2022 is shaping up to be a big year for cannabis legalization, as Chris Walsh, CEO of MJBiz, spoke about during the opening session of MJBizCon in October of 2021. MJBizCon is the largest cannabis industry trade show in the world, celebrating the 11th anniversary in November 2022 at the Las Vegas Convention Center with more than 250,000 square feet of exhibits, 140 speakers and expecting more than 30,000 cannabis executives to attend.
More States Expected to Legalize Marijuana in 2022
Walsh predicts that at least four more states will legalize marijuana in some form during 2022. The following states are currently making plans for some form of cannabis legalization:
States considering recreational cannabis include:
- North Dakota
- South Dakota
States considering medical marijuana legalization include:
Wyoming may legalize medical marijuana in the next year and also decriminalize cannabis altogether.
Cannabis Business Mergers and Acquisitions
Another trend to look for in 2022 are mergers and acquisitions, predicted to accelerate noticeably in the coming year with some of the biggest companies coming together. The expansion and growth coming this year is likely to continue for several years and is expected to double in the next five years. Overall marijuana retail sales were approximately $20 billion during 2020 and are predicted to reach $45.9 billion by the year 2025.
These positive industry trends are expected to develop despite the lack of support from Washington DC, although more lawmakers on each side of the aisle are voicing their support to end the federal prohibition on cannabis.
A Call to End the Federal Prohibition on Cannabis
A first-year Republican representative from South Carolina, Nancy Mace, recently introduced the States Reform Act on Capitol Hill, calling for an end to the federal prohibition on cannabis and removal from the federal Controlled Substances Act where cannabis is listed as a Schedule 1 substance right along with heroin and LSD . (Of the more than 71,000 drug overdose deaths in 2019, none were from marijuana). The States Reform Act proposes to regulate cannabis like alcohol with a 21-year-old age limit nationwide required for cannabis consumption, with the exception of medical marijuana.
The act would allow states to make their own laws regarding cannabis including the use and sales within state borders. The bill would also allow interstate commerce which currently is a patchwork of various laws in 36 different states. Because cannabis is still illegal federally, it is illegal to transport marijuana across state lines from one state to another. Mace’s bill would do away with this legal obstacle. One of the most important aspects of the bill allows cannabis companies access to the financial system.
A Continuing Need for Cannabis Business Financial Services
Cannabis industry businesses have had to get creative to manage their stream of revenue due to the federal prohibition and legal issues stemming from cannabis sales. Something to watch as pointed out in a recent article on MJBiz is the recent warning issued by Visa on the use of cashless ATMs. Due to the federal prohibition on marijuana and a lack of banking services for cannabis companies, many businesses have resorted to using ATMs where customers receive products instead of cash. These transactions, however, are recorded as cash withdrawals and VISA seems to be making an effort to shut the model down.
It is estimated that more than 8,000 stand-alone marijuana retail shops operate nationwide. With more states legalizing marijuana, the cannabis industry continues to expand across the country and is poised to be America’s next $100 billion industry. Access to the banking financial system is a critical aspect of legalization for cannabis businesses.
A major difference from Representative Mace’s States Reform Act compared to a similar bill drafted by Senate Majority Leader Chuck Schumer, Senators Cory Booker and Ron Wyden in July, the Cannabis Administration and Opportunity Act, are the proposed tax rate. Mace’s bill proposes a 3% federal excise tax that would remain unchanged for 10 years, compared to Schumer’s bill which proposes a 10% federal excise tax increasing to 25% within five years. Mace’s proposed tax rate of 3% was designed to reduce the opportunity for the black market and to help legal cannabis companies remain competitive.
Another major difference is that Mace’s States Reform Act has been filed while Schumer’s bill has yet to be introduced. Both proposals would end the federal ban, allow states to make their own laws, and allow cannabis companies access to the financial banking system including eligibility for loans and listing on major stock exchanges. While all of this is very exciting, and the majority of Americans agree that this should be the last illegal 420, federal legalization still has a ways to go.
The trend is positive, however, with more proponents than opponents compared to a couple decades ago and influential personalities from both political parties voicing their support.
Cannabis Freedom Alliance
What do you get when you put billionaire Charles Koch, rapper and weed connoisseur Snoop Dogg, and advocate for criminal justice reform Weldon Angelos in a room together? Or rather a zoom meeting? The formation of a new coalition launched in 2021 with the goal to change the marijuana legalization debate, Cannabis Freedom Alliance. The CFA aims to end the federal criminalization and prohibition of cannabis in the United States while promoting a free and open market that limits barriers to entrepreneurship.
As Walsh stated at the most recent MJBizCon, ““This train is rolling, the momentum is continuing, despite the inaction of the federal government”.
With the green wave rolling across the country as more states legalize cannabis, more lawmakers on both sides of the aisle showing support to end the federal prohibition, and the predicted growth and expansion in the market, the trends for 2022 and beyond are positive for the cannabis industry. Mosca Seeds is optimistic about the future for cannabis legalization and the positive trends developing in the coming years.
Mosca Seeds is recognized as a master cannabis seed breeder with more than 15 years of experience in practicing quality cannabis seed genetics. We’ll keep our eye on new developments in the cannabis industry coming in 2022 and beyond and share our thoughts with you along with the finest in quality cannabis seeds. Check out our seed bank to peruse the many strains and types of seeds we offer, with something for everyone from the new grower to an experienced gangapreneur.