Could this key change save the cannabis industry?
There are many interwoven issues that make up the problems in the cannabis space–from oversupply to environmental factors. As someone who has covered weed for almost a decade, I sometimes wonder how many of them can be solved by opening the borders, and I’m not the only one thinking about interstate cannabis commerce.
Interstate commerce would mean California-grown Sour Diesel could finally legally make it to New York. More generally, states could export flower grown in desirable landscapes to other states with legalized marijuana. Idaho harvests one-third of all potatoes, and 60 percent of U.S. citrus comes from California. Cannabis could be the same–and California farmers are ready.
Many cannabis businesses would benefit from the ability to work across state lines, and the impact might ripple beyond just the industry.
Kim Stuck of Allay Consulting shared her views in a statement sent to GreenState.
“Interstate commerce would benefit so many businesses, as it would grow their potential clientele through expanding their market,” she said.
The basics of cannabis crossing borders
Obviously, if states shipped cannabis products into other state markets, brand footprints and product consistency might grow. Farmers growing in saturated markets like California would also benefit. Meanwhile, Connecticut cannabis dispensaries are in a drought. Sending extra weed where it’s needed might solve lots of problems—and not just financial ones.
Growing cannabis outdoors can be the most sustainable option. Currently, cannabis cultivators are legally required to grow within state lines, even if the climate isn’t copacetic–leading operations indoors. Outdoor biodynamic cultivation in the appropriate climate uses fewer resources than indoor cultivation. Consider the energy output of lights and HVAC alone. Additionally, places like California have a terroir built to cultivate premium buds.
“While we celebrate the diversity within the cannabis industry, it’s essential to acknowledge the unique qualities that set these regions apart as unparalleled sources of top-tier cannabis,” Joyce Cenali of Sonoma Hills Farm told GreenState.
Another long-time Emerald Triangle farmer, John Casali of Huckleberry Hill Farms, pointed out that Northern California legacy cultivators hold proprietary genetics that could become nationwide commodities with the opening of state borders.
“Small farmers have come to understand that their real value lies in the rare legacy genetics. It has also come to our attention that the stories that helped create this multi-billion dollar industry have great value,” Casali said to GreenState. “Interstate commerce would only help educate the consumer and expose them to more of the Emerald Triangle magic that has forever found its way across state lines, whether legally or not.”
Benefits on the table– what would it actually take to make interstate cannabis a reality?
What it would take to get interstate cannabis
Rescheduling alone wouldn’t make it alright to ship into new state markets, but it may help cannabis brands get one step closer. States have started taking interstate commerce into their own hands with bills, setting themselves up for cannabis exports and imports in advance of eventual rescheduling.
Washington Governor Jay Inslee signed a May 2023 interstate commerce bill into law that opened doors for the state. Just South in Oregon, Governor Kate Brown signed a bill in June 2023 that would allow the export of cannabis to other state programs with a shift in federal law.
California Gov. Newsom did the same, but with a clause that requires imports to meet or exceed all packaging regulations and safety requirements. This brings into question the regulation of products and compliance in general.
“With compliance, things are a bit more tricky,” regulatory expert Stuck shared. “It’s unlikely for regulators to allow interstate commerce for everyone, as they need to worry about illicit market participation.”
While the world waits for federally-mandated rescheduling, Republican Congressman Dave Joyce is hoping to jump ahead with STATES 2.0 Act in early December. Section three of the bill outlines interstate cannabis commerce from tracking systems to transit vehicle protections from local police, and it deschedules the plant rather than move it to schedule three. However, the bill is early in process.
In the event of DEA rescheduling, regulation would defer to the FDA. For those that get the FDA stamp, compliance becomes managed by the Fed, with products held to the same standards. Though, come rescheduling, many are hoping cannabis doesn’t go into the realm of pharmaceuticals. Though STATES 2.0 lays out a framework, it is yet to be determined how cannabis tracking would be managed in the event of rescheduling.
“To limit illegal activity, regulators would need to implement a travel licensing system that tracks cannabis products and confirms that they are a part of a licensed program rather than some unregulated facility,” Stuck explained.
A system would confirm that only licensed products make it into new state markets. It might also track the flow of weed, meaning saturated markets would only export rather than be inundated with even more products. There is much to consider, but the most prominent factor is that the moving product across state lines would be a major coup for struggling legacy operators in California and dispensaries like those in Connecticut dealing with shortages.
Interstate commerce is a growing buzzword amid rescheduling as well as supply and demand hiccups. The process would require even more bud bureaucracy, but with a look at how it might benefit industry operators, consumers, and the planet–it may be worth it.