On a humid August morning in Ohio, long lines formed outside dispensaries as the state began its first legal recreational cannabis sales. Just three months later, voters in Florida, North Dakota, and South Dakota rejected similar measures at the ballot box. This stark contrast illustrates the complex and fragmented landscape of cannabis regulation in America today—a patchwork of policies that has created what legal scholars increasingly call “cannabis federalism.”
A Nation Divided
When Ohio’s dispensaries opened their doors to recreational customers on August 6, 2024, the Buckeye State became the 24th in the nation to legalize adult-use cannabis. That same day, hundreds of miles east in Washington D.C., cannabis remained illegal under federal law—classified as a Schedule I controlled substance alongside heroin, defined as having “no currently accepted medical use and a high potential for abuse.”
This fundamental contradiction forms the backbone of America’s cannabis conundrum. Despite federal prohibition, 39 states have established medical cannabis programs, and over 70% of Americans now live in a state where some form of cannabis is legal. Nebraska became the latest to join this group when voters approved medical cannabis ballot measures in November 2024, ending the state’s long-standing resistance to reform.
“What we’re witnessing is unprecedented in American legal history,” explains Jonathan H. Adler, law professor at Case Western Reserve University and author of ‘Marijuana Federalism: Uncle Sam and Mary Jane.’ “We have never had such a significant disconnect between federal law and the laws of so many states on an issue of this magnitude.”
The Federal Tipping Point
For decades, this tension between state and federal law has created legal and practical challenges for businesses, patients, researchers, and law enforcement. But 2024 may mark a turning point in this disjointed approach. In February, the Drug Enforcement Administration (DEA) initiated a review process that could potentially reclassify cannabis as a Schedule III substance—acknowledging its medical applications and reducing regulatory barriers.
The review follows a recommendation from the Department of Health and Human Services based on scientific evidence suggesting cannabis has legitimate medical uses and lower abuse potential than Schedule I or II drugs. If approved, it would represent the most significant shift in federal cannabis policy in over 50 years.
Rescheduling would not legalize cannabis at the federal level, but it would remove a huge tax burden from the struggling industry by eliminating IRS Code Section 280E, which prohibits cannabis businesses from taking normal business deductions.
This potential change arrives against a backdrop of international momentum. Germany, one of the world’s largest economies, legalized recreational cannabis in April 2024, joining countries like Canada, Uruguay, and Thailand. Luxembourg followed suit in July 2023, while Malta had already legalized recreational use in December 2021.
The Medical-Recreational Divide
The journey toward cannabis reform has consistently followed a pattern: medical acceptance first, recreational consideration later. This progression reflects both political pragmatism and societal attitudes.
The journey toward cannabis reform has consistently followed a pattern: medical acceptance first, recreational consideration later. This progression reflects both political pragmatism and societal attitudes.
Medical cannabis programs have opened the door because it’s much harder to argue against providing relief to patients with cancer, epilepsy, or PTSD. Once a state builds regulatory infrastructure for medical programs and citizens see that the sky doesn’t fall, the conversation about adult use often becomes more practical than philosophical.
This medical-to-recreational pathway has created research opportunities that were previously impossible. A groundbreaking study published in the Royal Society’s Biology Letters in March 2025 demonstrated how island size directly impacts genetic diversity in cannabis-producing populations, with implications for both conservation efforts and medicinal development.
Yet even as medical cannabis gains near-universal acceptance, recreational legalization faces steeper hurdles. Florida’s 2024 ballot initiative garnered 57.8% support—a clear majority, but short of the 60% supermajority required for constitutional amendments in the state.
Yet even as medical cannabis gains near-universal acceptance, recreational legalization faces steeper hurdles. Florida’s 2024 ballot initiative garnered 57.8% support—a clear majority, but short of the 60% supermajority required for constitutional amendments in the state.
The messaging against Florida’s initiative focused heavily on potency concerns. Opponents argued that today’s cannabis products bear little resemblance to what baby boomers remember from the 1970s, with THC concentrates now reaching 70-90% potency compared to the 3-5% common in earlier eras.
Economic Realities
The economic dimension of cannabis legalization has become impossible to ignore. Grand View Research projects the legal retail marijuana market to reach $102.2 billion by 2030. In mature cannabis markets like Colorado, annual tax revenue has exceeded $400 million, funding everything from education to infrastructure.
Ohio, which began sales in August 2024, reported nearly $2 million in sales on its first day alone. However, these economic benefits come with regulatory challenges. As House Speaker Matt Huffman of Ohio argued during legislative debates, “Those local governments, by and large, are going to use the revenue to deal with the problems that are caused by more marijuana being available in the community,” according to reporting by the Ohio Capital Journal.
Huffman’s claims that legalization leads to increased crime and addiction were directly contradicted by research. “When you look at crime statistics in jurisdictions that have taken this step, you don’t see dramatic effects on crime and certainly don’t see evidence of significant negative effects,” explains Adler, as reported by the Ohio Capital Journal. In fact, data suggests some types of crime may actually decline following legalization.
A Tale of Two Approaches: Commercial Sales vs. Home Cultivation
The model of legalization itself varies dramatically between jurisdictions, creating distinct regulatory environments. Some states, like Virginia and Washington D.C., have legalized possession and home cultivation but prohibited commercial sales, creating what policy experts call “grow and give” models.
Others, like New Jersey, have established commercial industries while prohibiting home cultivation entirely. Most states fall somewhere in between, permitting both commercial sales and limited home growing rights.
These differences reflect philosophical as well as practical considerations. There’s an ongoing tension between viewing cannabis as a personal freedom issue versus treating it as a commercial opportunity. States that emphasize personal freedom tend to have stronger home cultivation rights, while those focused on tax revenue and business development prioritize commercial frameworks.
The Testing Problem
Among the most vexing challenges for both regulators and law enforcement is the lack of reliable methods to test for cannabis impairment, particularly for drivers. Unlike alcohol, where breathalyzer tests provide immediate, reliable measurements of blood alcohol content that correlate closely with impairment, no such standard exists for THC.
“Can we detect THC accurately and reliably? The answer is yes. We can detect it in saliva. We can detect it in blood. We’re working on reliable ways to detect it in breath,” says Dr. Cinnamon Bidwell, associate professor at the University of Colorado Boulder, according to NPR. “But what does that mean? And is there a level that means somebody recently used or that somebody is actively impaired? The data aren’t there yet.”
This scientific uncertainty has created a patchwork of approaches to drugged driving enforcement. In Minnesota, state patrol officers recently concluded a pilot program testing devices resembling Keurig machines that analyze saliva for THC. Other states use blood tests, cognitive assessments, or a combination of methods.
Banking and Business Challenges
Perhaps no aspect of the federal-state divide creates more practical complications than banking. Because cannabis remains federally illegal, most banks and credit card companies refuse to serve cannabis businesses, creating cash-heavy operations with security risks and operational inefficiencies.
“If they’re really honest, they’ll tell you without the THC in the product, they can’t be profitable,” says Texas State Senator Charles Perry, who has opposed cannabis reform in his state, according to CBS Texas. Yet this very prohibition creates market distortions that disadvantage legal operators.
John Burk, owner of Shell Shock CBD in Richardson, Texas, counters: “How many people have died from THC? None. How many people have died from alcohol, tobacco, and firearms? But we don’t ban those!” as reported by CBS Texas.
The Social Equity Question
The newest frontier in cannabis policy centers on addressing the inequities created by decades of prohibition. States with more recent legalization frameworks, like New York, Connecticut, and Illinois, have incorporated robust social equity provisions designed to ensure that communities most harmed by cannabis criminalization benefit from its legalization.
These provisions include expungement of prior convictions, dedicated licenses for social equity applicants, and reinvestment of tax revenue into impacted communities. Yet implementation has proven challenging. In New York, Governor Kathy Hochul is currently attempting to recover $50 million from a planned $200 million social equity investment program that failed to meet its targets.
“We’ve learned that simply reserving licenses for social equity applicants isn’t enough,” explains Omar Pecantte, a cannabis dispensary owner who recently sued St. John the Baptist Parish in Louisiana over permit denials. “Without access to capital, real estate, and operational expertise, these programs can inadvertently set people up for failure.”
A Global Perspective
While America’s patchwork approach to cannabis regulation may seem uniquely complicated, the international landscape reveals even greater variation. Thailand, once known for some of the world’s harshest drug penalties, has embraced cannabis entrepreneurship with remarkable enthusiasm since legalizing recreational use in June 2022.
By contrast, Singapore maintains some of the world’s strictest cannabis laws, with trafficking of 500 grams or more potentially resulting in the death penalty. Between these extremes lie countless variations: Spain’s cannabis social club model, the Netherlands’ coffeeshop system, Portugal’s comprehensive drug decriminalization approach, and South Africa’s permission for private use without commercial sales.
Different cultural, historical, and political contexts produce different regulatory approaches. But the global trend clearly moves toward some form of legalization or decriminalization, even if the specific models vary widely.
The Future Landscape
As cannabis policy continues to evolve, several key trends are emerging that will likely shape the future landscape.
The first is consolidation within the industry. After initial “green rush” enthusiasm, many markets have experienced painful corrections. If valuations rise too high as excitement builds, the market may correct and prices could decline. This maturation process has accelerated partnerships between established consumer goods companies and cannabis operators.
Second is the growing focus on research. With restrictions easing, scientists are finally conducting rigorous studies on both the benefits and risks of cannabis use. A fascinating study published in February 2025 in Biology Letters demonstrated that wild fish can recognize and discriminate between individual human divers, but only when they’re wearing distinctive gear—research that would have been nearly impossible under more restrictive regimes.
Third is the emergence of cross-border cannabis commerce. As more countries legalize, international trade agreements specifically addressing cannabis are becoming necessary. Canada and Germany have already begun discussions on potential import/export frameworks, while Uruguay has positioned itself as a potential global supplier.
Finally, there’s growing recognition that the binary debate of “legal versus illegal” fails to capture the nuanced regulatory options available. From decriminalization to medical-only models to full commercial legalization, policymakers increasingly view cannabis regulation as a spectrum rather than a simple yes/no proposition.
America’s Continuing Experiment
As 2025 unfolds, America’s grand cannabis experiment continues to produce both successes and challenges. For patients like Deborah Wisdom of Latonia, Kentucky, medical cannabis has been transformative. Once bedridden with chronic pain from numerous injuries, she now works part-time at Kroger and enjoys time with her grandchildren.
“It totally changed my world,” Wisdom says, according to WCPO. “I’m a much better wife, much better mother, much better grandmother.”
Meanwhile, the industry continues to navigate uncertain regulatory waters. Innovative Industrial Properties, a cannabis-focused real estate investment trust, recently negotiated a favorable settlement with PharmaCann, a major tenant that had defaulted on rent payments for multiple properties. The agreement demonstrated both the sector’s continuing volatility and its increasing maturity in handling financial challenges.
What’s increasingly clear is that cannabis policy will remain in flux for years to come. The contradiction between federal prohibition and state-level legalization cannot persist indefinitely, but resolving this tension will require political courage and evidence-based policymaking.
For now, Americans continue to live in two parallel realities: one where cannabis is a legitimate medicine and regulated adult product, and another where it remains classified alongside the most dangerous drugs known to science. This dichotomy has created a natural experiment in federalism unlike any other in American history—one whose results will shape drug policy for generations to come.
As Ohio’s new cannabis customers made their first legal purchases in August, they weren’t just buying marijuana—they were participating in a profound restructuring of America’s relationship with a plant that has been simultaneously demonized and celebrated throughout the nation’s history. The only certainty is that this transformation is far from complete.
Disclaimer: This article represents reporting on cannabis policy and does not advocate for any particular approach to regulation. It is intended solely to inform readers about current developments in an evolving legal landscape.
