The cannabis industry is at a critical juncture. While state-level legalization efforts have faced setbacks, federal reform has gained new momentum following the 2024 election. With former President Donald Trump re-elected and a seemingly “pro-business” administration taking shape, the possibility of federal legalization is sparking debate about the future of this dynamic industry.
2024 highlighted the uneven progress of cannabis reform at the state level. In Florida, Amendment 3—a proposal to legalize recreational cannabis—secured 57% of the vote but fell short of the 60% supermajority required for passage. Critics argued the bill favored existing medical cannabis operators, creating a monopolistic framework. However, proponents saw it as an imperative step in the right direction towards the decriminalization of cannabis.
Other states, like North Dakota and Arkansas, also rejected measures to expand legalization, reflecting persistent divides in public opinion and the strong influence of conservative opposition in shaping cannabis policy.
Despite these state-level hurdles, federal legalization appears more plausible than ever. According to Politico, Congressman Matt Gaetz, a likely pick for Attorney General in the Trump administration, has emerged as a critical liaison between cannabis stakeholders and the White House. David Culver of the U.S. Cannabis Council observed, “Gaetz has been involved in all the major pieces of cannabis reform that have surfaced over the years,” signaling that cannabis reform could gain significant traction at the federal level.
Federal cannabis legalization would represent a seismic shift for the industry. Here are key impacts to consider:
Access to traditional banking services has been a longstanding challenge for cannabis businesses due to federal prohibitions. Legalization would open the door for banks to offer loans, credit lines, and other financial services. A report covered by Marijuana Moment projects that banks could generate over $2 billion in interest revenue from cannabis businesses by 2035, underscoring the financial opportunities legalization would bring.
Federal legalization would remove barriers to interstate trade, potentially allowing states like California to supply cannabis to underserved markets across the U.S. It could also position the U.S. as a global leader in cannabis production, potentially exporting to countries with emerging markets. This may also pressure state lawmakers to align their policies with federal standards to capitalize on economic opportunities. However, a recent NPR article also referenced a David Culver statement:
"Culver says he doesn't think cannabis will be a top priority for Trump as he takes office. As for what a Trump-era cannabis policy might look like, he suggests the federal government might form a regulatory structure that leaves "the bulk of the regulations to the states, just like we do with beverage alcohol."
This approach could muddy the waters of interstate commerce if there continues to be strong political resistance to cannabis in certain states.
While legalization offers massive growth potential, it also raises concerns about monopolization. Federal regulation could give larger corporations with ample resources a significant advantage, potentially marginalizing smaller independent growers with burdensome compliance costs, thus reducing industry diversity. Even though it is believed that the incoming administration would leave compliance laws to the states, we cannot be sure until we see the framework of a federal plan to legalize recreational cannabis.
Legalization would catalyze innovation and further investment in cultivation technology, including advanced lighting systems, nutrient delivery methods, and environmental controls. Companies like Growlink could play a central role in modernizing cannabis farming practices, enabling the ability to maintain quality production at scale.
While optimism around federal legalization grows, it wouldn't be without challenges. We reached out to a prominent cannabis advocate who is active in Kansas, known on X as "Greenthumb Wisdom" (@Greenthumb_one). He explained that in Kansas, law enforcement lobbyists have been pressuring Kansas legislators into believing that regulating hemp, which was federally legalized in 2018, would equate to legalizing "recreational marijuana". He believes that as a result of this:
"This has directly caused Kansas to have one of the most saturated, unregulated markets of alternative cannabinoid products in the United States. Nothing publicly available is quality controlled or tested, so consumers have minimal knowledge about what they are purchasing, which is a public health concern. What has transpired is an inconsistent patchwork of enforcement of hemp laws throughout Kansas since it was legalized in 2018. Stores selling federally legal hemp-derived products have been raided in at least six counties over the span of 5 years, most of which have been covered by local news outlets".
This highlights that even with federal legalization, there will still likely be work to do at the state level.
A rise in bipartisan support for rescheduling cannabis suggests that reform is no longer a question of “if” but “when.” Federal legalization could unlock economic benefits across all facets of the industry. Beyond industry-specific gains, proponents argue that legalization could serve as a boon for federal tax revenue, offering a new stream of income to address the national debt—a growing concern among Americans as fiscal awareness rises.
At Growlink, we are prepared to help growers navigate this evolving landscape with cutting-edge technology and expertise. The road ahead may be uncertain, but the opportunities for progress and prosperity have never been greater.