Cannabis Liberalization In The US: The Policy Landscape
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The cannabis—or marijuana—policy landscape has shifted rapidly in past decades, with increasing numbers of states decriminalizing cannabis possession and legalizing its medical and recreational uses. Yet under federal law, cannabis remains prohibited because of the potential for drug misuse and negative health consequences. This disconnect between federal and state law has allowed a for-profit commercial industry to flourish in many states, absent consistent regulation to ensure product safety. Increasing cannabis accessibility in the states thus raises important public health concerns while expanding certain therapeutic opportunities. A second Health Affairs Health Policy Brief accompanying this one explores the health effects of cannabis legalization. It is also important to understand the framework of policies governing legal cannabis markets, as each policy category likely has differential impacts on health benefits and harms associated with cannabis use and inconsistencies across jurisdictions have important population health implications.
Federal Cannabis Policy
The US federal government began taxing cannabis production and sales by enacting the Marihuana Tax Act of 1937 only after most states had prohibited the substance. In 1970, this law was replaced by the Controlled Substances Act, which designates marijuana as a Schedule I substance considered to have high abuse potential and no accepted medical use. Under federal law, the production, sale, possession, and distribution of cannabis can carry fines and prison time.
During the Obama administration, the federal government relaxed its enforcement of cannabis-related crimes. In a series of executive actions, culminating in the 2013 Cole memorandum, the Department of Justice deprioritized prosecution of federal cannabis crimes in states where these activities were legal and robustly regulated. First passed in 2014, the Rohrabacher-Farr Amendment prohibited the use of federal funds to prosecute medical cannabis-related activities permissible under state law.
Other recent federal actions have further facilitated access to cannabis plant derivatives, although these differ from the botanical products and simple extracts that tend to dominate state cannabis markets. The Food and Drug Administration (FDA) approved several synthetic tetrahydrocannabinol (THC) products in 1985 and 2016, each of which was placed on a higher controlled substance schedule than cannabis. The 2018 Farm Bill legalized hemp, a substance extracted from the cannabis plant that contains only 0.3 percent THC. Also in 2018, the Drug Enforcement Administration designated FDA-approved cannabis-
derived cannabidiol (CBD) products containing no more than 0.1 percent THC as Schedule V substances. Under this authority, the FDA approved the first CBD product, Epidiolex, to treat childhood seizures.
Evolution Of The State Policy Landscape
Public support for the legalization of cannabis use in the US rose from 12 percent to 66 percent between 1969 and 2019. Concurrently, states liberalized their approaches to cannabis markets. Four central policy categories have evolved: prohibition, decriminalization, medical legalization, and recreational (also known as adult use) legalization. Decriminalization regimes were generally adopted first (in the 1970s–1980s, with a resurgence in the 2010s). Decriminalization laws were later complemented by medical legalization or replaced by recreational legalization. Exhibit 1 shows the current status of these four policies, and exhibit 2 depicts state adoption of legalization policies for medical and recreational cannabis since 1996.
PROHIBITION
States began prohibiting cannabis cultivation, distribution, and possession in the early twentieth century. By 1937, every state had some form of cannabis legislation, often motivated by concerns (largely unsubstantiated by scientific evidence at the time) that cannabis products were psychologically addictive, produced insanity, and motivated crime. Although liberalization policies have largely replaced prohibitions, two states—Idaho and Kansas—still ban cannabis in all forms and assign criminal penalties for the possession of even small amounts. Another ten states permit the use of “low-THC, high-CBD” products but maintain prohibitions and criminal penalties for all other cannabis activities (included in the “prohibition” category in exhibit 1).
EXHIBIT 1 Status of cannabis liberalization policy passage, November 2020
Source: Authors’ analysis. National Conference of State Legislatures’s “Marijuana Overview” and “State Medical Marijuana Laws” provided data on recreational legalization, medical cannabis laws, and prohibition. We identified decriminalization status using resources from NORML combined with an independent review of state statutes.
Notes: Policies refer to those passed through ballot initiative or legislative process. States are included if voters passed a relevant initiative or the legislature passed a relevant bill before December 2020. Eleven states that permit the use of low-tetrahydrocannabinol, high-cannabidiol products are classified as either prohibition (Alabama, Georgia, Iowa, Indiana, Kentucky, South Carolina, Tennessee, Texas, Wisconsin, Wyoming) or decriminalization (North Carolina) states because they are not considered to have comprehensive medical cannabis programs. As of spring 2021, the 2020 South Dakota and Mississippi ballot initiatives were overturned or are in court.
DECRIMINALIZATION
Decriminalization is the repeal of criminal penalties associated with cannabis possession for personal use and casual exchange (that is, not sales). “Depenalization” policies that lower these penalties without removing them do not qualify as decriminalization regimes. Decriminalization also differs from the nonenforcement policies adopted in several US cities, where enforcement of low-level cannabis-involved offenses is deprioritized. Decriminalization falls short of legalization because it still prohibits and criminally penalizes cannabis cultivation, production, and sales and maintains civil penalties for possessing cannabis. Since the 1970s, states have increasingly adopted decriminalization policies. By 2020, sixteen states had such a policy (exhibit 1). The laws vary along several dimensions, including the levels of civil fines, penalties for repeat offenses, and threshold amounts of cannabis that are exempt from criminal penalties.
MEDICAL CANNABIS LEGALIZATION
Medical cannabis laws typically permit patients with “qualifying conditions” certified by a medical professional to purchase cannabis at dispensaries operating within the state. Medical cannabis laws differ from low-THC and high-CBD laws, which only legalize the supply and use of cannabis products with low THC content. The most common qualifying condition for which medical users can be certified is chronic pain, although states regularly add conditions to their lists. Since California passed the first medical cannabis law in 1996, the number of jurisdictions adopting such programs has grown steadily (exhibit 2). Today, more than two-thirds of Americans live in one of the thirty-six states and four territories that have approved medical cannabis use (exhibit 1).
EXHIBIT 2 States with medical and recreational cannabis laws, January 1996–November 2020
Sources: Authors’ analysis based on the National Conference of State Legislatures’s “State Medical Marijuana Laws,” with three exceptions—Louisiana, New Jersey, and Rhode Island—for which the date reported by the National Conference of State Legislatures is a different date than the ballot or legislative passage year. In those cases, we conducted an independent review to identify the ballot or legislative passage year.
Notes: For ballot initiatives, the adoption date refers to the year the ballot initiative passed; for legislative initiatives, the adoption date refers to the year the legislature passed the bill.
The first medical cannabis laws passed (1996–2000) were vague and defined medical use broadly. Although laws passed between 2000 and 2009 offered more regulatory guidance over the legal supply chain, laws passed or modified in more recent years (2009–17) feature more comprehensive regulatory programs that prioritize product safety. Still, the vast majority of participants in medical cannabis programs are in what are considered “nonmedicalized programs,” which lack components consistent with evidence-based medicine and pharmaceutical regulation (for example, testing and labeling) and are largely divorced from medical practice. Ways in which current laws differ from each other include the qualifying conditions approved, channels of access (dispensaries, collective versus home cultivation, and so on), registration card renewal requirements, and use by patients from other states.
RECREATIONAL CANNABIS LEGALIZATION
Recreational cannabis laws remove the criminal and civil penalties associated with supply or possession of the substance by adults ages twenty-one and older. These laws typically allow individuals to grow four to six cannabis plants and limit possession and purchase to one to two ounces; most also impose at least a 10 percent retail excise tax on sales. Most states with recreational laws prohibit the use of cannabis while operating a motor vehicle, although four states have specific per se THC limits while driving.
Legalization of recreational use is a relatively new phenomenon. In 2012, Colorado and Washington were the first jurisdictions globally to allow adult cultivation and possession of cannabis. In 2020, fifteen states and Washington, D.C., had laws that legalize adult cannabis supply and possession in some form (exhibit 1), resulting in more than one-third of the US population having legal access to the substance. With the exception of Illinois and Vermont, all laws passed through 2020 have advanced via ballot measures rather than through the legislature.
States have choices in their recreational cannabis regulatory regimes. Most states have opted for a commercial model, wherein private industry is allowed to produce, supply, and sell cannabis subject to regulation at the state and sometimes local levels. Washington, D.C., uniquely does not allow for commercial production or retail sale but, rather, permits only small amounts of cannabis for personal possession, use, and cultivation. Although Vermont originally prohibited commercial sale, the state authorized the establishment of a commercial retail market in October 2020. Factors that can vary within commercial regimes include how producers and suppliers are regulated, the types of products that may be distributed, taxes, prices, marketing restrictions, and ways in which products can be used or personally cultivated.
States that enacted recreational legalization laws saw declines in adult cannabis-related arrests, although racial disparities in those arrests persist. Some cannabis policies, including the 2021 New Mexico, New York, and Virginia legalization initiatives, incorporate reforms to address harms experienced by communities disproportionately affected by cannabis criminalization. Some laws include provisions to expunge or pardon cannabis-related minor offenses. Other states have initiated programs to increase minority participation in the legal market. Some jurisdictions have earmarked tax revenue generated from cannabis sales to support socioeconomically disadvantaged communities.
Policy Challenges And Opportunities
Limited national regulation of cannabis, the persistent divide between national and state policy, and the growth of state cannabis markets present numerous challenges for population health, in part because the safety of many cannabis products is uncertain and varies from state to state. A dearth of federal regulation around cannabis products has resulted in an unevenly regulated for-profit industry that generates high profits and maintains substantial control over marketing, promotion, and products supplied.
Cannabis’s Schedule I designation under federal law poses additional challenges. It hinders the research into the safety and adverse effects of cannabis-based products that would be required for FDA approval. It also restricts cannabis supplied for clinical trials to that which comes from federal sources, which fails to reflect the potency and type of products actually marketed in the states, although the Drug Enforcement Administration is poised to approve several manufacturers’ applications to cultivate marijuana for research needs. Institutions for higher education may be reluctant to allow cannabis to be used in research on their campuses for fear of losing federal funding. Cannabis consumers remain uncertain over the stability of their supply chain and risks that they may be prosecuted under federal law or become ineligible for federal benefits. Finally, cannabis cultivators and distributors face barriers accessing financial services, given that the banking industry is subject to federal laws, resulting in an inability to design investment and growth strategies that could enhance the legitimacy of the industry and safety of the products.
The lack of comprehensive, consistent oversight of cannabis products and the disconnect between federal and state policy suggest a number of important considerations for policy makers.
ENHANCED FEDERAL OVERSIGHT OF PRODUCT SAFETY AND DEVELOPMENT
Several options exist to improve federal oversight of cannabis markets and products and to better align national and state policies. Modifying cannabis’s classification in the Controlled Substances Act would facilitate enhanced product safety research at the federal and state levels, relax consumer and industry fears of criminal prosecution, and facilitate legitimate financial transactions for cannabis companies. It also would provide federal policy makers with additional regulatory controls, such as premarketing approval, which is currently unavailable for substances designated as Schedule I, and would acknowledge cannabis’s medical benefits. This modification could be accomplished by amending the Controlled Substances Act to remove cannabis from Schedule I and moving it to a higher schedule; descheduling cannabis altogether, but having it meet the threshold for FDA oversight, similar to nicotine and tobacco products; or creating a new schedule for cannabis that distinguishes it from other Schedule I substances. The Medical Marijuana Research Act recently approved by the US House of Representatives promotes cannabis research by allowing scientists to access cannabis from state-level dispensaries. Federal policy makers could also further facilitate state regulation of cannabis supply by passing legislation that restricts federal prosecutorial interference with state cannabis markets.
Notwithstanding the above changes, the FDA already possesses some regulatory powers to enhance the safety of cannabis products. Under the Food, Drug, and Cosmetic Act of 1938 and Section 351 of the Public Health Service Act as affirmed in the 2018 Farm Bill, the FDA can regulate cannabis-containing and cannabis-derived compounds. Under this authority, the FDA has taken particular interest in overseeing the science and safety of CBD products. Of concern are health claims made by some cannabis product manufacturers and the introduction of foods containing THC or CBD into interstate commerce—both of which are areas under FDA jurisdiction. The agency could take more aggressive action than issuing warning letters to questionable CBD-related commercial practices and could extend the rigor of its investigations into THC products. For example, it could limit the allowable THC content, which is concerningly high in many cannabis products and is capable of inducing dependence or cannabis use disorder.
STATE STRATEGIES FOR OVERSEEING CANNABIS PRODUCT SAFETY
Without changes in the federal regulatory architecture or enhanced FDA oversight, states that move forward with legalization must carefully consider how to safely oversee cannabis markets.
Medical and recreational legalization have encouraged a proliferation of product forms. Data from early recreationally legalized states suggest that although the flower of the plant still accounts for the largest proportion of the market, heterogeneous extracts for inhalation are the fastest-growing market segment. Cannabis products vary not only in form but also in the potency of THC, CBD, and other cannabinoids, as well as in the types and amounts of pesticides and other impurities. Cannabis food and drink products pose unique regulatory challenges. The health risks associated with edibles, including for minors, likely result from minimal consistency across products relating to potency, inaccurate labeling, and the fact that many edibles contain multiple servings of the advised THC dose. Further, users may fail to appreciate the delayed effects of ingestion compared with inhalation.
State legalization provides an opportunity for enhanced regulatory oversight that can improve the safety of legal cannabis products and limit the health risks and other risks associated with the illegal marketplace. Policy makers can consider ways to align legal cannabis markets with public health strategies gleaned from tobacco and alcohol, such as minimizing youth advertising exposure, restricting sale and marketing locations, and requiring childproof packaging. Frameworks could also consider medical and recreational legalization regimes that adopt safety standards, for instance, by limiting the concentration of THC in products to levels not associated with dependence.
STANDARDS FOR MEDICAL TRAINING
Despite the increasing prevalence of cannabis use in states with and without legalization, many physicians do not receive training on the potential health benefits and harms of medical and recreational cannabis. To address this gap, states could mandate that state-licensed physicians complete continuing medical education credits on medical cannabis use before certifying patients for medical cannabis registration. Medical schools and residency programs could also design coursework on the biochemical effects, clinical relevance, and legal evolution of cannabis policy. These education activities could be regularly updated with emerging evidence on the health effects of cannabis. Outreach could extend to patients and the public to inform them of the evidence-based therapeutic uses of cannabis. All such training would be better informed by enhanced research, as discussed above.
CONSIDERATIONS FOR CRIMINAL JUSTICE AND RACIAL EQUITY
As cannabis liberalization progresses throughout the country, states must address the collateral consequences of cannabis-related criminal justice contact. Although states with legalization and, to a lesser degree, decriminalization regimes have experienced overall declines in arrests for cannabis across racial groups, disparities in arrests across races remain notable. Although cannabis-related arrests decreased by 18 percent during the past decade, a Black person is still nearly four times more likely to be arrested for cannabis possession than a White person.
Cannabis policy reforms that aim to address criminal justice and social disparities warrant consideration. Cumbersome and expensive expungement processes, significant entry obstacles associated with the legal market, and declines in price that in turn reduce funds earmarked for community programs threaten initiatives that address harms produced by cannabis criminalization. As states begin to implement social equity measures, they should carefully assess which communities have been disproportionately harmed by cannabis prohibition; how to encourage equitable, sustainable participation in the cannabis industry—including training and business support; and how earmarked cannabis revenue will be disseminated to equity-enhancing initiatives.
Conclusion
Cannabis policy liberalization provides opportunities for therapeutic benefit but also presents the potential for health harms, the full consequences of which remain unknown, given the nascency of the research and inconsistency in findings (see the accompanying Health Affairs Health Policy Brief). For policy makers considering reforms, policy choices extend beyond blunt categories of prohibition, decriminalization, medical legalization, and recreational legalization and involve decisions related to the panoply of regulatory provisions that govern legal and illegal cannabis. The specifics of how to implement and enforce cannabis policy and regulation are important to health, and researchers should endeavor to evaluate these nuances as well as the broader policy categories. Some states have included within their legalization initiatives provisions requiring policy evaluation. For example, Washington State earmarked cannabis tax revenue to fund a continuous cannabis research program. Other states, including Vermont and New York, reviewed the potential impacts of regulating a recreational cannabis supply chain before policy reform. More efforts such as these will help to unpack the independent and comparative health harms and benefits of various cannabis policy regimes and regulatory approaches.
(Editor’s Note: This article was conceived and drafted when Haffajee was employed at the RAND Corporation, and the findings and views in this article do not necessarily reflect the official views or policy of her current employer, the US Department of Health and Human Services, nor the US government.)