Interstate Commerce Cometh
An Interview with Adam Smith
Ask most cannabis executives or investors when interstate commerce might happen, and most will answer that we would be lucky to see it in “10 to 20 years.” Considering the short-sighted nature of most investors, this is the equivalent of saying it may never happen, or it won’t happen in any time frame that matters.
But Adam Smith of the Alliance for Sensible Markets thinks that interstate commerce is going to happen much, much faster than anyone in the cannabis industry thinks.
His best guess is that by the early part of 2024, there will be at least one state (probably California) shipping cannabis to another state like Nevada or possibly New Jersey, or one of five other states.
First, let’s pause and explain why you should listen to Adam Smith. He helped write the interstate commerce law that first passed in 2019 in Oregon and the one that just passed in California this month. He has been doing real work on drug policy reform since 1998. This isn’t his first rodeo on drug reform and policy changes.
Here are the key points from our interview:
1. Adam thinks that we’ll see California move first. He thinks that California Governor Gavin Newsom will ask his Attorney General Rob Bonta to conduct a review to see if interstate commerce adds legal liability to California. Since there is no difference from a Federal level whether commerce happens intrastate or interstate, he expects the Attorney General to come back quickly and give the green light. Remember, I interviewed Vanderbilt Law Professor Robert Mikos on how interstate commerce restrictions are unconstitutional.
2. After the Attorney General gives the green light, he expects California to engage in conversations with 5 to 10 states who are natural consumers and probably have been consumer states from an illicit perspective for decades. Oregon may or may not tag along in the negotiations. Adam expects for these conversations to happen next year.
3. Adam then expects the first agreement and shipment of cannabis to occur as early as the beginning of 2024. He thinks interstate commerce may happen with a medicinal market first.
His interview really has my head spinning. The only real reform on cannabis has come from states leading the way, not the Federal government. So, it makes sense that states would lead on interstate commerce pacts as well.
After further reflection, my big takeaway from the interview is that cannabis is a big political opportunity for Governor Gavin Newsom.
One of the things that has hurt Federal reform of cannabis the most is that there hasn’t been much to gain in accomplishing anything in cannabis for any powerful politician’s gain. We have had advocates like Representative Earl Perlmutter and Representative Nancy Mace, but everyone has treated cannabis as a thing to trot out, but never accomplish anything on.
I think that may change with Governor Gavin Newsom. He has an opportunity to take leadership of an issue that is immensely popular across the country and stake claim as someone with executive power who can make change happen. For someone who might have Presidential aspirations, cannabis is an easy issue and an easy win that just happens to make both the current President and Republican adversaries uncomfortable.
The craziest part of thinking about interstate commerce is thinking about how every cannabis investor has been waiting for SAFE Banking, but instead what if the real reform comes instead in the form of interstate commerce?!
The whole interview is worth listening to. And please let me know what you think! I would love the feedback.
Audio Interview With Adam Smith
Written Transcript of Adam Smith Interview