A brief history of marijuana legalization in the US.

Did you know that marijuana hasn’t always been illegal in the United States?

In fact, marijuana is actually woven throughout US history. The Virginia Company planted the first hemp crop at Jamestown. George Washington grew it at Mount Vernon. It was even featured on the $10 bill for a time.

However, it wasn’t until cannabis was used as a pharmaceutical in the 1800s that it started to become regulated. Certain states and medical experts put it in the category of “poisons” which required specific labeling, and barred it from being sold in parts of the country.

And while, over the decades, states were cracking down on cannabis, it wasn’t until 1937 that the importation, cultivation, possession, and/or distribution of marijuana were federally regulated. The Marijuana Tax Act required those who participated in the trade of marijuana (importers, manufacturers, researchers, industrial users, etc.) to register and pay annual fees based on their use of the plant. Those who didn’t register were required to pay a hefty penalty, if caught.

The years that followed brought further oversight, regulations, and trips to the Supreme Court that further divided the country in terms of how cannabis could be used and what penalties could be levied.

In 1978, New Mexico became the first state to legalize medical use of cannabis and within four years, more than 30 states would follow suit in various forms. For example, some enacted programs to provide cannabis through federally approved research programs, others affirmed the right of individuals to present a medical necessity defense at trial.

Around the same time, there was a wave of 11 states decriminalizing cannabis, levying fines instead of criminal charges. It took another twenty years for the second wave to begin, when Nevada changed their laws in 2001. Since then, a number of states and cities have made similar moves.

It would take another ten years for the first states–Colorado and Washington–to legalize non-medicinal marijuana, moving to regulate it similarly to alcohol. As of December 2021, 21 states, territories, and Washington, DC have legalized recreational cannabis, with the vast majority allowing or planning licensed sales. And several states have marijuana related measures on the ballot in 2022.

For now, marijuana is still illegal under federal law. But, as cannabis becomes increasingly important to voters on both sides of the aisle, it is only a matter of time before that changes.

Like many who are watching the cannabis market, I believe that change is coming sooner rather than later–which will create vast opportunities for the industry, state and federal treasuries, and investors.

Danilo Diazgranados is an independent investor in the global food and wine, financial services, real estate, and the hospitality sectors.

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