Three democratic Senators released the first draft of their federal cannabis legalization bill on July 14 at a press conference. Senate Majority Leader Chuck Shumer, joined by Senate Finance Committee Chairman Ron Wyden and Senator Cory Booker, released the first draft of their new legalization bill. It’s called the Cannabis Administration and Opportunity Act (CAOA) and covers several key topics many states have made a priority when creating their own legalization bills, like social equity and taxes and fees.
CAOA
Under the new act, several changes will happen if the bill passes. First, the attorney general would need to remove “marihuana and tetrahydrocannabinols [THC]” from the Schedule I drug list within 180 days, or six months after the act takes place. Next, the federal cannabis sales tax produced or imported to the states would start at ten percent for the first two years after the act begins. The third year would increase to 15 percent, with the fourth year up to 20 percent and the fifth year at 25 percent, where it would stay.
The DEA would no longer have jurisdiction over cannabis and THC. It will transfer to various other administrations, including the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the Department of Health and Human Services (HHS) and the Treasury Department. Plus, cannabis can be transported between state lines no matter what, even if a state prohibits transportation. However, states could still prohibit the growth, manufacturing, distribution, sale, and consumption of cannabis if they choose to.
Social Equity
Social equity continues to be a hot topic in regards to cannabis legalization. And the Senators didn’t leave it out. Non-violent federal cannabis convictions not under a criminal sentencing would be eligible for record expungement. Additionally, individuals with prior convictions or juvenile charges could immediately file for a court expungement petition.
Other restorative justice and opportunity trust funds will be created for programs looking to reinvest in the community. A Cannabis Justice Office would form within the Office of Justice Programs. The Office will provide eligible organizations with funds to offer services like job training, reentry support, literacy programs, legal aid, youth recreation and mentoring programs, and health education. These programs will become eligible for anyone adversely affected by the war on drugs.
Cannabis Opportunity Programs would provide eligible states and local funds to make loans through the Small Business Act. This act assists small businesses created by socially and economically disadvantaged individuals wishing to work in the cannabis industry.
Finally, an Equitable Licensing Grant Program would provide funds to develop and create equitable cannabis licensing programs. These will minimize the barriers placed on licensing and employment for individuals adversely impacted by the war on drugs.
Response
Many organizations and advocates cheered the introduction of CAOA at such a crucial time to end the war on drugs. Wana Brands CEO Nancy Whiteman also made a public statement about the introduction of CAOA.
“We applaud the introduction of legislation that would federally decriminalize cannabis. The introduction of legislation that would federally decriminalize cannabis would have implications far beyond banking. For starters, it will expand opportunities for minority populations that have been disproportionately targeted during the war on drugs. 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 grow in appropriate outdoor climates and other materials become 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.”
Concerns
Following the press release from Senator Schumer, Cannabis Business Times had the chance to talk to Jonathan Havens. He’s the co-chair of the Cannabis Law Practice and the chair of the Food and Beverage at Saul Ewing Arnstein & Lehr.
“While the bill would direct the attorney general to remove cannabis from the Controlled Substances Act,” Havens said, “it wouldn’t legalize cannabis everywhere. Thus, it’s more appropriate to say that the bill would end the federal prohibition on cannabis, rather than legalize it. States would still be able to prohibit cannabis growing, manufacturing, distribution, sale and consumption within their borders. However, they wouldn’t be able to stop transportation of cannabis through their states (e.g., from one legal state to another legal state, via a state where it’s illegal).”
Mr. Havens brings up important points in his argument. While cannabis becomes removed from the prohibited substance list, it doesn’t necessarily legalize the plant in all states. It’s similar to the Farm Bill passed in 2018 that legalized hemp across the country. Hemp is generally accepted in most states. However, it took until this past year for the last state, Idaho, to legalize a limited form of hemp.
Future
CAOA is overdue and a welcome change in fighting the war on drugs. However, this isn’t the final version of the Act. Public input is encouraged until September 1 to help the Senators make CAOA the best it can be before being officially introduction into the Senate. And it has a long way to go after that.
The Act must first pass the Senate with a ⅔ majority. That means all 50 Democratic lawmakers and at least 10 Republican lawmakers would need to support CAOA. Then the act would move on to the House, where it would also need to pass with a ⅔ majority. Should it make it past the House, the Act would move to President Biden’s desk. He is the biggest opponent to the bill. He previously said he doesn’t support the legalization of cannabis and even made a statement minutes after CAOA’s introduction that he didn’t support the measure.
Regardless, the introduction of CAOA hopefully marks the upcoming reform changes towards cannabis. Mr. Havens sums up CAOA’s introduction perfectly:
“Schumer, Booker and Wyden know the bill is a longshot,” Mr. Havens said. “My view is that they are introducing it to let the caucus know where they stand, and more importantly, to start the conversation and hopefully pave the way for incremental reform. Given the current makeup of the Senate, incremental reform is much more likely than a sweeping proposal like this.”
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