End the War on Drugs to Let the Cannabis Industry Grow

Introduction: An Ongoing Battle

Let’s start with a provocation: The War on Drugs – is it over? Although we might wish to leave it behind as a catastrophic failure, its specter continues to loom over the cannabis and psychedelics industries today. If you’re involved in these businesses, you’re still battling this war. The constraints placed by the remnants of the War on Drugs continue to hinder the progress of these burgeoning sectors, despite their vast potential for growth and societal benefit. 

In this article I’ll discuss  the War on Drugs, its background, and why it is relevant to today’s cannabis and psychedelics industries. Then I review four specific ways the War on Drugs limits the opportunity these industries can create. Finally, I’ll offer several ideas for a resolution that would release these industries, allowing for growth and economic benefit. 

The War on Drugs is Still Being Fought AgainstCannabis and Psychedelic Businesses. 

In recent weeks I attended various conferences on cannabis and psychedelics. The overriding theme in each of these conferences was how to overcome impediments affecting the commercial cannabis industry and the medical success of the  burgeoning use of psychedelic medicine. It became clear that the impediments to the success of both industries, for medical and casual use, was almost entirely due to remnants of the War on Drugs. For cannabis, among its several commercial problems is the inability to engage in commercial banking, or have proper access to capital, or even to engage in Interstate commerce. Why? All because cannabis is a CSA Schedule 1 substance relating back to the initial misguided political motivations of the War on Drugs as a counterfoil to protests over the War in Vietnam. 

Same thing with psychedelic medicine, whether it be psilocybin, MDMA, LSD or other substances, the fact that current research continues to support the use of psychedelics to treat severe forms of drug resistant depression, PTSD, anxiety and addictive behavior.  Holding back the funding for research to study these remedies as beneficial to a host of mental health disorders, is their continued Schedule 1 status.

The so-called War on Drugs, was the Nixon era denunciation of the use of marijuana and psychedelics by college students and minorities in the 1970s. Richard Nixon declared drug abuse as “Public Enemy #1” and influenced Congress to pass the Controlled Substances Act which found not only heroin, but marijuana, psilocybin, MDMA , mescaline and other psychedelic medicines to be classified as Schedule 1 narcotics meaning that, by definition, they had no known medical use or benefit. Congress made that finding and passed that law despite 5,000 years of known use of marijuana as a useful medicine. 

The War on Drugs was, and remains, vast and severe. Establishment politicians saw Nixon’s War as a tool to quell student and citizen unrest, which was linked to opposition against the Vietnam War and the burgeoning Civil Rights, Environmental, Women’s Rights, and LGBTQ Rights movements. This misguided War targeted not only the youth who protested these conflicts but also the minority groups, tragically leading to their mass incarceration.  The War in Vietnam, was proven to be a failure years later, but that was of little solace to the victims of the War on Drugs which lasted much longer, and I contend continues today.  Meanwhile the real problem of drug abuse is widespread use and over prescription of opiates.  The War on Drugs targeted the wrong enemy!

4 Ways the War on Drugs Limits Business Opportunities and Societal Benefits of the Cannabis and Psychedelics Industries

Constrains Research and Medical Discoveries

Today we have solid research evidence backing the use of cannabis and psychedelics as powerful medicine. They show promise in treating severe forms of drug-resistant depression, PTSD, anxiety, and addictive behavior. However, progress in the field may stall because funding for such vital research is being held back due to their Schedule 1 status, a direct byproduct of the War on Drugs.  

Limits Free Market Benefits which Empowers the Illicit Market

The War on Drugs casts a long shadow on the legal cannabis industry. As an example, cannabis businesses face challenges in engaging in commercial banking, accessing proper capital, and even conducting interstate commerce. All because of their association with a Schedule 1 substance, as stipulated by the War on Drugs. Furthermore, despite being legal in some form in a majority of states, cannabis businesses face severe taxation at the state and local levels and are denied tax breaks or government incentives, typically afforded to emerging industries.

The end effect stunts the growth of the legal economy and pushes trade to underground markets – empowering bad actors and creating severe negative externalities including violent crime. 

Social Equity Programs Manifest as False Hope

To overcome the social harm that was caused by the War on Drugs, both the cannabis and psychedelic industries are struggling to onboard social equity programs intended to open opportunities to those who were victims of the War on Drugs by their wrongful convictions for use or possession of these substances. This is particularly harsh for those who used cannabis or psychedelics as medicine. Social equity programs have been instituted by state statutes, but they amount to little more than unfunded mandates that are ineffective and give false hope. These social equity programs, while well intended, are finding it difficult to truly empower the victims of the War on Drugs. The restrictions on investment and in medical research due to the War on Drugs also diminishes that opportunity for entrepreneurship and free market investment.  

Brutal Tax Disincentives

Typically emerging industries are greeted with lots of federal funding.  Railroads, automotive, energy, and agriculture are among the industries that receive tax breaks or government incentives and grants to develop and improve. Not so with cannabis or psychedelics which receive tax punishment in the form of Section 280e of the US Tax Code and severe taxation at the state and local levels also. Research into the medical benefits of cannabis and psychedelics is stifled by these repressive policies. 

Path to Progress: Removing Barriers

So, how do we break through? First, we need a shift in policy – rescheduling cannabis and psychedelic medicine, funding medical research, allowing commercial banking, and interstate commerce for the cannabis industry. The outdated and misplaced Schedule 1 status must be reevaluated, and research into these substances should be encouraged rather than stymied.

There is little reason left to continue the fifty year outdated status of cannabis and psychedelics as Schedule 1 substances. Each year there are failed attempts to pass cannabis related reforms. If Congress won’t act, then states might consider bold steps beyond those already taken. Here are some ideas:

  1. An agreement with the US Department of Justice, similar to the Cole Memorandum, that would allow a benign acceptance for Interstate Commerce of cannabis products.
  2. Relaxation of Section 280e and state support to pass the SAFE Banking Act. 
  3. State and local governments should reduce taxes on cannabis and fund  financial support for social equity programs. 
  4. End the federal confusion and mixed messages by giving the FDA direction and demand resolution over misunderstood  use of CBD products. 
  5. Authorize THC products for veterans through the VA
  6. Fund unambiguous research, whether by  the states, the feds  or private  means. 

Fifty years after the enactment of the CSA, we have declared the War on Drugs a failure, both as a means to control truly harmful substances and as a social engineering tool to restrict unauthorized use, but the remnants of the War on Drugs are still a powerful cloud hanging over the cannabis and psychedelics industries. If we are to truly end the War on Drugs, then let’s end it once and for all, and implement the ideas above. Until these things happen, don’t be fooled that the War on Drugs is over, it is not, and you are still fighting against it.

Over a long career, I’ve advocated for social change through government reform. Whether environmental protection, energy policy, Free Speech, cannabis or psychedelics, the means to reform starts at the grass roots. When citizens demand change, private markets and government react.  At Cannabis Law we are available to add leadership to experience. Contact us if you need help with lobbying, legislation or regulatory reform.

Social change never retreats.  

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