Newsom Approves Interstate Commerce for Marijuana…With a Catch

More US smokers could have access to legal cannabis grown in California under a law recently signed by Gov. Gavin Newsom.

Gov. Newsom approved ten marijuana-related bills, including employment protection bills, resentencing, and veterinary medicine.

California is known for its world-class cannabis farmers, who can now legally sell their crops to cannabis lovers and patients in other states, thanks to a new bill signed by Gov. Newsom on the 18th of September 2022.

Senate Bill 1326 adds a chapter to the Business and Professions code that gives the state Governor new powers to sign cannabis trade agreements with other cannabis legal states.

However, there is a catch. The proposed changes won’t take effect unless federal law or policy changes. Marijuana currently remains a federally illegal schedule 1 drug deemed dangerous and medically useless, and falls into the same classification bracket as heroin or LSD.

Other US states are also moving to enact similar bills, giving their governors the power to sign interstate cannabis trade deals. The state of Oregon passed a trade bill in 2019.

The additional nine cannabis-centric bills Gov. Newsom signed are in sync with SB 132.

Why Do We Need Interstate  Cannabis Commerce?

Interstate cannabis commerce allows consumers to benefit from choice and price competition in a free market where states can specialize in producing marijuana they are good at growing.

According to NORML, California Gov. Gavin Newsom scored a “B” on cannabis policy.

Annually Americans consume an estimated 10,000 to 13,000 metric tons of marijuana, and it is suspected that 27% of the marijuana is consumed legally. There are 14 states with recreational sales, which cannot transfer enough supplies across borders to meet out-of-state demand.

In California, cannabis supplies have backed up due to local store bans, resulting in a retail sales issue.

A prime example of the retail sales issues in Los Angeles has less than one-tenth the dispensing capacity per capita as the medical marijuana state of Oklahoma.

California farmers can sell and ship their world-class weed to states where more stores are open and need additional supplies.

Sponsors Rural County Representatives of California argue in support of the recently signed bill, “Without considerable marketing expansion as one part of the solution to help stabilize the legal cannabis industry and incentivize user participation within the regulated market, California potentially risks the collapse of sections of the legal marijuana industry. One of the high-risk areas includes the rural cannabis-producing areas. If this area collapses, it can lead to a major expansion of the illegal cannabis market, resulting in strenuous economic impacts to surrounding economies.”

“The SB 1326 can provide a relief factor for the current oversupply of cannabis, and an opportunity to help grow California’s brand and market share, support job creation, and gives the state a competitive edge and advantage as federal policy develops.” the author of SB 1326 states.

Legislative analyses report that there is no opposition on file.

How Far Away Is Full-Scale Interstate Commerce Within The Marijuana Industry?

While it may not be clear how long it will take for other states to follow California’s lead, analysis shows that it could be years, possibly longer than ten years, if the current rate of past progress is an indication of how long other states will take to implement interstate trade and commerce.

Supposedly more than 90% of Americans support medical marijuana, and American Congress has not yet legalized medical marijuana, even with adult-use legalization polls around 60%.

President Joe Biden intends to decriminalize cannabis, as several bills in congress have advanced the idea. However, none of these bills have made it to the White House for signing.

Once federal action has been taken, states are expected to protect their state-licensed farmers from California’s superior quality and lower prices of legal cannabis.

For example, Florida, Illinois, and Massachusetts growers may seek state protection from California growers and their products.

Historically, California has led the cannabis market in weed quality, product innovation, and price. California strain development has run for years ahead of other East Coast states.

The Cannabis Distribution Association stated, “Licensed cannabis businesses have put everything on the line in order to enter the legal medical marijuana industry can’t afford to wait for federal legalization to provide California cannabis to other legal markets.”

“Senate Bill 1326 is an essential step to ensure that California can fully capitalize on, and remain an industry leader in, the upcoming national cannabis market. Furthermore, SB 1326 allows California to use its own labor, environmental, and product quality standards to be adopted in other states,” mentioned the bill’s author.

Experts hypothesize that interstate commerce could happen soon. Watchers are hopeful that the federal judiciary branch uses aspects of the constitution – the dormant commerce clause. This clause should allow for interstate commerce of cannabis.

The Cannabis Distribution Association states:

“Licensed cannabis businesses have put everything on the line in order to enter the legal medical marijuana industry can’t afford to wait for federal legalization to provide California cannabis to other legal markets, markets that traditionally import agricultural products from California to supply their retail shelves will feet the impact the most. Thousands of medical marijuana patients and adult-use consumers need access to high-quality cannabis and cannabis products. Initiating interstate commerce now rather than potentially waiting years for federal legalization would benefit both producer and consumer states, as well as patients, consumers, small and social equity businesses, and the environment.”

Cannabis-free trade blocks to watch are the west coast states and Nevada.

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