Will the MORE Act Incentivize Bigger Companies to Get Into Cannabis?

Is this bill enough to convince big players to jump into cannabis.

Photo credit: Shutterstock

The United States Congress has been flirting with legal cannabis for a long time. Rhode Island is only the most recent example of an ongoing legalization wave; more than three dozen states have legal cannabis in one form or another on the books, and a supermajority of Americans support access to legal medical or adult-use cannabis. 

And yet…Congress can not seem to get legalization over, or more precisely anywhere near, the finish line. The most recent bill to be passed by the House of Representatives is the MORE Act (Marijuana Opportunity Reinvestment and Expungement Act), which would remove cannabis from the Controlled Substances Act, eliminate criminal penalties, enact a tax on cannabis products, and take other steps toward criminal justice reform, social justice, and economic development. 

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What the MORE Act does not do is legalize cannabis. It would simply kick cannabis law back to the states, where businesses could operate without fear of federal criminal penalty. Alternatively, a state could lawfully continue prohibitionist policies. 

Cannabis legalization is a rare, bipartisan issue, and stocks rallied at the news of MORE passing the House. If MORE is passed by the Senate, will this new law incentivize bigger companies to get into cannabis? Let’s dig in. 

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MORE and Legalization

Even if MORE is passed by the Senate (where 60 votes are required because of filibuster rules), it’s not a slam dunk for any company looking to enter the cannabis industry. As mentioned above, MORE does not legalize cannabis at the federal level. 

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Image of the U.S Capital, a white domed building, and a red, white, and blue American Flag flying in the wind

The MORE Act is waiting on Senate to pass. Photo credit: Shutterstock

Additionally, MORE does not fill in the gaping holes presented by a lack of banking resources for legal businesses that the SAFE (Secure and Fair Enforcement) Banking Act was intended to address, or the tax troubles of 280E

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The Senate has a bill of their own, the Cannabis Administrative and Opportunity Act (CAO), which would act similarly to the MORE Act, but still wouldn’t legalize cannabis at the federal level. Still, there’s a wrench in the works, even if any of these bills passed both the House and the Senate. 

The Dormant Commerce Clause

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If the US Congress intends to pass any of those bills and have them successfully implemented, they’ve got to address the Dormant Commerce Clause (DCC). Shaleen Title, of the Ohio State University Drug Enforcement and Policy Center, and Andrew Klein of Perkins Coie LLP wrote in Bloomberg Law that the DCC would “hurt cannabis businesses big and small, potentially endanger consumer safety, and jeopardize racial justice progress being made in the states.” 

Paperwork being signed with a pen with a wooden gavel beside it.

The Dormant Commerce Clause makes selling cannabis across state borders illegal. Photo credit: Shutterstock

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The DCC is a little-known legal doctrine that “bars states from enacting policies that discriminate against interstate commerce,” which put simply, is the transacting and transportation of products and services across state lines. 

As legalization has unfolded state-by-state, to support the growth of local cannabis businesses, many states have ignored the DCC. If the DCC is not meaningfully addressed should any of these new initiatives pass, it could severely disrupt already established regulations and programs. Title and Klein go on to say, 

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“If Congress intends to take meaningful steps to right the wrongs of the War on Drugs and protect businesses small and large, it must explicitly pause the DCC and clearly define the regulatory roles and responsibilities for states.” 

The mess of this state-by-state, patchwork approach to regulation and legalization is best exemplified by the mess of CBD and Delta-8 following the passage of the 2018 Farm Bill that legalized hemp, but kept CBD illegal. Kind of. 

Four years after its passage, consumers buying the two compounds can find them at the dispensary or the gas station, on the streets or at a pharmacy, and are largely left in the dark as to product safety, efficacy, truth in labeling, purity, and more. 

Will Big Companies Like Marlboro Get into Cannabis?

People have long been guessing as to whether industries like big tobacco, big alcohol and big pharma will take up all the space in the cannabis marketplace should federal legalization come to pass. 

A red and white cigarette box opened with the orange bottoms showing

Rumors of big businesses like Marlboro could dive into the cannabis industry with legalization on the horizon. Photo credit: Shutterstock

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So I offer you this potentially, totally wrong prediction: not in the current patchwork environment. Until Congress has the wherewithal to legalize the whole enchilada or plug all the holes in the regulatory systems, it does not seem to make much business sense to jump in with both feet —yet. Big businesses are in the business of making money, and the laws in their current iteration are not supportive of that model. Five years or so from now? We’ll see. 

Frequently Asked Questions

Is Cannabis a Good Industry to Get Into?

That very much depends on your risk appetite. Because of its volatility, uncertainty, and ongoing federal prohibition, it is not an industry for the risk-averse. However, it is a rapidly growing industry, so there’s a lot of opportunity as well. 

How Big is the Cannabis Industry?

2021 cannabis sales were estimated at $25 billion in the U.S. 

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What Would the MORE Act do?

If the Senate passes the bill and President Biden signs it, it would remove cannabis from the Controlled Substances Act, eliminate criminal penalties, enact a tax on cannabis products, and take other steps toward criminal justice reform, social justice, and economic development.

Will the MORE Act Incentivize Bigger Companies to Get Into Cannabis? was last modified: by