I really fought myself on putting together a festivus post of all that went wrong for the cannabis industry in 2021. Instead, I want to focus on the positives for 2022 as the industry continues to mature and expand across the U.S. and abroad. As 2021 comes to a close, here’s what I’m looking forward to in cannabis next year:
Federal legal reform
2021 was a total failure when it comes to federal legalization. We got more than enough lip service from Democrats about how legalization and reform would be a top priority. None of that came to fruition, and it appears that Democrats even actively fought against some pretty meaningful banking reform by killing off the SAFE Banking Act as part of the NDAA. I still have hope that proposed legislation like the States Reform Act will make its way into reality in 2022.
California tax reform
California takes it on the head repeatedly for its broken down cannabis licensing program. The state has all kinds of issues regarding licensing backlog, onerous regulatory red tape, overwhelming local control, and, of course, some of the highest cannabis taxes around. While COVID recovery has been the star of the state for a long while, I’m hoping cannabis tax reform can garner some attention given the state of the industry in that high taxes are a major impediment to competing with the illegal market. While I don’t agree with any planned “tax revolt,” I whole heartedly agree with getting these laws changed and taxes lowered in 2022.
New York cannabis
New York is probably the most exciting state on the horizon regarding the launch of its long-awaited adult use program. We’ve kept an eye on the state and are patiently waiting like everyone else for things to kick off. Hopefully New York will learn from the mistakes of other states and borrow only the good state law and policy at the same time. I really see 2022 as a building year for New York cannabis, which will be a great opportunity for the state to develop its program in close concert with stakeholders of all kinds.
Other states coming online (including via legislative vote!)
It used to be that cannabis legalization really only came through on voter initiatives. Not so anymore. There are a number of states where solid cannabis legalization bills are making their way through legislatures. This is an incredibly good sign that cannabis no longer has to wait for “democracy in action” to see change. Plus, more states are definitely poised to flirt with legalization through voter initiatives in November elections in 2022. Delaware (adult use), Oklahoma (adult use), Mississippi, North Carolina, Wyoming, and Pennsylvania (adult use) are just a few on this list.
Cannabis M&A at all levels will continue to boom
There was a lot of cannabis M&A in 2021 (just check out the latest Pfizer deal, which made a lot of splashy headlines), but 2022 is likely to be an even bigger year for deals in the space. MSOs have been aggressively pursuing acquisitions in a multitude of states in 2021, and I doubt they’ll slow down in 2022 as more states come online for adult use. Plus, if we do get any form of federal legalization (or SAFE Banking makes a comeback) in 2022, it will definitely spur dealmaking. Don’t forget, if you’re buying a cannabis business, be sure to do it the right way!
International cannabis is picking up
We recently did a webinar with Clifford Chance where we examined several international markets that have cannabis in the mix. There’s no doubt that international trade around cannabis will continue to pick up in 2022 and that more countries around the world will examine legalization or medicalization. A short list of exciting recent examples is Malta, Germany, and Luxembourg.
Per usual, not all is doom and gloom for U.S. cannabis even after a tough year for federal legal reform. I sincerely look forward to what 2022 brings to the industry. Onward and upward!