The Cannabis Industry Finds Newfound Legitimacy Amid COVID-19 Crisis: Q&A with NORML’s Erik Altieri
The start of 2020 looked promising for the cannabis industry as policy reform efforts inched forward at the federal level. The U.S. House passed the SAFE Banking Act in September to allow financial institutions to work with the industry, and in November, the House Judiciary Committee approved the MORE Act to federally decriminalize cannabis, marking the first time a congressional committee has approved legislation to end federal prohibition.
While much of this political progress has slowed as the country deals with the COVID-19 pandemic, NORML Executive Director Erik Altieri says the outlook for the industry remains positive as cannabis businesses are declared essential in many U.S. states’ stay-at-home orders, giving the industry a newfound sense of legitimacy.
Here, Altieri discusses how businesses and consumers are adapting in response to COVID-19, how the political climate has shifted in the wake of the crisis, and how the pandemic might help shape future cannabis policy.
Cannabis Business Times: What are some of the key takeaways regarding the current political climate surrounding cannabis policy?
Erik Altieri: It certainly is clear that the ongoing situation with COVID-19 has slowed down a fair amount of political progress, not just for marijuana law reform but certainly anything political in this country. We had good momentum coming into this year. We had a large number of states that were looking to get [legalization] onto the ballot. We had a number of states looking to pass either medical laws or full legalization at the state legislative level. But come the middle of March, state legislatures basically shut down, and with the stay-at-home orders, it became impossible to collect signatures to get something placed on the ballot. Certainly, the scope of what we thought possible for 2020 seems to have narrowed a bit due to the situation, but on the bright side, we still have a number of states that are moving forward with their initiative process that had already placed it on the ballot prior to the lockdown.
In a lot of ways, we’ve seen some newfound legitimacy through the coronavirus crisis when it comes to a regulated cannabis market. That’s easy to see when you take a look at the incredibly large number of states that have deemed medical marijuana dispensaries and, in a fair amount of states, recreational dispensaries as essential services. Marijuana dispensaries as an essential service just shows how far we’ve come in the past eight or so years in terms of it being taken seriously as a legitimate industry and one that provides an essential good to the communities they operate in.
We’ve really had to grapple with this new reality we’re facing. We’ve pivoted largely to engaging our supporters and members through things they can do from home online, whether that’s helping us collect information for our fall 2020 voter guide, which is the largest voter guide of its kind for marijuana policy, [or] whether it’s reaching out to state representatives or congressmen using our tools. We’ve found new ways to engage people, given the situation they currently find themselves in.
There are reasons to be a little sad about some of the missed opportunities we may have had through 2020, but there are also a lot of opportunities and newfound respect for the issue that has come through this.
CBT: How is the COVID-19 pandemic shaping cannabis policy? How might it impact pending federal and state cannabis legislation?
EA: It’s still a large question mark when it comes to how this will impact our pending legislation, particularly the MORE Act at the federal level, which was the largest piece of marijuana reform legislation to ever be approved by a committee federally at the end of 2019. We fully expected to pass that through the full House of Representatives this year. Given their current schedule, that’s still an open question, depending on how quickly they can get back to some sort of standard operating business here in Congress and Washington, D.C.
I do think that states that still practice prohibition are going to start to look at their state funding, which is taking a huge hit due to the ongoing pandemic, and whether it makes any sense at all—or if it did in the first place—to arrest responsible adults for simple marijuana possession. I think it’s going to have an impact on the way people form their values and public policy and how marijuana plays into that. Certainly, [after] being deemed essential businesses and the legitimacy that came with the services they were able to provide during the pandemic, the American public will further [support] the idea of legalization after this is behind us.
It’s also interesting to note, when you’re looking at how states were reacting to it, [that] a large number of states, for fear of spread of the disease in the prison population, let non-violent offenders go if all their charges were largely drug offenses in particular. Most of them were in there for marijuana, so we’re even seeing some sort of acknowledgement by state governments that, when push came to shove, these individuals were not a terrible threat to society, and maybe we’re a little safer with marijuana offenders not filling our prisons than with them in there.
CBT: How is the pandemic impacting cannabis use patterns among consumers?
EA: A lot of that data is still pending. I know there are a number of folks doing analysis and studies into just that topic, and we’ve worked with some groups to help collect that data. Certainly, what we did see in the very beginning as the stay-at-home orders started to come down [is] cannabis sales boomed as people planned to be largely homebound for the foreseeable future. But we were also rather aggressive in informing our supporters and consumers broadly about the safest practices on how marijuana consumption interplays with COVID-19.
We issued a large number of recommendations, [and] people have adopted them, whether it’s not sharing joints and bowls and other marijuana consumables at this point for fear of spreading germs, or whether it’s [people in] vulnerable populations or [who] have concerns about respiratory health [looking] at edibles, tinctures and minimal vaporization because any real combustion still does have some effect on the respiratory system. If you’re in a vulnerable population, you’d probably like to avoid combusting cannabis for the time being, so we’re giving consumers that information. I think we’ve seen those habits adapt to our new reality, whether that is switching to a less combustible form of consumption for the time being, not sharing marijuana in a way that most of us consumers are pretty used to, or what we saw [this week] on 4/20, when it became clear that it would be unwise for us to typically celebrate as most marijuana consumers do, getting together with large groups of friends and sharing cannabis on the holiday. That all had to be shifted online social interaction—webinars and web chats. Consumers are adapting, and I think as the months go on, we’ll see more concrete data to show that is true.
CBT: What do you think the outlook is for the cannabis industry? How might cultivation and dispensary operations permanently change due to the COVID-19 crisis?
EA: I think it will impact the cannabis industry broadly in probably a number of different ways. First, the cannabis industry is no more immune than other industries when it comes to these large economic downturns. As we see continued growth in unemployment and continued stay-at-home orders, that clearly is prime to impact retail sales of any product, and certainly cannabis would be a part of that. On the other hand, we’ve begun to see a shift in how states are willing to handle cannabis commerce. A number of states that had previously not allowed things like online ordering, curbside pickup or home delivery have implemented those practices in light of the COVID situation. Hopefully, by instituting those now and seeing they can work and be executed safely and responsibly, we’ll see states with those medical and adult-use markets adopt some more consumer convenience models, whether it’s online orders or home delivery.
Cannabis businesses are also struggling in ways that some businesses aren’t. While in a large number of states they do have the opportunity to remain open as an essential business, given marijuana’s ongoing federal status as a Schedule I drug, they are largely left out of most of these small business assistance efforts that the federal government is working on, whether that’s getting SBA loans or accessing emergency funding that the federal government is giving out to small businesses. At this point in time, cannabis businesses are not allowed to collect on that assistance, so they’ll be facing things that if you were selling produce or even alcohol, you wouldn’t necessarily have to face. That’s a fight we have ongoing at the federal level, and we’ve been taking a pretty active role in working to ensure that in upcoming aid packages, cannabis businesses will have access to that sort of assistance.
Certainly, they were already facing some struggles that other businesses didn’t, whether it was the lack of access to banking, which becomes yet another issue when you’re dealing with a pandemic and the exchange of cash that could be a lot tougher to track and regulate when you’re dealing with a business that’s also doing deliveries, curbside [and] operating in this new coronavirus reality. Operating as a cash-only business is clearly a huge hurdle, but [so is] the way they’re treated differently by the IRS, having to pay taxes in cash [and] being unable to claim standard business deductions that other businesses can, like payroll deductions [and] operating expenses. Those things are colliding now. They already had these unique challenges and they’ll continue to have to deal with more if they’re left out of financial aid for small businesses.
CBT: What are some of NORML’s broader goals both now and in the future, once the COVID-19 crisis is behind us?
EA: NORML’s large focus in recent history was the ultimate descheduling of marijuana from the Controlled Substances Act at the federal level, and that was a goal that saw progress through 2019 and the early part of 2020. We do expect that once our federal government is back and operational, those discussions will resume. Some of those might be pushed back into 2021, given that it seems our typical way of life here might not be returning for several months, and then we’re going to be up against a large presidential election, an election where a large number of senators and the entire House of Representatives is up for reelection.
Generally, in election years, passing legislation of any sort is a bit more challenging. We’ll continue to focus on federal rescheduling as a large priority, but we’re also shifting to an election year stance. Despite the fact that it’s hard to imagine conducting broad scale elections at this point, they will happen in November, and we need to be prepared. We’ve been spending a lot of time building out resources for our voter guide and voter registration efforts through the corona situation, and in some small ways, I believe those efforts are seeing a bit of a boost because of the fact that most of America is stuck in their homes, looking for worthwhile projects that they feel actually have an impact. Helping us out with volunteer efforts virtually is something that I think a lot more people are now looking to engage in, just given that they’re not going to the office every day, and [are dealing with] all the other challenges of COVID. It provides a nice outlet where you can do something productive that impacts a policy area that you hold very dear. [We’re] now using this time to build out the infrastructure [and] the training, so when we come out on the other side of this, the movement will be more prepared than ever.
Editor’s Note: This interview has been edited for style, length and clarity.