America’s Missed Opportunity in the Global Marijuana Market

After attending the International Cannabis Business Conference (ICBC) in Berlin at the end of April, I was reminded, yet again, of how draconian U.S. marijuana laws truly are. The excitement throughout the event was palpable. Much of it was driven by Germany’s newly formed government keeping its quasi-legalization policy intact, even if adult-use trials remain uncertain. Optimism surrounding the European cannabis market was everywhere. Unfortunately, state-legal U.S. marijuana operators can’t share in this enthusiasm.

Of note, in this blog post I use the word “cannabis” when referring to the entire plant; it is also the word used in the 1961 Single Convention. I use the word “marijuana” to refer to cannabis exceeding 0.3% THC and “hemp” when referring to cannabis at, or below, 0.3% THC.

U.S. marijuana policy: stuck in the past

Despite growing state-level legalization, federal marijuana policy in the United States still tracks closer to authoritarian regimes like Russia and China than to progressive jurisdictions like Europe and Canada. Most countries with any type of marijuana program now acknowledge both medical and scientific marijuana. In contrast, the U.S. only acknowledges marijuana for scientific research – and even that is highly restricted.

As I discussed in The Hidden Potential Winners of Marijuana Rescheduling: DEA-Registered Bulk Manufacturers, U.S. marijuana policy permits only marijuana for research purposes. And even within that narrow scope, access is tightly limited: only eight DEA-registered bulk manufacturers are allowed to participate. While this sounds like a valuable niche, the reality is that global demand for marijuana, solely for research, is extremely limited. U.S. policy effectively shuts the door to broader international market participation.

Hemp faces its own barriers

The global picture for hemp isn’t much better for U.S. hemp operators. Due to a patchwork international regulation, U.S. hemp operators also face limited access to foreign markets. If a hemp consumable or cosmetic product contains no THC, some opportunities exist. But if there are even trace amounts of THC, most, if not all, markets remain closed. On the bright side, consumable and cosmetic hemp operators have far fewer regulatory burdens domestically compared to marijuana businesses; giving them broader U.S. market access, lower regulatory costs, and better tax and banking treatment.

The Schedule III mirage

While there’s hope that marijuana might still be rescheduled to Schedule III, that shift won’t open up the global market to state legal U.S. operators. With the global cannabis market expected to reach $82.3 billion by 2027 – driven by both expanded medical and recreational use – American businesses risk being sidelined. Beyond lost market access, the U.S. is also forfeiting the opportunity to shape and lead the global marijuana supply chain for decades to come.

How the U.S. could still join the global market

Despite the current federal ban, there are several pathways the U.S. could take to enter the global marijuana economy:

1. Through DEA/DOJ agency action: cultivation and export-only model

Many countries, particularly in Africa, have embraced this strategy – legalizing marijuana cultivation, manufacturing, and export for medical and scientific use, without allowing domestic consumption. If the U.S. moved marijuana to at least Schedule II, the DEA could authorize exports without obtaining Congressional approval. A DEA registrant could contract with a foreign medical marijuana operator, and if the DEA approved the export, the U.S. could begin exporting marijuana into legal foreign medical markets (subject to meeting GMP, GACP, and other foreign requirements of course). This limited but effective approach could quickly integrate U.S. marijuana producers into the global supply chain. The best part about it is that it would not require any Congressional action. Either DEA could move marijuana to schedule II or III under HHS’ current scheduling recommendation, or Attorney General Bondi could unilaterally move it to any schedule under 21 U.S.C. 811(d)(1) authority.

2. Through legislation: STATES 2.0 Act—with a strategic amendment

I have been saying for years that legalization in the U.S. will occur only under a Republican-led government, and the STATES 2.0 Act offers the most realistic vehicle. At just 15 pages, it avoids the political pitfalls of Democratic proposals like the 296-page Cannabis Administration and Opportunity Act (CAOA), which was ultimately unworkable due to burdensome tax policies and robust social equity provisions. While social equity is important, Democrats need to realize the legalization itself provides for social equity. Also, the unfortunate reality is that any bill containing robust social equity provisions will be dead on arrival in the Senate and won’t achieve the 60 votes necessary for passage.

The STATES 2.0 bill is clean, simple, and avoids controversial social equity and tax provisions. That said, one small amendment could make a big difference: allowing state-legal operators to apply to the DEA for export quotas. Operators willing to meet global GMP or GACP standards could then access international medical markets – assuming, of course, the DEA cooperates.

3. Through international engagement: Inter Se modification of international drug treaties

This is where it gets a bit nerdy, but also exciting.

During ICBC there was much talk about amending the treaties to align with modern realities. Unfortunately, removing “cannabis” from the Single Convention is unlikely due to voting requirements (although see this article from IDPC for an interesting discussion on recent voting changes at the Commission on Narcotic Drugs). There is, however, another option.

Under international law, countries that are party to a treaty may form a sub-agreement – known as an Inter Se modification – among themselves. While this reform measure has been used in other contexts, it has not been legally tested as applied to the three international drug treaties. Inter Se modification would allow a group of like-minded countries to legally regulate the production, trade, and consumption of marijuana for adult-use, without violating their broader treaty obligations under international law.

The agreement would still require a commitment to promoting global health and welfare and maintain compliance with other treaty obligations for non-participant countries. Early signs from countries like Canada and Switzerland—where adult-use programs have shown health benefits to society like reduced youth access, declining beer sales, and shrinking black markets – offer a compelling case for an Inter Se approach based on public health. And such evidence would provide some legal and political cover for countries to attempt this approach.

If the U.S. partnered with, say, Canada in such an agreement (putting aside the current political climate between Canada and the U.S.), the U.S. could begin engaging in global marijuana trade, even for non-medical and non-scientific use, without waiting for full international treaty reform.

The Schrödinger’s cat of the cannabis industry

One of the stranger paradoxes in both U.S. and global cannabis policy lies in how marijuana genetics are treated – what I call the Schrödinger’s cat of the cannabis world. Under current U.S. law (and in many international jurisdictions), marijuana genetics, such as seeds or clones, are generally classified as hemp until they grow into plants that exceed a THC threshold, typically between 0.2% and 1%, depending on the country.

This legal quirk creates a strange scenario: U.S. marijuana operators are barred from participating in the international marijuana market when it comes to finished products and flower, yet they are allowed to participate in the global trade of marijuana genetics (subject to state law permitting the export). Seeds and other genetic material (i.e. clones and tissue cultures, although they are more restricted) can cross many global borders under legal exceptions, even if the plants they’ll eventually produce are illegal under a country’s federal law.

This disconnect highlights the inconsistency and inefficiency of current global marijuana policy. If the genetics themselves are permitted for international trade, prohibiting trade in the products those genetics produce makes little practical or policy sense. It’s another example of how outdated frameworks continue to constrain rational U.S. marijuana policy, and why comprehensive reform is long overdue.

Conclusion: global marijuana is moving on—without the U.S.

The rest of the world is moving forward on marijuana policy, while the U.S. continues to trip over its own outdated federal laws. Despite robust domestic regulated markets, U.S. marijuana operators are locked out of a booming international industry that’s forecasted to explode in value over the next few years.

Federal rescheduling won’t fix this – state operators will still be prohibited from entering the international market. Real progress requires strategic policy shifts – whether through export-only programs, legislative fixes like STATES 2.0, or bold international agreements like Inter Se modification.

Until U.S. policymakers confront the disconnect between domestic success and international irrelevance, American marijuana businesses will remain bystanders in a race they helped start.