While public attention has focused on how the coronavirus is affecting cannabis businesses from the perspective of supply and demand, there is an equally important force receiving less attention: the regulatory framework for cannabis. Until now, the industry has operated against the backdrop of the state-federal conflict with the potential of several important developments—such as the promise of forthcoming CBD guidance from the FDA and federal legalization—on the horizon for 2020. The spread of the coronavirus has necessarily shifted legislative focus while also reviving dialogue about legalization through a new lens. This article explores how the coronavirus-related disruption to cannabis regulatory efforts will impact cannabis businesses over the short and long term and what we can expect to see on the cannabis regulatory front for the remainder of 2020.
Pre-Pandemic Landscape. At the beginning of 2020, there were over 900 cannabis-related bills pending in state legislatures and Congress, and industry observers anticipated considerable developments in the cannabis regulatory framework throughout the year. By early March, the FDA had issued a much-awaited report summarizing its efforts to craft a regulatory scheme to address the burgeoning CBD marketplace. Discussions regarding the stalled Secure and Fair Enforcement Banking Act (SAFE Banking Act) were slowly reviving. Many of these measures came to a screeching halt as the coronavirus took hold in March 2020. Even so, a look at where the regulatory landscape stands amidst the pandemic reveals that, while there has been some expected shift in focus as the country concentrates on pandemic-related issues, cannabis–related legislation and concerns have not been entirely cast aside. With the pandemic’s economic concerns looming, cannabis-related legislation is being examined from a new angle: as a potential positive economic disruptor.
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