Federal Cannabis Legalization Bill Is Proposed

Senate Majority Leader Chuck Schumer (D-NY), Senate Finance Committee Chairman Ron Wyden (D-OR), and Sen. Cory Booker (D-NJ) released the full text of their federal draft marijuana legalization bill called the Cannabis Administration and Opportunity Act. This massive piece of legislation is clocking in at a hefty 163 pages and a public comment period is open until September 1.

In general, the legislation aims to deschedule cannabis, expunge prior records, fund equity programs, remove collateral consequences, and transfer regulatory authority for marijuana to the Food and Drug Administration and other federal agencies. Only consumers over the age of 21 would be allowed to buy legal cannabis and adults would be limited to purchases of up to 10 ounces. The bill would also impose a federal tax on marijuana products and put some of that revenue toward grant programs meant to support people from communities most impacted by prohibition who want to participate in the industry.

“Cannabis prohibition, a key pillar of the failed war on drugs, has caused substantial harm to our communities and small businesses, and especially for communities of color,” Wyden said. “It’s as simple as this: Senators Booker, Schumer, and I want to bring common sense to the federal government, end prohibition and restore the lives of those hurt most and set them up for opportunity.”

The legislation proposes to federally deschedule cannabis, expunge prior convictions, allow people to petition for resentencing, maintain the authority of states to set their own marijuana policies, and remove collateral consequences like immigration-related penalties for people who’ve been criminalized over the plant.

The Coalition for Cannabis Policy, Education, and Regulation (CPEAR) said in a statement, “The draft demonstrates a commitment to ensure a national legal cannabis market that is equitable, with protections for the small and minority-owned businesses that have been crucial for establishing legal markets in states across the country.

In addition to those items, the CAOA would transfer regulatory authority over cannabis to the Food and Drug Administration (FDA), the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), and the Alcohol and Tobacco Tax and Trade Bureau (TTB) from the Drug Enforcement Administration (DEA).

“The days of federal prohibition are numbered,” said NORML Executive Director Erik Altieri. “These actions by Senate Majority Leader Schumer and Senators Booker and Wyden reflect the fact that the supermajority of Americans are demanding that Congress take action to end the cruel and senseless policy of federal prohibition. It is time for legislators to comport federal law with the laws of the growing number of states that have legalized the plant, and it is time for lawmakers to facilitate a federal structure that allows for cannabis commerce so that responsible consumers can obtain high-quality, low-cost cannabis grown right here in America without fear of arrest and incarceration.”

Dasheeda Dawson, Chair of Cannabis Regulators of Color Coalition (CRCC) and Cannabis Program Supervisor at City of Portland OR said, “The introduction of the Schumer, Wyden and Booker draft legislation is the first serious look at cannabis legalization for the Senate and I am hopeful that the equity-centered policy reform and regulation led by our members at the state and local levels will continue to shape this historic bill. Across the country, we have seen the positive impact of sharing our informed insights, testimony and proposed amendments aligned with our organization’s founding principles. As active stakeholders overseeing policy and implementation in the existing cannabis industry, CRCC will continue to actively engage with the Senators’ teams, providing industry best practices and cannabis competency gained from our collective and diverse experiences.”

Controlled Substance

One provision within the legislation is a requirement that the attorney general removes cannabis from the Controlled Substances Act within 60 days of the bill’s enactment. However, it continues to allow states to choose prohibition if they like. This would mean that it would still be federally illegal for a company to send cannabis to a state that has chosen prohibition. However, the states apparently wouldn’t be able to stop businesses from shipping cannabis products across state lines to other states where cannabis is legal.

Nancy Whiteman, CEO, Wana Brands said, “Federal decriminalization would also enable manufacturing and then shipping across state lines which would greatly benefit brands like Wana. Supply chains will become more efficient and cost-effective as plants would be grown in appropriate outdoor climates and other materials could be sourced across markets. For a company like Wana, it means that we would be able to manufacture and ship out of regional or national facilities instead of recreating the wheel in every market.”

Government agencies would all get in on the act. The Bureau of Labor Statistics would begin compiling data on jobs and employers. The U.S. Department of Health and Human Services (HHS) would be required to work with the National Institutes of Health (NIH) on ways to promote cannabis research. The  HHS would also work with the U.S. Department of Transportation (DOT) on data collection for marijuana-impaired driving while also supporting research into “an impairment standard for driving under the influence of cannabis.”

Feedback

The public will have until September 1 to comment on the language of the bill. Marijuana Moment drilled down to summarize the main points for feedback:

-Measuring the potency of cannabis products, the overlap of definitions for hemp and marijuana, regulations for synthetic THC, regulatory responsibilities for various federal agencies and FDA funding.

-Coordinating federal and state law enforcement responsibilities for cannabis, state “primacy regarding cannabis regulation” and interstate commerce.

-Balancing efforts to reduce barriers to entry to the marijuana industry while mitigating the influence of illicit cannabis operators.

-Determining whether cannabis products should go through a premarket review before being marketed.

-How to deal with international treaty obligations with respect to marijuana.

Interested parties are encouraged to submit comments on these and other issues to Cannabis_Reform@finance.senate.gov by September 1.

Next Steps

The legislative draft that the Senators came up with was based partially on a bill that the House passed in December.  It included similar language that would remove some federal penalties, feature a form of expungement and address social equity issues. The House vote at the time was split mostly down party lines and very few Republicans voted for the bill. It seems expungement is a sticking point for many Republicans. The likelihood of this legislation getting the votes in the Senate is low. Even Schumer suggested it was merely a jumping-off point to start the conversation.

“We’d certainly listen to some suggestions if that’ll bring more people on board,” Schumer said. “That is not to say we’re going to throw overboard things like expungement of records — very important to us — and other things like that, just ’cause some people don’t like it.”

Debra Borchardt

Debra Borchardt is the CEO, Co-Founder, and Editor-In-Chief of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Masters degree in Business Journalism from New York University.


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