UN Reclassifies Cannabis: Impacts US and Global Economy

by | Dec 15, 2020

Written by Deborah Agboola

Just recently, a United Nations Commission – the Commission for Narcotic Drugs (CND) – voted on and approved the bill for the reclassification of cannabis and CBD products for medicinal purposes. This feat follows the review of a series of World Health recommendations on marijuana and derivatives, leading eventually to the removal of cannabis from Schedule IV of the 1961 Single Convention on Narcotic Drugs, where it was listed alongside harmful and deadly drugs, like fentanyl, for about 60 years.

The historic vote, which read 27 in favor to 25 against, with one in abstention, opened the CND doors to recognizing the medicinal and therapeutic potentials of the commonly used but vastly acknowledged illegal recreational drug.

Even before this historic moment, several countries and states, especially within Europe, approved its regulation and distribution, passing bills to allow the free circulation and marketing within the legal order. Now, with a boost from the international level coupled with the passing and impending approval of the MORE Act, what reforms might be put in place for the United States for a start; its economic, agricultural sector, as well as intra-continental and global trade in general?

The Story So Far…

The inception of the year 2020 has been a very challenging one for many countries and the world. The United States especially had had to deal with the pandemic and its elections. However, market analyses showed that in spite of a rough year for the cannabis market, thanks to the election, there has been a considerable spike in cannabis stocks facilitated further by the forecasted positive shifts. 

The bipartisan agreement of the MORE Act, if implemented, is set to promote research into the plant, especially its therapeutic functionalities. It will also eliminate limits to the registration of entities allowed to cultivate the plant and authorize a 5% sales tax on marijuana products for investment in service provisions for individuals adversely affected by the War on Drugs. So what is the United States take on the cannabis movement internationally?

At the United Nations session, Ethan Glick, counselor for U.N. Affairs at the U.S. Mission to International Organizations in Vienna had said,” the legitimate medical use of a cannabis preparation has been established through scientific research, and cannabis no longer meets the criterion for placement in Schedule IV of the Single Convention.”

Though he had cited the several benefits of cannabidiol – a cannabis extract, Glick did not disregard the plant’s potential risks. In the meeting, he also tabled public health risks and concluded his statement by saying, “This action has the potential to stimulate global research into the therapeutic potential and public health effects of cannabis and to attract additional investigators to the field including those who may have been deterred by the Schedule IV status.”

Now What?

In a statement by the E.U. Monitoring Centre for Drugs and Drugs Addiction (EMCDDA), over the last 20 years, there has been an increase in the use of cannabinoids for medical therapy. In addition to this, the North American Cannabis Industry had proposed a surge in the multi-billion dollar industry to $130 billion by 2024, encouraging investors and American corporate industries to invest. Hence the above plus the current climate and recent rulings increase the chance of a rise in cannabis-dedicated stocks. A practical illustration is Cresco Pharma – one of the largest cannabis and hemp industries that recorded a growth in shares up to 3.9 cents following the reclassification. Aside from the aforementioned, there is also the plausibility of an increase in the global distribution network and footprints, boosting the number of opportunities for related industries and sectors.

Further strengthening the latter is the rule from the Court of Justice on 19 November 2020, which prohibits member states from disallowing the marketing of lawfully produced CBD; unless the risk of such trade is sufficiently established. It had reiterated that CBD is not considered a narcotic and should be sold freely within the European Union.  

The effect of this regulation will also extend to the cannabis farming industry, allowing and encouraging more entities to cultivate the plant legally, since by Economics: an increase in demand requires an increase in supply, which equates to an increase in production. There is a predicted subsequent diminishment of the cannabis black market trade, a consequential decrease in the circulation of non-compliant/counterfeit cannabis products, and eventual growth in the gross market income, both on the domestic and international level.

Regarding the building of relationships between countries, there is a possibility of an increase in international trade, fostering global peace to ensure the greater good; global economic rise.

What Next?

However, although this vote has been by the majority agreed upon, each member state retains sovereign power to regulate controlled substances within their country.  Nevertheless, as Phil Patterson of the Real Cannabis Club had said, regulators have been known to take promptings from one another when it comes to lawmaking, and what greater cue is there than the U.N. and E.U. on a case as such.