Economists predict that by 2021, the marijuana industry will be worth more than $21 billion. Because so much money and investment is at stake, everyone is waiting anxiously for what may happen under Trump’s administration. Cannabis is still illegal federally, even though most states have unbanned both medical and recreational marijuana.
Effect of Trump Administration on Marijuana Industry
Trump’s rhetoric on cannabis policy is confusing. His words suggest that he might support the right of states to make their own laws on pot, or at the very least, he may favor medical marijuana. However, he already has a history of reverting on campaign promises, such as Mexico paying for the border wall, which it can now pay later, if it ever does. There is no guarantee that Trump means what he says.
Furthermore, Trump appointed Jeff Sessions as Attorney General. Sessions has opposing views on legalizing marijuana, and as a cannabis critic, there is a chance he may cause problems for the industry, claiming moral responsibility over financial gain. With all this uncertainty, what effect could Trump have on the cannabis market? According to Forbes, there are five potential scenarios:
1. Trump Shuts Down the Marijuana Industry
In the worst scenario, Trump’s administration could shut down the industry completely. He seems intent on undoing everything that ex-President Obama’s team did. If he can eradicate 22 million people’s insurance and disrupt that industry, then the cannabis community is small fry. He could tear the Cole Memorandum into pieces, seize assets, and close down all marijuana businesses.
If he takes this route, his administration will likely target small companies first. The Rohrbacher-Farr amendment protects marijuana businesses by preventing the government from spending money on targeting them. For this reason, he may go after those companies that do not have sufficient resources to fight the federal government. This would set the industry back years.
2. Trump Terminates Recreational Use
In another scenario, Trump’s administration may leave medical marijuana alone and make recreational use illegal. He could start by targeting recreational outlets, taking their inventories and monies without any criminal charges against them. Unfortunately, most of these companies do not have the means to fight a losing battle with the government.
However, it is possible that states could take the government to court on behalf of their voters. The people chose to make recreational use legal, and California is hiring former Attorney General Eric Holder to prepare battle in this scenario. If this happens, there could be some delays by the court system. While waiting for a resolution, recreational cannabis companies will be under immense stress.
3. Trump Bars Further State Legalization
The new administration has a lot on its plate. Many believe that it has too many other priorities to waste time addressing marijuana, such as health care and foreign policy. For this reason, Trump may choose to leave existing markets alone, but prevent new states from legalizing. He could pressure states not protected under the Rohrbacher amendment, or be so vague that they are afraid to take the plunge.
4. Trump Does Nothing
Trump may choose to leave the marijuana industry alone and maintain the current status quo. In this scenario, nothing will change. The Cole Memorandum will remain in effect and legal states can move ahead without further disruption. Polls show that most U.S. citizens favor legalization, and states are in desperate need of the revenues.
The biggest incentive for Trump to do this is the potential for states to require less government funding and services. With the pressure of a national debt crisis on the new administration’s hands, it could very well welcome financial relief. If he leaves the industry in peace, states will have more money to provide for themselves and pay for their own services.
5. Trump Supports the Marijuana Industry
Because Trump is a businessperson, he may very well decide to support cannabis markets. His cabinet consists of executives too. He wants people employed and the marijuana industry has massive potential for job creation. So far, it has created employment opportunities for more than 150,000 people in legal states alone. This figure will be much higher nationwide and will climb as the industry grows.
Cannabis is popular and Trump is a populist. He could remove marijuana as a scheduled narcotic from the Controlled Substances Act and make it legal instead. He would gain a new following of supporters if he did. This approach would create a new product for exportation, and banks would be able to serve a new set of clientele. This type of move would be big and shocking enough to expect from him.
Trump on Marijuana
Of all these scenarios, many believe that Trump will stick to the current status quo in the end. The industry will stay on its current path and move forward. Congress could give all states Rohrbacher-Farr protection, and the Department of Justice could issue new guidelines under a new memorandum. It is unlikely that the cannabis industry will face federal crackdown, and it may not work if tried anyway.