Last week Delaware decriminalized small amounts of marijuana, making it the 18th state to do so. Also this month, Republican dominated Texas became the 15th state to legalize Cannabidiol (CBD) extracts. Twenty-three states across America now allow some form of legal cannabis. And as impressive as this movement has been over the past few years, two current events indicate the industry is nearing legalization in 2016.
The first event happened last week in New York City, as Viridian Capital held the first ever cannabis investor summit at the Cannabis World Congress & Business Exposition. Viridian Capital is the first Wall Street investment bank and advisory platform dedicated to the Cannabis market.
Featuring a star-studded panel that included Mitch Lowe, co-founder of Netflix, former Ambassador Ned Siegel and cannabis expert Dave Charnick the group consensus a day was that marijuana is expected to be removed from the controlled substances act as a Schedule 1 drug in the near future.
Speaking to a room of high net worth investors, Scott Greiper President of Viridian likened the current process of unwinding of marijuana prohibition to that of the unwinding of alcohol prohibition in the 1930’s. “When 35 states had legalized alcohol, the Federal Government got on board and rescinded prohibition” he said. “Today with marijuana legal in 23 states and with 6-12 states potentially on the ballot in November 2016, we are nearing the tipping point for the Feds to remove marijuana from Schedule 1 to Schedule 2”.
Former Ambassador Ned Siegel however cautioned that while state and federal marijuana tax revenues are the key drivers for the change, Treasury, Congress and Justice departments need to set into motion precursor regulations to pave the way for interstate commerce, banking and law enforcement before full de-scheduling can occur.
As David Charnick from Kalyx Development said after the presentations “Before this summit, we were in the bottom of the first inning of this emerging industry – now we’re in the top of the second”. 2016 may prove to be the year the Feds have to respond quickly to the swelling momentum.
The second notable event that foreshadows a tipping point in the cananbis industry takes place this coming Tuesday June 30th in Colorado at the 2015 NCIA Cannabis Industry Summit, where Presidential candidate Rand Paul is holding a reception to court industry donations to his campaign. For $10,000, you too can be a sponsor of this event. Known as a vocal critic on the “war on drugs” Rand’s appearance at this event being organized by NCIA, the main lobby group for the cannabis industry, foreshadows just how big a role marijuana legalization will play in the 2016 election campaign.
As California, Massachusetts, Arizona, Nevada and other states prepare for legalization ballots, and with over 50% of Americans in favor of legalization, Scott Greiper may well be right that we are finally at the tipping point for Federal action on marijuana. Entrepreneurs are already laying the foundation for what is to come next in what is expected to be a $100 Billion industry.