Not much gets done in American politics, especially in Congress, without the influence of the hundreds of lobbyists that represent industries, labor, and other interest groups before Congress and federal agencies. The overwhelming role of lobbying has so far been seen as a net negative for the cannabis industry. Powerful alcohol, tobacco, private prison and pharmaceutical lobbies have every incentive to block federal cannabis reforms that could displace demand for competing products and certain prescription medication or cut down on prison time. Pessimists for the future of marijuana prohibition point to these groups as a primary impediment to generating the political will necessary to legislate an end to cannabis prohibition under the Controlled Substances Act.
In an effort to level the playing field, a coalition of cannabis industry leaders recently formed the New Federalism Fund (NFF). NFF aims to wield the increasing popular support and financial success of state-level cannabis programs to bring pressure on federal lawmakers to support progressive reform.
Who is NFF? Support for the group comes from a wide variety of cannabis industry stakeholders, both recreational and medical, and it runs the gamut from dispensaries to private equity funds. The most widely recognizable company on its founding board is Scotts Miracle-Gro, which entered the ancillary cannabis market in 2016. Other notables include LivWell EnlightenedHealth, Privateer Holdings, Native Roots, and Medicine Man.
NFF is organized as a 501(c)4 non-partisan lobbying organization.
What are NFF’s specific priorities? NFF’s website outlines the group’s founding initiatives for particular reforms and the following priorities:
State-first cannabis regulation. NFF advocates for a state-first approach to cannabis policy, emphasizing that it is the best framework for enhancing local economic prosperity through tax revenue and job creation, ensuring patient access, and diverting cannabis from the criminal market. NFF emphasizes the success of early cannabis states and their potential to serve as policy laboratories to serve as examples for other states as envisioned by the Tenth Amendment.
Codification of the Cole Memo. The tenuous legal authority of the Cole Memo is probably the most immediate threat to the cannabis industry. To that end, NFF advocates for codifying the memo’s hands-off approach to state marijuana legalization. Though Jeff Sessions recently signaled that the Cole Memo is still good authority, codification would provide the cannabis industry greater certainty.
Equitable taxation. NFF argues for changing IRC 280(e), the infamous tax provision that greatly limits cannabis businesses’ ability to take advantage of the tax advantages afforded other legal businesses.
Will NFF succeed? Who knows, and, for that matter, defining “success” in this context is tricky. So long as the federal government does not crack down on existing state cannabis programs, NFF may be able to claim victory simply for having helped to maintain the status quo. But, if the question is whether NFF will secure federal legalization of cannabis, the prospects for success dim significantly. Nonetheless, having a strong pro-marijuana lobby is in the interest of all cannabis stakeholders and is an important sign that the legalization movement is maturing.