Cannabis in the New Year: 5 Key Trends to Watch

2021 was another year of growth, but also uncertainty, for the rapidly expanding cannabis industry.

For Jonathan Havens, co-chair of Saul Ewing Arnstein & Lehr’s Cannabis Law Practice and chair of the firm’s Food, Beverage and Agribusiness Practice, and Marc Adesso, partner of Saul Ewing’s Cannabis Law and Corporate practices, there are several key developments from 2021 that will impact the industry’s outlook in 2022.

Here, they share their predictions.

1. Federal policy reform has stalled.

While this year saw cannabis policy reform efforts gain momentum at the federal level, Havens said there was “no real advancement,” even for incremental reform like the Secure and Fair Enforcement (SAFE) Act.

That piece of legislation, which would allow banks to provide services to the federally illegal cannabis industry, cleared the House for the first time in 2019, and twice in 2020 as part of two separate COVID-19 relief bills. This year, the House passed the SAFE Banking Act for the fourth time in April before approving it a fifth time as an amendment to the National Defense Authorization Act (NDAA) in September.

The legislation has consistently hit opposition in the Senate, where it most recently stalled when legislators removed the bill’s language from the NDAA.

In terms of more sweeping policy reform efforts, the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, which would federally legalize cannabis and encourage social equity in the industry, passed the House in late 2020 before its reintroduction this year. It received approval from the House Judiciary Committee this fall.

Meanwhile, U.S. Sens. Chuck Schumer, Ron Wyden and Cory Booker unveiled the preliminary draft of the Cannabis Administration and Opportunity Act (CAOA) this summer to federally deschedule, tax and regulate cannabis, although formal legislation has yet to be filed.

“There has not been meaningful federal reform on the cannabis front, and unfortunately, that’s not something that we see changing much in 2022,” Havens said. “Yes, there is a midterm election coming up at the end of 2022, but given the current Senate rules and the makeup, it’s going to take 60 votes to get this done, and we’re just not sure there are the votes there for incremental reform, let alone meaningful, sweeping federal reform.”

2. States are increasingly taking matters into their own hands.

Despite the challenges at the federal level, the industry has continued to grow at the state level.

State-by-state policy reform efforts accelerated with the successful ballot initiatives in the 2020 election, when Arizona, Montana, New Jersey and South Dakota voters approved adult-use legalization measures (although the South Dakota Supreme Court struck down that state’s initiative last month). At the same time, Mississippi and South Dakota voters approved medical cannabis legalization measures (although, as in South Dakota, the Mississippi Supreme Court has since overturned the initiative).

Going into 2021, the Connecticut, New Mexico, New York and Virginia all legalized adult-use cannabis, while Alabama legalized medical cannabis, and Havens is looking to Maryland and Pennsylvania as the next states to legalize.

“The East Coast is certainly ripe for it, given that there are so many

More Cannabis in the New Year: 5 Key Trends to Watch