Month: February 2021

2020 in Review: U.S. House Votes to Decriminalize Marijuana

In 2020, the U.S. House of Representatives approved historic legislation that would decriminalize cannabis at the federal level. This was the first time in five decades that either chamber of the United States Congress has held an official floor vote on the legal status of cannabis. What will this mean for the future of the cannabis industry? Continue reading this blog to find out.

Also, check out the other entries in Scythian’s “2020 in Review” blog series: Part 1 on states legalizing cannabis in 2020 and Part 2 on cannabis industry success during COVID-19.

Congress Votes in Favor of MORE Act to Allow States to Legalize Cannabis

On December 4, 2020, the United States House of Representatives voted in favor of the MORE Act (also known as the Marijuana Opportunity Reinvestment and Expungement Act). If the MORE Act were to become law, it would allow individual states to determine their own policies regarding the legal status of cannabis – without any interference by the federal government. This would be an important development in cannabis law because federal law currently prohibits the sale and/or possession of cannabis, a legal status that runs counter to the adult-use cannabis laws and medical marijuana laws in several states.

In addition to legalizing cannabis at the federal level, the MORE Act would also establish a federal sales tax for cannabis. As set forth by the federal statute, the revenues generated by the marijuana sales tax would be used to fund a number of restorative justice programs intended to undo some of the harm caused by previous policies and laws that criminalized marijuana possession and that, in many cases, disproportionately harmed members of low-income and minority communities.

Democrat-Controlled Senate Could Lead to Cannabis Decriminalization in United States

The vote on the Marijuana Opportunity Reinvestment and Expungement Act in the U.S. House of Representatives went largely along party lines, with all but five of the votes cast in favor of the cannabis decriminalization legislation coming from Democrats. The final vote tally was 228 in favor of the proposed law and 164 against the proposed law.

The positive outcome for the bill was a predictable result of the Democrats holding a majority in the U.S. House. The bill’s ultimate outcome would be determined by the U.S. Senate, which until recently was controlled by Republicans. After the legislation initially passed in the House, however, the composition of the Senate changed: a special runoff election in Georgia on January 5, 2021 saw the Democrats flip two seats in the Senate. Now the MORE Act could have a legitimate chance of being approved by the Senate and becoming the law of the land.

U.S. Congress Approves Law to Study Medical Applications of Marijuana

The United States Congress passed another important cannabis bill in 2020: both the House and the Senate approved legislation that would grant researchers greater access to cannabis and allow them to study the potential medical uses and applications of marijuana. The medical marijuana research bill is viewed by supporters as a critical step in the creation of better and more targeted federal drug policy.

Additionally, it is worth noting that the medical marijuana research law received overwhelming bipartisan support from both Republicans and Democrats. This suggests that there could be room for greater support for federal cannabis legalization efforts in the future. During a House floor debate on the legislation, Rep. Greg Walden from Oregon said that more data on “the actual health impacts of [cannabis] products” in states where those products are currently legal will help to fill an “information vacuum” surrounding the pros and cons of legalizing marijuana.

Contact Scythian Cannabis Real Estate Today

Scythian Real Estate is a privately held cannabis real estate fund that provides financing and other assistance to sophisticated cannabis operators throughout the U.S. If you are a cannabis operator interested in raising capital, Scythian Real Estate may be able to help you. Send us an email for additional information.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

2020 in Review: Cannabis Industry Thrives During COVID

The cannabis industry thrived in 2020, even as plenty of other industries struggled due to the coronavirus pandemic. One major reason for the success of cannabis businesses last year was the relaxation of state and local laws that otherwise would have limited the ability of dispensaries to stay open and operate during COVID-19.

To learn more about other important changes to the cannabis legal landscape in 2020, read the other entries in Scythian’s “2020 in Review” blog series: Part 1 on states voting to legalize cannabis and Part 3 on Congress voting to decriminalize cannabis.

Cannabis Industry Sees a COVID Bump: Dispensaries Have Record Sales in 2020

While many other industries have suffered financially as a result of the COVID-19 pandemic, the cannabis industry has actually seen a massive uptick in business. Some have referred to this as “the cannabis COVID bump.” So, what explains the cannabis industry’s COVID bump?

Countless retail stores, restaurants, and other brick-and-mortar businesses throughout the United States were forced to temporarily close their doors when state-ordered lockdowns went into effect at the beginning of the coronavirus outbreak. For many of these businesses, the temporary shutdowns ended up being permanent: the loss of revenues for weeks and even months meant that the stores were unable to reopen their doors even after the lockdowns were lifted.

By contrast, the cannabis industry saw a surge in revenues as dispensaries managed to remain open during the COVID-19 pandemic. That is because retail dispensaries were deemed “essential businesses.” The “essential” designation given to these legal marijuana providers meant that they could continue operating and selling adult-use cannabis to consumers. For states where medical marijuana is legal, one strategy employed to keep the businesses open during COVID was to classify dispensaries as pharmacies.

Since the start of the pandemic, cannabis businesses have seen a huge boost in sales. States like Colorado, Oregon, and Illinois have reported record-breaking month after record-breaking month for state-licensed dispensaries. In Colorado, state cannabis sales surpassed the entire total for 2019 by October 2020. One likely reason for the surge in cannabis sales during COVID is the fact that, for the most part, dispensaries have been able to remain fully operational and open to the public.

Cannabis Industry Adapts with Marijuana Deliveries

The cannabis industry also adapted during the coronavirus pandemic: door-to-door cannabis deliveries became common in states that allow them. Certain states, such as Illinois, Michigan, and New York, relaxed their previously strict rules that limited delivery options for cannabis businesses and customers. The thinking behind these regulatory changes was that by allowing cannabis deliveries, the state could ensure that customers would not have to venture outside and potentially risk spreading the coronavirus.

The same logic was used to justify a related change to state rules in Illinois, Michigan, and New York that govern the amount of marijuana that a customer can purchase at one time: by decreasing the total number of times that customers and dispensary employees need to interact with one another, the risk of spreading coronavirus was also decreased.

Cannabis Industry Gains Legitimacy with “Essential Business” Classification

Beyond the direct advantage of dispensaries being allowed to remain open and operational during COVID, the classification of dispensaries as “essential” also had an indirect advantage of further legitimizing the cannabis industry. For many in the industry, this classification could be seen by the public as symbolic and might help to embolden those who are seeking to legalize cannabis in more states and, potentially, at the federal level.

Contact Scythian Real Estate for Information on Cannabis Financing

Scythian Real Estate is a privately held cannabis real estate fund that provides financing and operational assistance to some of the country’s most sophisticated cannabis operators. For more information, email us today.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

2020 in Review: States Vote to Legalize Cannabis

There were some major cannabis legal developments in 2020, many of which reflected a more welcoming environment for the cannabis industry in the United States as more and more states legalize marijuana. One of the most significant developments came on election night as voters in Arizona, Mississippi, Montana, New Jersey, and South Dakota chose to legalize cannabis for either recreational use or medical use.

To learn more about states voting to legalize cannabis in 2020, continue reading this blog. And don’t forget to check out other entries in Scythian’s “2020 in Review” blog series: Part 2 on the cannabis industry thriving during the COVID-19 pandemic and Part 3 on Congress decriminalizing marijuana.

Arizona, Mississippi, Montana, New Jersey, and South Dakota Vote to Legalize Cannabis

Perhaps the biggest development in the cannabis world last year was the overwhelming success of cannabis legalization measures on November 3. On election night 2020, voters in five (5) states were able to voice their support for the legalization of cannabis in Arizona, Mississippi, Montana, New Jersey, and South Dakota. The result: a clean sweep for cannabis legalization.

Voters in all five states were in favor of cannabis reform, choosing to legalize cannabis for either recreational use or medical use. In all five states, the margin of victory was clear and decisive: the South Dakota medical cannabis measure passed with nearly 70% of the vote, and the Mississippi medical marijuana measure passed with 62% of the vote. Moreover, exit polls on election night showed that there was a bipartisan consensus that included both Republicans and Democrats voting in favor of cannabis legalization.

South Dakota voters made history by becoming the first state to go from a total ban on adult-use cannabis to complete legalization: both recreational use and medical use will soon be allowed in South Dakota. The state’s medical cannabis law will go into effect first, to be followed later by implementation of the recreational cannabis law. Meanwhile, Arizona, Montana, and New Jersey are set to legalize cannabis for recreational use, and Mississippi will be legalizing cannabis for medical use.

Cannabis Legalization to Boost State Tax Revenues

The legalization of cannabis in Arizona, Mississippi, Montana, New Jersey, and South Dakota is expected to provide local municipalities with significant tax revenues. That’s because the cannabis reform laws will have provisions that allow for the regulation and taxation of legal cannabis sales by state-licensed dispensaries. At a time when many states are struggling due to the COVID-19 pandemic, additional tax revenues generated by adult-use cannabis sales should provide a much-needed boost to state and local economies.

What Is the Future of Cannabis Legalization in the United States?

A total of 36 states have now legalized medical cannabis use, with 15 of those states also legalizing cannabis for recreational use. The strong support for marijuana legalization in different regions of the country – East, West, South, and Midwest – on Election Night 2020 suggests that more states could be legalizing cannabis in the years ahead. There are already efforts underway to get cannabis legalization on the 2022 ballot in several mid-Atlantic states, including Connecticut, New York, and Pennsylvania.

The continued push for marijuana legalization across the U.S. should provide a significant boost to the cannabis industry. There has been a surge in cannabis acquisitions and investments by major players in the U.S. cannabis industry as more states look primed to legalize cannabis either through legislation or ballot measures.

Contact Scythian Cannabis Real Estate

Scythian Real Estate, which is based out of Colorado, is a privately held cannabis real estate fund that works with many of the largest cannabis operators in the country. Cannabis operators that are looking to expand their reach into new markets should contact Scythian Real Estate for additional information.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.