Report: Blanket Federal Legalization Could Upend State Markets

Broad legalization could lead to the weaponization of the Dormant Commerce Clause.

While much of the cannabis industry has its sights set on federal legalization of cannabis, not everyone is as excited about the tone that many of the conversations have taken.

“Excitement for federal legalization is mounting because state programs have led to good jobs and a lot of progress toward our goals of equity and justice,” Shaleen Title, founder and director of the Parabola Center for Law and Policy, said in a statement. “But flipping a switch to federally legalize marijuana would end all of that progress.”

The comment followed the release of a new report from the Parabola Center warning of the emergence of a U.S. marijuana monopoly if the federal government legalizes the drug.

Title suggested that gradual implementation that protects small businesses and workers is the fairest option for everyone. Such a strategy would focus on prioritizing social equity businesses, smaller enterprises, and worker-owned firms in the implementation of federal permission for interstate cannabis commerce.

“So, if you are in New York for example, the New York (intrastate) market would continue as is, but you could also order Oregon-grown marijuana,” Title told Green Market Report. “It could come from, say, a worker-owned collective there, transported by a small business, and be delivered to you by a locally owned delivery service. But Amazon wouldn’t be able to start shipping Amazon Basics weed to you yet.”

Tamar Todd, a seasoned drug policy attorney and lecturer at U.C. Berkeley School of Law, penned the report.

“How the nation will shift from dozens of individual state cannabis markets to one national market, and the implications of that shift, is unknown but likely to be dramatic,” Todd wrote. “It is also safe to assume that many advocates for federal de-scheduling are not aware of the consequences such a policy change portends for existing and entrenched state cannabis policies.”

Undermining Existing Schemas

Currently, most state cannabis markets are designed to support local businesses and foster justice-based initiatives. Many provide opportunities for historically marginalized communities and ensure a percentage of licenses go to small businesses.

However, Todd warned that such systems might violate the U.S. Constitution’s Commerce Clause, which restricts states from controlling interstate commerce.

If federal prohibition ends without the right measures in place, Todd posits that these state markets could be dismantled, resulting in domination by larger companies that could push out small businesses and undermine the equity initiatives states have carefully crafted.

But, Todd said, there’s a potential solution. Congress has the power to protect these state markets if it chooses to.

The Boston-based think tank recommends:

  • Letting states maintain their current cannabis regulations without interruption.
  • Prioritizing small, social equity, and worker-owned businesses in interstate cannabis trade.
  • Implementing measures to prevent large corporations from dominating the market, including anti-monopoly rules.

“While a consolidated interstate market may have benefits, the cannabis industry would quickly become like many other industries, dominated by a handful of powerful corporations that control the vast majority of the market and profits,” Todd wrote.

Without addressing that concern, federal legalization could open up additional legal challenges.

“Not only will these small, equity-owned businesses no longer be able to compete against large multistate and multinational corporations, but the application of the Dormant Commerce Clause will invalidate the components of the state laws designed to protect small and equity-owned businesses,” she continued.

“Out-of-state corporations and multistate businesses will use the Dormant Commerce Clause to challenge state cannabis laws that burden interstate commerce through residency requirements, or any other state protectionist measures that aim to control the size, scale, or make-up of the intrastate cannabis market.”

Adam Jackson

Adam Jackson writes about the cannabis industry for the Green Market Report. He previously covered the Missouri Statehouse for the Columbia Missourian and has written for the Missouri Independent. He most recently covered retail, restaurants and other consumer companies for Bloomberg Business News. You can find him on Twitter at @adam_sjackson and email him at


  • Brian Kelly

    October 26, 2023 at 4:09 am

    Legalize federally now. What’s legal to possess and consume in nearly half of The United States should not make you a criminal in states still being governed by woefully ignorant prohibitionist politicians.

    Cannabis consumers in all states deserve and demand equal rights and protections under our laws that are currently afforded to the drinkers of far more dangerous and deadly, yet perfectly legal, widely accepted, endlessly advertised and even glorified as an All-American pastime, alcohol.

    Plain and simple!

    Legalize Nationwide Federally Now!

    Fear of Cannabis Legalization Nationwide is unfounded. Not based on any science or fact whatsoever. So please prohibitionists, we beg you to give your scare tactics, “Conspiracy Theories” and “Doomsday Scenarios” over the inevitable Legalization of Cannabis Nationwide a rest. Nobody is buying them anymore these days. Okay?

    Furthermore, if all prohibitionists get when they look into that nice, big and shiny crystal ball of theirs, while wondering about the future of cannabis legalization, is horror, doom, and despair, well then I suggest they return that thing as quickly as possible and reclaim the money they shelled out for it, since it’s obviously defective.

    The “War on Cannabis” has been a complete and utter failure. It is the largest component of the broader yet equally unsuccessful “War on Drugs” that has cost our country over a trillion dollars.

    Instead of The United States wasting Billions upon Billions more of our yearly tax dollars fighting a never ending “War on Cannabis”, lets generate Billions of dollars, and improve the deficit instead. Especially now, due to Covid-19. It’s a no brainer.

    The Prohibition of Cannabis has also ruined the lives of many of our loved ones. In numbers greater than any other nation, our loved ones are being sent to jail and are being given permanent criminal records. Especially, if they happen to be of the “wrong” skin color or they happen to be from the “wrong” neighborhood. Which ruin their chances of employment for the rest of their lives, and for what reason?

    Cannabis is much safer to consume than alcohol. Yet do we lock people up for choosing to drink?

    Let’s end this hypocrisy now!

    The government should never attempt to legislate morality by creating victim-less cannabis “crimes” because it simply does not work and costs the taxpayers a fortune.

    Cannabis Legalization Nationwide is an inevitable reality that’s approaching much sooner than prohibitionists think and there is nothing they can do to stop it!

    Legalize Nationwide Federally Now! Support Each and Every Cannabis Legalization Initiative!

    There is absolutely no doubt now that the majority of Americans want to completely legalize cannabis nationwide. Our numbers grow on a daily basis.

    The prohibitionist view on cannabis is the viewpoint of a minority and rapidly shrinking percentage of Americans. It is based upon decades of lies and propaganda.

    Each and every tired old lie they have propagated has been thoroughly proven false by both science and society.

    Their tired old rhetoric no longer holds any validity. The vast majority of Americans have seen through the sham of cannabis prohibition in this day and age. The number of prohibitionists left shrinks on a daily basis.

    With their credibility shattered, and their not so hidden agendas visible to a much wiser public, what’s left for a cannabis prohibitionist to do?

    Maybe, just come to terms with the fact that Cannabis Legalization Nationwide is an inevitable reality that’s approaching much sooner than prohibitionists think, and there is nothing they can do to stop it!

    Legalize Nationwide!…and Support All Cannabis Legalization Efforts!


  • Somebody Somewhere

    October 26, 2023 at 9:41 am

    This isn’t even an article about whether or not to legalize nationally, much less one advocating to keep it illegal. This is about trying to influence the exact letter of the law so that the politicians can decide who gets to succeed in the market and who doesn’t. Unsurprisingly, the states that have legalized already – nearly all Democrat-controlled – have all made attempts to control the market tightly enough to direct profits towards their progressive projects. Now that it’s going federal, they have to work with Republicans, who typically say they have a problem with the idea of federal government picking winners and losers in the market – at the very least, they have a problem with Democrats picking winners and losers rather than being able to pick themselves. So yeah, I wouldn’t exactly call anything about this “plain and simple.” More like “politics as usual.”


  • John A

    October 27, 2023 at 1:40 am

    A no vote for Legalization, is a yes vote for the illicit market.
    Too much tax money has already been lost.
    Marijana is not going away.


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