The rising popularity of Dry January among younger Americans may benefit weed sales and the growing cannabis industry.
During this year's month-long adult beverage abstinence trend, sales at three of the largest U.S. liquor chains hit a post-pandemic low. More specifically, alcohol sales fell by 52% in the first week of the year, the most on record.
In lieu of alcohol consumption, 34% of adults between 21 and 24 years old and 24% of adults between 25 and 34 years old use CBD or cannabis products. Legacy markets like Oregon and Colorado also tend to see their most significant sales increases during the first month of the year.
"Anecdotally, we have a lot of people coming into our dispensaries that are saying they are not drinking for January and therefore they're now upping their cannabis purchases," said Curaleaf Holdings (CURLF) CEO Matt Darin said, as reported by Bloomberg.
As more states push to legalize cannabis, it will be exciting to dig into the data and learn more about what consumer trends have been with cannabis form factors during January. With that said, it would be ill-advised to think that many of the major investors in the alcohol industry will not be a part of Dry January. The alcohol industry is watching and likely to be very actively involved in cannabis in a post-rescheduling, federal legalization world.
Government review supports cannabis reclassification
The month of January felt like 100 days instead of just 31, but it ended with a promising step in the right direction. Recently, the Department of Health and Human Services (HHS) shared documents supporting the recommendation to reclassify cannabis as a Schedule III substance under the Controlled Substances Act (CSA).
"Upon consideration of the eight factors determinative of control of a substance under 21 U.S.C. 811(c), the Food and Drug Administration (FDA) recommends that marijuana be placed in Schedule III of the CSA. The National Institute on Drug Abuse has reviewed the enclosed documents (which were prepared by FDA's Controlled Substance Staff and are the basis for FDA's recommendation) and concurs with FDA's recommendation. Marijuana meets the findings for control in Schedule III," the documents stated.
The extensive report also acknowledges the medical benefits of the plant and indicates that cannabis is less harmful than alcohol, a non-scheduled substance.
"Although abuse of marijuana produces clear evidence of harmful consequences, including substance use disorder, they are relatively less common and less harmful than some other comparator drugs," a passage from the report reads.
HHS first recommended rescheduling cannabis as a Schedule III substance last August. Six months later, the publication of this review emphasizes the need to reschedule cannabis yet again. Yet, the Drug Enforcement Agency (DEA) has not made any definitive progress regarding rescheduling the substance.
As the calendar flips into February and the industry awaits any movement on Capitol Hill, several questions remain. These include why is it federally illegal and why has the DEA yet to respond?
DOJ seeks to dismiss lawsuit challenging federal legalization
Another page has turned in the effort to legalize cannabis federally.
In October, four state-licensed cannabis companies enlisted the Boies Schiller Flexner law firm to confront the federal illegality of cannabis. The suit challenges the outcome of 2005's Gonzalez vs Raich landmark ruling and claims the Controlled Substances Act is unconstitutional and stunts the growth of businesses nationwide.
"The application of the CSA to lawful state-run cannabis business is an unconstitutional overreach on state sovereignty that has led to decades of harm, failed businesses, lost jobs, and unsafe working conditions," said Darren Weiss, president of Verano, one of the cannabis companies named in the lawsuit.
Two months later, attorneys for the Department of Justice argue the lawsuit lacks standing and threatens to delay the reclassification of cannabis under the Controlled Substances Act.
"Yet the Court should not even reach the merits because the Plaintiffs lack standing to challenge the CSA. To raise a pre-enforcement challenge to a law, a plaintiff must show a substantial risk of future enforcement," the motion reads. "Neither Plaintiffs' contention that they are harmed by other federal laws and policies whose constitutionality is not challenged here, nor Plaintiffs' allegations that some third parties have independently chosen not to transact with them, suffice to provide Plaintiffs with standing to challenge the CSA."
The Department of Justice's motion to dismiss the lawsuit is not a surprise, but it is encouraging to see industry leaders challenge cannabis prohibition at the federal level. To create change and end the illegalization of cannabis, industry leaders must take action and place pressure on federal officials, which is difficult to do through legislative channels. The efforts of these four plaintiffs will hopefully encourage others to explore legal avenues to create change in the future.
Most Americans support federal cannabis legalization
Support for federal cannabis legalization continues to trend upward. A recent survey conducted by the Tarrance Group captured the disposition of 1,000 likely voters regarding the end of federal cannabis prohibition. Nearly 60% of survey participants expressed a desire for the federal government to legalize cannabis in all 50 states. Furthermore, 35% of respondents not only hope to see the end of cannabis prohibition, but they also "strongly" support the federal legalization of cannabis.
The push to end cannabis prohibition is garnering support along both sides of the political aisle. Sixty-seven percent of Democrats and nearly half of Republicans are in favor of legalizing cannabis nationwide. Similarly, age did not prove to be a dividing factor in the push to end cannabis prohibition. While 67% of respondents between 18 and 44 years old support the end of cannabis prohibition, 47% of survey participants older than 65 also support federal cannabis legalization.
American voters want to see change. Age, political party nor gender divide voters on the topic of cannabis legalization. However, federal officials continue to move slowly when considering policy changes as people land in jail, businesses struggle and advocates work tirelessly in hopes of creating a brighter future.
Fortunately, there is still time to make progress on this matter. The DEA can act on the Department of Health and Human Services' recommendation and reclassify cannabis as a Schedule III substance. As time passes, one has to wonder what valid reason they have for taking this long to act on the recommendation.
