The Democratic Majority in Congress, Merrick Garland’s Recent Appointment as the Attorney General, and the Growing National Trend Towards Legalization Point to Yes.
January 2021 ushered in renewed hope and energy for the movement to decriminalize cannabis at the federal level. Federal reform primarily focuses on changing cannabis’s classification under the federal Controlled Substances Act ("CSA"), or removing the drug from the CSA entirely. Growing popular support for decriminalization, in tandem with the appointment of Merrick Garland as U.S. Attorney General, and the shift in power and control of the U.S. Senate, have set the stage for federal cannabis reform. A unique opportunity may well exist for the federal decriminalization of cannabis with important consequences for the industry as a whole.
The Cannabis Status Quo
The Drug Enforcement Agency (“DEA”) is the agency responsible for classifying drugs into the national schedule, Schedule 1 drugs are considered the most harmful: the most addicting with no currently accepted medical use. This classification makes it illegal at the federal level to “cultivate, manufacture, distribute, sell, purchase, possess or use marijuana.” The DEA has not reclassified cannabis since 1970 when the CSA was enacted, even though more than half of U.S. states have decriminalized cannabis at the state level. 
Thus, decriminalizing cannabis through federal reform, is expected to have a number of public policy benefits. First and foremost, there is currently a direct conflict between state and federal law, such that the current state frameworks are operating “in clear defiance of federal prohibition.” Rescheduling cannabis, or removing it from the CSA, would not only remove that conflict, but it would also foster and encourage pre-existing cannabis industries, promote a cohesive cannabis framework, and decrease the illicit market. 
While efforts to reform cannabis’s criminal classification are not new, the stage in 2021 is uniquely set for change. A number of hurdles to legalization have withered, with the most important being the shift of power in the U.S. Senate to a pro-reform majority. In addition, the newly inaugurated Executive Branch is expected to support reform, as signaled by the appointment of Merrick Garland as U.S. Attorney General.
The Nation Is Trending Towards Legalization and the Democratic Majority in Congress Make Legalization A Real Possibility.
The national landscape has changed considerably over the past ten years. Roughly half of the states now have some form of decriminalized marijuana, with recent polls indicating that two-thirds of Americans now support decriminalization. While this continued popular support and acceptance fosters policy change, the most significant factor regarding cannabis reform in 2021 is the recent shift in the U.S. Senate.
Under the recent Republican leadership, the U.S. Senate was often a road-block to federal efforts to decriminalize cannabis. A poignant example of the true resistance the Senate posed to legislative reform efforts is the fate of the Marijuana Opportunity, Reinvestment and Expungement Act (“MORE Act”) in the Senate. The purpose of the MORE Act was to completely de-schedule cannabis and expunge the records of those with certain prior offenses.  Despite clearing the House in a historic vote, the MORE Act died in the Senate because it never seriously considered that piece of legislation, or others. 
Now, for the first time-ever, Senate leadership, specifically Democratic Majority Leader Chuck Shumer (D-NY), has openly endorsed decriminalizing cannabis. And Senator Schumer is not alone. Senators in key committees also support cannabis reform, including Senator Cory Booker (D-NJ) on the Judiciary Committee and Senate Appropriations Chair, Sen. Patrick Leahy (D-Vt.), among others. With these changes it is highly unlikely that new reform efforts will peter out, as the MORE Act did.
Legislative attempts at re-classifying cannabis have already hit the ground running, with U.S. Rep. Greg Steube, a Republican representative of Florida, introducing a bill to reschedule cannabis from Schedule 1 to Schedule 3. This bill is a straightforward reclassification proposal that would increase the opportunity for funding and research of the medical benefits of cannabis, but would not change very much else. Statements from Sen. Schumer indicate that more sweeping reform bills, similar to the MORE Act which completely removes cannabis from the CSA, are coming.
The unprecedented support for federal cannabis reform in both houses of Congress will greatly facilitate the path for policy change, however, the Executive Branch is still of vital importance to that reform becoming law. President Biden is committed to “federal marijuana reform,” but remains vague as to details. Historically, he has not supported complete adult-use legalization. A move this week by President Biden’s Acting Solicitor General, Elizabeth Prelogar, exemplifies the current administration’s attitude towards federal reform efforts.
Earlier this month, the Solicitor General filed an amicus curiae brief with the U.S. Supreme Court in which it urged the Court not to hear a cannabis industry challenge to the Internal Revenue Services’ (“IRS”) ability to subpoena financial records and documents. Standing Akimbo LLC, a medical-cannabis dispensary in Colorado, filed a writ of certiorari with the Supreme Court on November 6, 2020 challenging the Tenth Circuit U.S. Court of Appeals’ prior decision. The Tenth Circuit held in favor of the IRS, and certified its ability to subpoena financial records from the state, over the objections of Standing Akimbo.  Standing Akimbo argued that these summonses, part of an overall audit to see if they were improperly deducting funds contrary to the Internal Revenue Code, 26 U.S.C. 280E, (“Section 280E”), was improper and illegitimate because their cannabis activities are state sanctioned. The Tenth Circuit firmly rejected this argument and upheld the dismissal of the motions to quash the summonses. 
The crux of Standing Akimbo’s writ argument, and one of its primary questions for the Supreme Court, is if Section 280E violates the 16th Amendment of the Constitution, because it taxes more than what is constitutionally considered income. This argument would effectively nullify the IRS’s specific attempt to audit and subpoena Standing Akimbo’s records. More importantly if the Supreme Court agreed to hear the case, it would open the gates to a direct constitutional challenge of Section 280E. Thus, the U.S. Solicitor General’s brief encouraging the Court to let the Tenth Circuit decision stand may seem to cut against the likelihood of legalization, but that is not so.
Careful analysis of the brief indicates a narrow position endorsing the IRS’s ability to levy summonses on third parties in order to investigate potential tax code violations. The Solicitor General took the position that the CSA still controls the classification of cannabis and specifically stated that the Section 280E argument is not yet ripe, because the IRS has not actually taken any enforcement action against Standing Akimbo. Therefore, the position taken is not a death knell for federal reform efforts, or a sign that the Biden Administration would oppose legalization efforts. Rather, it indicates that President Biden will not support this particular judicial challenge to the status quo, but not much else. It could very well be a sign that President Biden is waiting for the change to come from the Legislature.
Of particular importance is that the Department of Justice (“DOJ”) has not issued any kind of press release or provided any comment as to why the brief was filed. If the Standing Akimbo brief was truly meant to be a strong political statement that the Biden Administration is anti-cannabis reform, the DOJ likely would have taken this opportunity to do so. Therefore, this recent action, while disappointing to those advocating for reform because it supports the status quo, is not an indication that President Biden or his administration would oppose reform efforts. Turning to other features of the Executive Branch, including the Vice-President and other DOJ appointees, further demonstrate that President Biden is unlikely to seriously oppose reform. Vice President Harris, is a key supporter of reform efforts and was a Senate sponsor of the MORE Act. To put it another way, President Biden would be more comfortable supporting a simple reclassification act, such as that proposed by Rep. Schuebe, compared to the MORE Act. However, President Biden will likely sign a cannabis reform bill this year, especially given the strong congressional support that such a bill is now expected to garner. The Biden Administration’s appointment of Merrick Garland as U.S. Attorney General is also an important signal that reform is coming.
Attorney General Garland Is Not a Cannabis Champion, But He Is Also Not Likely to Be Its Foe.
The U.S. Attorney General is of vital importance to federal cannabis reform, given that the AG is the head of the Department of Justice, and primary law enforcement official of the federal government. Under former President Trump, the cannabis industry quaked under both AG Jeff Sessions and AG William Barr, because of their hostility to reform. Although those fears may have been overblown, that fear shows the importance that the cannabis industry places on the role of the Attorney General. Understanding Merrick Garland’s position on cannabis reform is thus an important piece of the cannabis reform puzzle.
AG Garland is not considered a cannabis champion by the industry, mainly due to his role as part of the majority opinion that sided with the DEA in a re-classification decision. In Americans for Safe Access v. Drug Enforcement Admin., (2013) 706 F.3d 438, 440, the D.C. Circuit considered whether the DEA’s decision not to reclassify marijuana was arbitrary and capricious. The D.C. Circuit concluded that “the DEA’s denial of the rescheduling petition survives review under the deferential arbitrary and capricious standard.” The majority held that the DEA’s decision was supported by substantial evidence and they would not over-turn its decision.
At first blush, this decision might suggest that AG Garland is opposed to legalization or that he favors the status quo. However, a careful reading of the opinion shows something altogether different: it was the majority’s deference to the expertise of the administrative agency, and not a wholesale rejection of reclassifying cannabis, that carried the day. In fact, the D.C. Circuit Court explicitly did not pass judgment on whether or not cannabis has any accepted medical benefits. It may be that the narrowness of this decision helps explain why the cannabis industry reacted well to Judge Merrick’s nomination to the U.S. Supreme Court. 
At the time of Judge Garland’s 2016 nomination to the Supreme Court, the cannabis industry appeared to take comfort in his public statements that science should be considered when making scientific decisions, and that the judgment of scientists should be respected.  The industry drew optimism from AG Garland’s willingness to consider the science behind the properties and medical benefits of cannabis. While AG Garland’s past actions indicate he is not an ardent supporter of legalization, the current political climate and his willingness to respect science, make it unlikely that he will oppose legalization, or take a position hostile to that of Congress. Tellingly, AG Garland has already recruited attorneys for his staff at the Department of Justice who publicly endorse legalization.
As of early 2021, it appears that major hurdles to decriminalization of cannabis have been removed.Both houses of Congress favor cannabis reform, AG Garland is unlikely to act as a barrier to legalization efforts, and neither will the Executive Branch.With all of these changes against a backdrop of growing popular support, 2021 might just be the year that the long-awaited cannabis reform at the federal level will be achieved.This policy reform would have wide-ranging beneficial impacts, especially to the cannabis industry in California, and other decriminalized states, by removing the long-standing barrier of federal prohibition.
References:  Justin Strekal, The Hill, January 26, 2021, “What the shift in Senate Control Means for Marijuana Policy Reform.”  Id.  Public Health Law Center, Webinar Presentation published June 6, 2019, “What if Marijuana Were Not a Schedule 1 Drug?: Legal and Policy Implications,” Last Accessed February 18, 2021.  Id., see also, David Bienenstock, Leafly.com, January 6, 2021, “What does Biden’s Attorney General Pick Think About Legalization? Not Much, But it May Not Matter.”  NORML.com, “Fact Sheet: How to End Marijuana Prohibition with Regard to the Controlled Substances Act,” Last Accessed February 3, 2021.  Id.  Bienenstock, supra, note 4.  NORML, January 6, 2021, “Senate Power Shift and What it Means for the Prospects of Marijuana Policy Reform.”  Kyle Jaeger, Marijuana Moment, December 4, 2020, “House Approves Federal Marijuana Legalization Bill in Historic Vote.”  NORML, supra, note 8. See also, Kyle Jaeger, Marijuana Moment, January 21, 2021, “Congressman Files First Federal Marijuana Reform Bill of 2021.”  Justin Strekal, supra, note 1.  Id.  Kyle Jaeger, supra, note 10, January 21, 2021, “Congressman Files First Federal Marijuana Reform Bill of 2021.”  Id.  Matthew Hatcher, Reuters, February 1, 2021, “Democratic senators will push to pass pot reform bill this year.”  John Schroyer, MJBizDaily.com, January 6, 2021, “Biden to Tap Merrick Garland for Attorney General, Offering Stark Contrast to Anti-Cannabis AGs Under Trump.”  Bienenstock, supra, note 4. See also, Kyle Jaeger, Marijuana Moment, November 9, 2020 “What Joe Biden’s Presidential Victory Means for Marijuana in 2021.”  Brief for the United States as amicus curiae Opposing Writ of Certiorari, No. 20-645, (U.S. February 2021) [hereinafter “Brief for the United States”].  Standing Akimbo, LLC, et al. v. United States (10th Cir. 2020) 955 F.3d 1146, writ of certiorari, U.S. Docket No. 20-645, November 12, 2020 [writ currently pending before the Court].  Marijuana Business Daily, February 17, 2021, “News Brief: Biden’s DOJ lawyers take IRS side in marijuana firm’s 280E fight.” See also, Standing Akimbo, LLC, et al v. United States (10th Cir. 2020) 955 F.3d 1146.  Id. at 1158.  Id. at 1168.  Id. at p. ii, Questions Presented.  Brief for the United States at p. 8, supra, note 19.  Brief for the United States at p. 9, supra, note 19.  Schroyer, supra, note 16.  Bienenstock, supra, note 4.  Kyle Jaeger, Marijuana Moment, January 7, 2021, “Biden AG Pick Merrick Garland Wants to Defer to DEA on Marijuana Science and Classification.”  Bienenstock, supra, note 4.  Id. See also, Jaeger, supra, note 28.  Americans for Safe Access v. Drug Enforcement Admin. (D.C. Cir. 2013) 706 F.3d 438, 440.  Id. at 449.  Id. at 440.  Schroyer, supra, note 16. See also, Debra Borchardt, Forbes, March 19, 2016, “Marijuana Industry Cautiously Optimistic For Supreme Court.”  MJBizDaily.com, March 16, 2016, “Cannabis Businesses Respond to Obama’s SCOTUS Nominee.”  Schroyer, supra, note 16. See also, Jaeger, supra, note 28; Borchardt, supra, note 34.  Jaeger, supra, note 28.