When 38 states in U.S. have legalized marijuana but the federal government has not, the cannabis industry — including LED lighting vendors that supply it — is bound to encounter friction that slows things down.
"Cannabis is not legal federally, and because of that, we have lots of discrepancies between state law and federal law, and this creates a lot of problems, confusion, and fear — and opportunity loss for our industry and for our economy," said Saphira Galoob, CEO of Washington, D.C.–based cannabis lobbying firm The Liaison Group.
Galoob was speaking with David Cohen, CEO of Austin, Texas–based horticultural lighting provider Fluence, in an installment of the company’s online video series Fluence Unfiltered. The two were discussing Congress’ failure so far to pass legislation that would make banks more likely to provide services to cannabis operations. The legislation is called the SAFE Banking Act of 2021. SAFE "generally prohibits a federal banking regulator from penalizing a depository institution for providing banking services to a legitimate cannabis-related business," the Library of Congress explains.
As mentioned in an earlier episode of the series, the industry’s ultimate goal is federal legalization. Although that is not on the near-term horizon, another bill called the MORE Act (Marijuana Opportunity Reinvestment and Expungement Act) is currently under consideration. MORE would decriminalize marijuana by removing it from the list of scheduled substances under the Controlled Substances Act. It would eliminate criminal penalties for an individual who manufactures, distributes, or possesses marijuana. It has passed the House and is currently in the Senate’s Committee on Finance.
As illustrated by SAFE and MORE, however, Congress is dragging its feet on cannabis. SAFE has passed the House six times but never won approval in the Senate. MORE has been kicking around since May 2021.
"Members of Congress in D.C., they’re a little slower to understand," Galoob told Cohen, in comparing federal acceptance of cannabis’ medical and other benefits to acceptance by other parties. Although support has been growing on Capitol Hill, "it really has been an educational requirement for us," she said.
Fluence’s Cohen applied a positive spin, noting that "it’s actually moving at the speed of light — it’s just that there’s a long way to go." Fluence, now part of Signify, is a leading provider of LED lighting to the trade.
Galoob pointed out that administrative uncertainty is holding back progress.
"Folks are very concerned and want to make sure that the federal agencies — the FDA [Food and Drug Administration], the TTB [Alcohol and Tobacco Tax and Trade Bureau], Department of Agriculture, Homeland Security — all the federal agencies that make up our federal government, what is their role in the cannabis industry?" she noted. "And it’s not entirely clear."
In addition to running The Liaison Group, Galoob is also the executive director of D.C.–based industry association National Cannabis Roundtable.
"The legalization of cannabis is not a moment, it's a process," she said.
While the federal/state imbalances might indeed be holding back growth, the industry is still managing to grow revenues quickly. According to Grand View Research, the global legal marijuana market totaled $13.2 billion in 2021 and will have a compound annual growth rate of 25.5% to 2030; the U.S. share in 2021 was $9.2 billion.
MARK HALPER is a contributing editor for LEDs Magazine, and an energy, technology, and business journalist ([email protected]).
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