It’s been ten years since Colorado became one of the first two states in the country to legalize recreational cannabis. And since then, the market has grown to 37 states that permit medical marijuana and 19 that have legal adult-use markets. This November, that tally might change as voters in five states—Arkansas, Maryland, Missouri, North Dakota and South Dakota—will decide on whether they want to legalize adult-use marijuana.
Recently, Brian Vicente, cofounder of cannabis law firm Vicente Sederberg, which played a key role in the drafting of Amendment 64, a Colorado ballot measure that legalized adult-use cannabis in the state, commemorated this anniversary by sharing his thoughts on what has worked in this pioneer market and what hasn’t. He also sounded off on what he finds most problematic in the overall community and the measures he’s undertaken to address these wrongs.
This Q&A has been edited for conciseness and clarity.
Iris Dorbian: Based on your knowledge and insights, what has worked in the market?
Brian Vicente: Colorado’s open licensing process, workable regulatory system and reasonable tax rates have resulted in more than $13.2 billion in regulated cannabis sales taking place in licensed businesses instead of the illegal market, generating more than $2.2 billion in state tax revenue. It’s created tens of thousands of cannabis industry jobs, as well as opportunities for other industries and local businesses.
Dorbian: What hasn’t worked?
Vicente: Ending cannabis prohibition is a critical and historic step forward, but there is still work to do, especially around social equity and repairing the damage caused by cannabis prohibition. Several states have enacted programs aimed at ensuring the individuals and communities most affected by prohibition, but many have struggled to produce wide-scale, long-term gains. These challenges are frequently compounded by other factors. For example, many equity businesses have difficulty raising capital and maintaining compliance with extremely restrictive regulations, making it hard to get their footing in this highly competitive market. These issues are exacerbated by federal laws, which limit availability of loans and financial services and require cannabis companies to pay a much higher effective tax rate than other legal businesses.
Dorbian: What are trends do you foresee?
Vicente: We are very likely to see more states legalize, including as many as five in this year’s election. We will also see other countries following suit, with Germany likely to lead the way soon. As more jurisdictions move away from prohibition and toward regulation, and as regulations evolve to become more reasonable and workable, we will see a more stable and successful industry. I also expect to see work continue at the federal, state and local levels to repair the damage caused by prohibition. President Biden’s recent pardons are a good example, and we’re seeing governors around the country take action as well.
Dorbian: What do you find most problematic in today’s legal adult-use markets?
Vicente: Underrepresentation in the industry continues to be an issue that warrants attention. Black and brown people bore the brunt of marijuana prohibition for decades, but only 7% of cannabis businesses are owned by Hispanics. Last year, I joined with several other industry leaders to found the National Hispanic Cannabis Council, a purpose-driven nonprofit that aims to improve representation of U.S. Hispanics in the cannabis Industry and counter some of the long-held cultural taboos towards cannabis in the Hispanic community.
Dorbian: Aside from Colorado, are there any other markets you feel are “getting it” when it comes to running an effective legal adult-use market?
Vicente: Illinois is an example of a state that has moved fairly quickly to open their adult-use market, and consequently the state has benefitted enormously from new tax revenue. Illinois has also done an excellent job in issuing licenses to individuals and communities disproportionately impacted by cannabis prohibition.
Dorbian: Looking through your crystal ball, do you foresee federal legalization in the near future?
Vicente: With five states poised to legalize cannabis this November, Election Day is poised to be a historic one for marijuana policy reform. These state measures are all polling ahead and if they pass, our country will have 24 states with adult-use laws, along with two U.S. territories and our nation’s capital. This would place the country at the precipice of an important psychological and policy milestone—legal cannabis in a majority of U.S. jurisdictions. While it will not force a change in federal policy, pressure will mount on Congress to take action. Once that occurs, a whole host of developments will ensue. The cannabis banking dilemma will be resolved, as will the 280E tax issue, and there will be a real discussion to be had about interstate commerce and, eventually, international trade.