Trade & Tariffs
While marijuana remains illegal at the federal level per the 1970 Controlled Substances Act, the US has become a patchwork of state-determined laws pertaining to the drug. Some states have legalized recreational marijuana, others allow medicinal use and/or CBD oil, a few states have merely decriminalized the plant, and a handful follow the federal guidelines.
Five forms of marijuana legalization have been implemented across the country:
Fully Legal: Marijuana is treated like alcohol. Marijuana use is legal for adults 21 and older for any and all purposes, including medical and recreational uses. All government-enforced penalties for using and possessing pot for personal use are removed. The amount of cannabis one may possess and grow varies by state; large quantities generally remain illegal.
As of April 14, 2021, marijuana is fully legal in 16 states and the Washington, DC.
Marijuana remains illegal — and criminalized — in seven states: Idaho, Kansas, Nebraska, North Carolina, South Carolina, Tennessee, Wyoming.
Legal status of marijuana
Recreational: Adults 21 and older may legally consume marijuana for pleasure (i.e., “recreation”) rather than for strictly health (medicinal) benefits.
Voters in Arizona, Montana, New Jersey, and South Dakota have approved measures to regulate cannabis for adult recreational use. (The South Dakota Supreme Court is currently deciding whether the voter-passed amendment is constitutional.)
Legalization of marijuana use does not always mean it’s legal to purchase. In Washington, DC, it’s legal for anyone 21 and older to possess up to two ounces of marijuana, grow up to six marijuana plants in the district (with up to three in the mature flowering stage), and gift up to an ounce of marijuana to anyone 21 years or older — as long as no sales or trades occur. This is because it is not legal to buy marijuana in Washington, DC. Instead, consumers buy seemingly overpriced stickers and receive marijuana as a “gift with purchase.”
Medicinal: Allows doctors to recommend marijuana for a wide range of conditions, including pain, nausea, depression, anxiety, and PTSD. States determine the medical conditions for which physicians can prescribe cannabis and cannabinoids. In a few states, medical cannabis laws are lax enough to be functionally like full legalization; in others, medical cannabis is strictly regulated.
Nineteen states have legalized only the medical use of cannabis with a doctor’s recommendation. Alabama recently passed a medicinal marijuana law in May 2021. When implemented, it will be the 16th state to allow medicinal use only. If the South Dakota high court decides in favor of voters, the state will implement a medical marijuana program on July 1, 2021. Six states allow marijuana to be used for medicinal purposes but do not allow it to be smoked.
CBD Oil: It is legal to purchase products with cannabidiol (CBD) oil, which is derived from the Cannabid sativa plant. Unlike its cousin, delta-9-tetrahydrocannabinol (THC), CBD is not psychoactive. CBD products may include lotions, oils, sprays, gummies, and food products.
Eleven states allow the use of “low THC, high CBD” products for medical reasons in limited situations. These low-THC products are not counted in medical marijuana programs and each state has its own standards governing what is and isn’t allowed. In Kentucky, only universities with medical schools can procure CBD products for research trials.
Decriminalization: Eliminates jail or prison time for limited possession of marijuana, though other penalties may remain in place. Some states treat minor marijuana offenses like minor traffic infractions — violators are punished with fines of a few hundred dollars. Other states with decriminalization laws may still include possible jail time for possessing larger amounts of marijuana, selling marijuana, or trafficking marijuana.
As of April 13, 2021, 27 states and Washington, DC have decriminalized marijuana (this includes states that have legalized recreational pot and medicinal pot).
Even in states that have decriminalized marijuana, possessing larger quantities or selling cannabis may still carry significant penalties.
Despite many states loosening marijuana laws, the federal government has yet to legalize the drug. Under the Controlled Substances Act, federal law continues to prohibit cannabis sale and use; marijuana remains classified as a Schedule I drug with a high potential for abuse and no accepted medical use. Therefore, even in states where marijuana has been legalized for recreational use, state laws conflict with federal laws.
Marijuana retail businesses, therefore, must remain fully in-state, in jurisdictions where marijuana is legal. The marijuana that a business sells must be grown, sold, used, and taxed within state lines — without using any federal land or means of commerce. This presents several complications, including preventing cannabis businesses from using banks (which are federally regulated), deducting business expenses on their federal income taxes (which other businesses are allowed to do), and preventing farmers from using water from federally-managed resources.
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