Will The United States Ever Legalize Cannabis Federally?

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The negative impact of cannabis prohibition in the United States goes far beyond the country’s borders. Every country around the world enacts its own cannabis laws, however, prohibition in the U.S. largely drove prohibition abroad over the years.

Yet, whereas much of the world followed the United States’ lead when it came to enacting prohibition policies, countries such as Uruguay, Canada, and Malta didn’t wait around and have zoomed past the U.S. when it comes to ending cannabis prohibition for adult use.

For that matter, many states within the U.S. have already taken matters into their own hands and passed legalization measures at the state level. Every passing year seems to result in more states passing legalization either via legislative action or through the ballot box.

Lawmakers at the federal level have tried for some time, to varying degrees, to pass an adult-use legalization measure. Unfortunately, it has failed to happen, with bill after bill dying a slow death in Congress.

There is optimism that something could happen this session in Congress, with the Cannabis Administration and Opportunity Act finally being introduced in the Senate. The measure was teased for quite some time prior to being introduced and was essentially hyped as a measure that the Senate could finally support after the Senate has failed repeatedly to pass measures previously passed by the House.

I don’t personally have a lot of hope for this specific measure passing, partially because some advocates do not think that it goes far enough, and mostly because Congress is dysfunctional, and getting anything reasonable passed these days seems to be extremely difficult.
Only time will tell. No one knows for sure when cannabis will be legalized federally in the U.S., and anyone that says otherwise is likely trying to sell you something.

Below is more information about the newly introduced Senate measure via a news release from our friends at the National Cannabis Industry Association (sent to us via email on June 21st):

WASHINGTON, D.C. – Today, Senate Majority Leader Chuck Shumer (D-NY) along with Finance Committee Chair Ron Wyden (D-OR), and Sen. Cory Booker (D-NJ) introduced the Cannabis Administration and Opportunity Act (CAOA) which is now the Senate’s only pending legislation that would provide comprehensive cannabis policy reforms across the nation.

The landmark bill would remove cannabis from the federal Controlled Substances Act and move regulatory responsibility from the Drug Enforcement Administration (DEA) to the Alcohol and Tobacco Tax and Trade Bureau (TTB), the Food and Drug Administration (FDA) and other agencies to protect public health and safety. The legislation would also allow the state-regulated medical and adult-use cannabis industries already in place in 37 states to operate without federal interference.

The Senate Democrats’ CAOA would also institute a federal excise tax of 5-25% on cannabis on top of the already-hefty state taxes imposed on the industry, concerning advocates for small cannabis businesses and equity operators.

“We applaud the authors of this legislation for working to bring federal law into harmony with the states and the vast majority of voters who have called for an end to prohibition,” said Aaron Smith, co-founder and chief executive officer of the National Cannabis Industry Association. “We look forward to working with Senators on both sides of the aisle to improve the tax provisions in this bill on behalf of small cannabis businesses and eventually pass it into law.”

The long-awaited CAOA Act was introduced after a bill sponsors circulated a discussion draft last year. NCIA and other advocacy organizations provided comprehensive feedback to the bill’s authors last year. Notable changes to the legislation include:

  • Increases the permissible THC by dry weight from the current 0.3 percent to 0.7 percent and refines the definition of “hemp,” and consequently “cannabis” by taking into account the total THC in a cannabis product, rather than just delta-9 THC.

  • Changes to the weight quantity to qualify a person for felony cannabis distribution or possession charge under the section from 10 pounds to 20 pounds.

  • Provides that a court shall automatically, after a sentencing review, expunge each federal cannabis conviction, vacate any remaining sentence, and resentence the defendant as if this law had been in place prior to the original sentencing.

  • Enables a noncitizen who has received a deportation order based on a cannabis-related offense to file a motion to reconsider that decision. If the motion to reconsider is filed within 30 days of the removal order, the motion may allow for the cancellation of the deportation order.

  • Establishes a new 10-year intermediary lending pilot program in which SBA would make direct loans to eligible intermediaries that in turn make small business loans to startups, businesses owned by individuals adversely impacted by the War on Drugs, and socially and economically disadvantaged small businesses.

  • Removes the requirement to maintain a bond for any cannabis business that had less than $100,000 in excise tax liability in the prior year and reasonably expects excise tax liability in the current year to be below such amount.

  • Incorporates rules similar to rules currently applicable to permitted malt beverage producers and wholesalers.

Whitney Economics submitted a report outlining concerns with the tax plan, finding that the CAOA would impose an additional $1.1 billion in taxes on the already-struggling and cannabis industry.

“Introducing this far-reaching bill is a historic and important effort but we hope that the Senate moves quickly to pass the bi-partisan SAFE Banking Act which would provide tangible and immediate relief to small businesses and improve public safety by opening access to banking and financial services in our industry,” added Smith.

The SAFE Banking Act has been approved by the House of Representatives seven times and the Senate version of the bill (S. 910) enjoys the support of a bipartisan group of 43 co-sponsors but has yet to be brought to a vote in that chamber.

Laws to make cannabis legal for adults have passed in 19 states as well as the District of Columbia and the territories of CNMI and Guam, and 37 states as well as several territories have comprehensive medical cannabis laws. The substance is legal in some form in 47 states.

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The National Cannabis Industry Association (NCIA) is the largest cannabis trade association in the U.S. and the only organization broadly representing cannabis-related businesses at the national level. NCIA promotes the growth of a responsible and legitimate cannabis industry and works toward a favorable social, economic, and legal environment for that industry in the United States.

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