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A Path Forward: Combating the Illicit Cannabis Market Through Federal Refor

The United States is in the midst of a transformative shift in its approach to cannabis. With 38 states having legalized medical cannabis and 23 of them allowing for adult recreational use, the era of cannabis prohibition is steadily fading into history. However, this evolution has not come without challenges.

The illicit cannabis market continues to thrive, posing risks to public safety and undermining the objectives of legal cannabis programs. As we stand on the cusp of federal cannabis reform, it is imperative to devise a comprehensive strategy to tackle this persistent issue.

The illicit cannabis market, as it stands today, operates through two distinct sectors: the illicit market and the gray market. The illicit market encompasses all aspects of the cannabis supply chain that exist outside the bounds of legality and regulation. On the other hand, the gray market involves unregulated cannabis activities occurring within the context of decriminalization or legal cannabis markets. While both sectors pose concerns, it is the large-scale operations of organized criminal enterprises within the illicit market that demand immediate attention.

To effectively combat the illicit cannabis market, we (as in federal lawmakers) must address its root causes. These causes are primarily twofold: economic factors and public policy, or rather, the lack thereof. Federal inaction on cannabis reform has created a disjointed and inconsistent landscape of cannabis laws across the nation, leaving gaps for illicit operators to exploit.

Recent signals from the Biden administration show the White House is willing to come to the table on federal cannabis reform. Now, it’s time for Congress to put forth commonsense and bipartisan proposals that would allow states to determine legality how they see fit. Such reform could usher in a new framework for regulatory standards and even present a unique opportunity to tackle the illicit market head-on.

In this context, the Coalition for Cannabis Policy, Education, and Regulation worked with experts to present a set of data-informed policy recommendations aimed at dismantling the illicit cannabis market under a reformed federal framework.

1. Interoperable Traceability of Products: Establishing a centralized track-and-trace system or a national inventory control mechanism is essential to monitor legal cannabis product movements within and across state borders. This standardized system can help law enforcement identify supply chain inversions and diversions, preventing illegal cannabis from infiltrating states with prohibitive laws.

2. Utilize Alternative Data Sources: In addition to the national track-and-trace system, authorities should harness alternative data sources to uncover illicit activities occurring outside legal markets. These sources could include ecological indicators of illegal cultivation sites, instances of human trafficking related to cannabis, and insights from national consumer surveys identifying illicit consumer demand.

3. Implement Cannabis Tax Stamps: Introduce a cannabis tax stamp system to distinguish legal products from illicit ones. These stamps can serve as proof of tax payment and aid in reducing tax evasion, as well as supply chain diversion and inversion.

4. Federal Guidelines for Uniform Regulations: The federal government should establish minimum standards for cannabis regulations pertaining to public health and safety, including testing, packaging, labeling, manufacturing, and advertising. These standards should be applicable to all states with cannabis programs.

5. Create a Federal Cannabis Task Force: Form a national task force comprising policymakers, regulators, equity and justice advocates, law enforcement agencies, public health experts, and industry representatives. This task force should focus on policy development and allocate resources for crucial cannabis-related research.

6. Ongoing Federal Guidance: Federal agencies, such as the Department of Justice and the National Office of Drug Control Policy, should provide regular and up-to-date guidance to local and state law enforcement agencies on enforcing priorities related to the illicit cannabis market and related illegal activities.

7. Allocate Federal Funding: To implement these recommendations effectively, additional federal funding would be required. A portion of federal cannabis tax revenue should be earmarked for comprehensive enforcement efforts against the illicit market.

In conclusion, as we move toward a new era of federal cannabis reform, the persistent illicit cannabis market must be addressed through a multifaceted strategy. By adopting these policy recommendations, we can create a unified approach that combines regulation, enforcement, and funding to systematically dismantle the illicit cannabis trade. It is time to turn the page on the prohibition era and usher in a new era of responsible and legal cannabis use in the United States.

The Newsweek Expert Forum is an invitation-only network of influential leaders, experts, executives, and entrepreneurs who share their insights with our audience.What’s this?Content labeled as the Expert Forum is produced and managed by Newsweek Expert Forum, a fee based, invitation only membership community. The opinions expressed in this content do not necessarily reflect the opinion of Newsweek or the Newsweek Expert Forum.

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