A pair of Democratic congressional lawmakers have introduced a bill intended to help small marijuana growers compete against large corporations when cannabis is federally legalized—proposing to give them the ability to ship and sell products directly to consumers within and across state lines via the U.S. Postal Service (USPS) and commercial carriers.
The legislation—titled the “Small and Homestead Independent Producers (SHIP) Act—is being sponsored by Reps. Jared Huffman (D-CA) and Val Hoyle (D-OR). It represents a slightly revised version of a measure filed two sessions ago that was not ultimately enacted.
As Congress continues to work toward ending cannabis prohibition, there have been concerns that smaller businesses will struggle to compete against the handful of multi-state operators that have the resources and infrastructure to quickly expand, threatening to further consolidate the market when the federal floodgates finally open.
The SHIP Act is designed to minimize that risk and maximize opportunities for those smaller farmers and producers.
“Larger, commercialized cannabis operators are infiltrating the market and squeezing out our local farmers in the process,” Huffman said in a press release on Tuesday. “So when the antiquated federal prohibition on cannabis finally gets repealed, we need to have substantial legislation ready to help these small businesses survive.”
“My legislation would ensure that folks can ship their products straight to consumers, which would both help expand small businesses and ensure farmers stay afloat,” he said. “When full legalization is guaranteed, we must commit to not leaving our smallest family-farmers behind.”
The proposal has been amended in certain ways compared to the original version, including a new requirement that the Postal Service or “any private or commercial interstate carrier” transporting cannabis must verify that recipients of cannabis products are at least 21 years old.
It also clarifies provisions related to federal preemption of state marijuana laws as it concerns interstate commerce, making it clear that states that prohibit cannabis can continue to do so, except that they can’t prevent the transportation of marijuana across their borders. On the flip side, states with legal marijuana programs would be preempted by federal law “to the extent that such laws restrict the interstate or intrastate shipment of cannabis or a cannabis product directly to an individual with respect to whom the possession of cannabis or a cannabis product is lawful under the laws of the State.”
Finally, the latest version includes a new section that would amend U.S. postal laws by stipulating that the “Postal Service is authorized and directed to permit the transmission in the mails, under regulations to be prescribed by it, of cannabis.”
“For years, the federal government has failed to keep up with the changing pace of our economy, and the cannabis industry has suffered the consequences,” Huffman said. “Current federal prohibition standards are undeniably outdated, and we need this legislation ready for the day they are repealed. My bill would ensure California farmers and producers can ship their products straight to consumers, which inherently protects our local agriculture industry and small businesses up and down the North Coast.”
Direct-to-consumer models have historically benefitted small farmers in traditional agriculture markets, allowing them to bring their products to market without going through third-party distributors or retailers that would require additional spending.
The SHIP Act would extend that marketing opportunity to the cannabis sector, but only after marijuana is federally descheduled.
“Nearly 15 years into the experiment of state-level cannabis legalization, the cracks in the system are clear: small and craft producers are being pushed to the margins, safe access for consumers and patients is shrinking, and the industry is consolidating into the hands of a few,” Ross Gordon, co-founder of the National Craft Cannabis Coalition (NCCC) and a policy analyst at Origins Council, said.
“Without direct-to-consumer shipping, federal cannabis legalization risks reinforcing these failures instead of correcting them,” he said. “The SHIP Act is a make-or-break policy for the future of small cannabis businesses in California and across the country.”
Frederika McClary Easley, president of the Minority Cannabis Business Association (MCBA), said the “regulation of cannabis has, unfortunately, not equated to adequate access.”
“Many patients and consumers navigate plant deserts that have been created due to municipal opt-outs and zoning restrictions,” she said. “The SHIP Act will help to address this while prioritizing access for small craft producers, which in turn positively impacts their success and sustainability. MCBA is proud to support this piece of federal legislation that recognizes the importance of craft growing and small businesses as the bedrock of this burgeoning industry.”
The text of the legislation states that a “small cultivator of cannabis and a small manufacturer of a cannabis product located in a State in which such cultivation or manufacture is lawful by that small cultivator or small manufacturer, as applicable, may ship and sell cannabis or a cannabis product to an individual located in that State or another State in which possession of cannabis or the cannabis product is lawful by that individual, using the United States Postal Service or any private or commercial interstate carrier.”
Small cultivators are defined as those who grow up to one acre of “mature flowering cannabis plant canopy” for outdoor cultivation, up to 22,000 square feet of cannabis canopy using greenhouses or up to 5,000 square feet for indoor cultivation.
For manufacturers, they would meet the definition of a small operation if they produce “a manufactured cannabis product, including a salve, tincture, edible, or concentrate, with a gross annual revenue of less than $5,000,000, inclusive of all cannabis product manufactured by that person.”
“California has made indelible contributions to the global medical and craft cannabis movements, but today the Golden State’s small, independent, and homestead cannabis farmers are facing existential barriers to their success,” NCCC co-founder and Origins Council executive director Genine Coleman. “Without addressing the market access crisis facing craft producers all across the nation, patients and consumers are at risk of irreversibly losing access to important products and genetics. We are grateful to Rep. Huffman for his leadership in introducing the SHIP Act, which offers a definitive solution to this crisis.”
The bill is also being backed by the National Cannabis Industry Association (NCIA), Drug Policy Alliance (DPA), Parabola Center, Marijuana Justice, Veterans Cannabis Coalition and more.
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Meanwhile, in March, California officials unveiled a report on the status and future of the state’s marijuana market—with independent analysts hired by regulators concluding that the federal prohibition on cannabis that prevents interstate commerce is meaningfully bolstering the illicit market.
Gov. Gavin Newsom (D) did sign a bill in 2022 that would have empowered him to enter into interstate cannabis commerce agreements with other legal states, but that power was incumbent upon federal guidance or an assessment from the state attorney general that sanctioned such activity.
Following a review of the policy proposal, however, California Attorney General Rob Bonta’s (D) office ultimately determined in 2023 that the state could put itself and its employees at “significant legal risk” of federal enforcement action if it were to authorize interstate marijuana commerce.
A bipartisan congressional bill that was reintroduced in April to end federal marijuana prohibition in states that have legalized it also provides for lawful interstate commerce.
Photo courtesy of Mike Latimer.
