increased appetite (2.7%).

“I think the observation data in the study that we published is crucial,” says Dr. Wichmann. “Because it shows cannabis is extremely safe and comes without any severe side effects.” Adding that the side effect of tiredness is something patients with neuropathic pain welcome. 

Dr. Wichmann says sleep disorders are typical in patients suffering from pain.

So when you see these patients as a doctor, you don’t only treat them for pain; you have to treat them for a sleeping disorder, and you know traditional medicine often means at least two separate medications. Something against the pain or maybe multiple medications, but also something to help them sleep. What we saw here was that the single medication, cannabis, works well to help with both neuropathic pain but also sleeping disorders.

What About Stigma?

Like in Canada or the U.S., German doctors are hesitant about prescribing medical cannabis, whether for neuropathic pain or sleep.

“The reality of it is that probably only two percent of doctors have ever treated a patient with cannabis.”

Dr. Wichmann says stigma is what prevents many doctors from acting. However, he expects studies like this (and future ones) will turn the tide. As well as broader legalization efforts.

Still, having pharmacies dispense medical cannabis is a novel concept.

“I think there’s a stigma, but we see a lot of improvement there and therefore also see a lot of referrals of cannabis treatment,” says Dr. Wichmann.

The European Union and international obligations have curtailed Germany’s legalization efforts. Instead of broad commercial legalization, like Canada’s, the Germans will take a more low-key approach, emphasizing community gardens and non-profit cannabis clubs. 

Canada had developed a similar medical cannabis system, often called “compassion clubs.” But this wasn’t a state-approved program. Since legalization, authorities have been attempting to eradicate these grassroots efforts in favour of large corporate cannabis conglomerates.

Dr. Wichmann answered negatively when asked about illicit markets in Germany and whether medical patients have to find relief there. 

German (and European) health care compared to North American health care couldn’t be further apart. “We’re in an interesting situation,” says Dr. Wichmann, “where out-of-pocket cannabis from the pharmacy is already cheaper than the illicit market.”

While medical cannabis stigma exists in Germany and Europe, it’s nothing like in parts of North America, where neuropathic pain is treated with conventional medicines.

“I think that’s typical for the German health care system understanding if there’s any reason for you to take cannabis to treat even, you know, mild to moderate sleeping disorder, medical will be safe.”

What About Psychosis?

Health authorities in North America would rather discuss cannabis-induced psychosis than medical cannabis benefits like reducing neuropathic pain. 

But as Dr. Wichmann points out, 

There’s data showing that the number one risk for developing cannabis-induced psychosis is you have a history of psychosis, maybe even your family history, and dosage, of course, makes a big impact.. if you control for these and that’s what you can do in a medical environment, not only is it an extremely safe medication, we’re seeing that it has fewer side effects than traditional medication.

So long as your medical cannabis:

1. Comes from a pharmacy, so there’s a guarantee of quality control.
2. You’re communicating with your doctor (“Even if it’s just a video called every four to six weeks,” says Dr. Wichmann)
3. It is medicinal. You’re not self-diagnosing your condition but seeing a medical doctor who can control for things like susceptibility to psychosis or cardiovascular issues that cannabis may complicate.

Of course, the study suggesting medical cannabis reduces neuropathic pain is only the beginning. As cannabis is normalized, Dr. Wichmann expects future research opportunities. 

“Millions would benefit from cannabis to treat their symptoms,” he says. And thanks to changing German laws, it’ll be easier for doctors to prescribe it medicinally.