Restrictions on how cannabis is transported have created 39 separate markets
Restrictions on how cannabis is transported have created 39 separate markets
Cannabis is now legal, for medical or adult recreational use, in 38 states and the District of Columbia. It’s grown into a $30 billion industry.
But although the Drug Enforcement Administration is reclassifying the drug as less dangerous, it remains illegal at the federal level. That means stringent rules govern the transportation of cannabis, which can leave some parts of the industry stranded on islands — sometimes literally.
For business owners on Martha’s Vineyard, Massachusetts, June usually marks the start of tourism season. In other words: moneymaking season. But that hasn’t panned out this year for Geoff Rose, owner of Island Time Cannabis Dispensary.
Rose’s shelves have been bare. He ran out of cannabis in May, after the island’s only licensed grower shut down. Massachusetts regulators forbade transport by boat, worried that it might run afoul of the feds. That means growers on the mainland couldn’t ship new inventory to the Vineyard.
“We sold down to the last 14 chocolate bars and closed the doors,” Rose said. “We were really in a crisis situation. I was gonna go out of business.”
Closing the dispensary would impact more than tourists hoping to kick back with a joint on the beach, said Martha’s Vineyard resident Sally Rizzo. “It’s a question of health access.”
Rizzo, who is retired, has a prescription for medical cannabis to treat insomnia and chronic back pain. “I’m not as bad off as a lot of people,” she said. “Just think about people that are under cancer treatment. They just don’t have access to what other people have in the state, and it’s just very, very unfortunate.”
Such situations aren’t uncommon in the pot industry — or rather, industries, said Rob Mikos, a law professor at Vanderbilt University. “You have this weird market structure where every single state has its own unique cannabis industry.”
California, Hawaii and Maine allow cannabis to move by boat, but only from one part of the state to another.
Crossing state lines is still prohibited, said Mikos — even between states where pot is legal. States “fear that if they ship product across state lines, they’re going to poke the hornet’s nest, provoke the federal government coming in and shutting down their industry,” he said.
But prohibition of interstate transport could violate the Commerce Clause of the Constitution, Mikos said. “Think of it as a free trade principle in the United States, so states can’t unduly burden interstate commerce in goods.”
For instance, Florida can’t ban oranges from California. So when it comes to limiting cannabis transport, “there’s a good argument to be made that some of these state laws could be challenged,” he added.
Since 2019, California, Oregon and Washington have passed bills to allow interstate transport — but only if the federal government agrees not to prosecute.
For now, pot markets remain siloed, with each state working out its own issues. Last week, Massachusetts approved cannabis transport by boat. For dispensary owner Geoff Rose, that meant “a combination of elation and relief.”
Rose’s next step: finding a grower who can ship pot from the mainland as soon as possible.
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