Senators Finally Introduce Their Bill to Legalize Cannabis

Senate leaders, including Oregon’s own Sen Ron Wyden, introduced sweeping legislation Thursday, July 20, 2022, to end federal prohibition of cannabis.  More than a year after their draft concepts came out, the bill aims to legalize cannabis while addressing social equity issues and meet the not-unexpected law enforcement fears.

Chances of passage are slim to none, as the arcane rules of the Senate require 60 yes votes, and many Senators are afraid of cannabis.  Parts of the bill may be added to other legislation pending, such as the Safe Banking Act.

It will take some time to see who are the winners and losers in this legislation, consumers and small legacy businesses, or large multi-state/multi-national corporations. (It allows cannabis to be imported into the US as long as it meets federal standards, which haven’t been developed yet)

Here are the main topics of the bill:

-Require the attorney general to finalize a rule removing marijuana from the CSA within 180 days of enactment.

-Impose a 5 percent federal excise tax on small- to mid-sized cannabis producers, which would gradually increase to 12.5 percent after five years. For large businesses, the tax would start at 10 percent and increase to a maximum of 25 percent.

-Only those 21 and older would be allowed to purchase recreational marijuana products, as is already the policy in states that have legalized for adult use.

-Expunge the records of people with low-level, federal cannabis convictions within one year of enactment, while allowing those currently incarcerated over marijuana to petition the courts for relief.

-Create a federal regulatory framework for the marijuana industry, with 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) all playing key roles.

-Within FDA, there would be a Center for Cannabis Products responsible for regulating “the production, labeling, distribution, sales and other manufacturing and retail elements of the cannabis industry,” according to a summary.

-The Financial Crimes Enforcement Network (FinCEN) would need to update or issue new guidance clarifying to banks and credit unions that the policy change means that they can lawfully service legitimate cannabis businesses.

-States could choose to continue prohibiting marijuana production and sales, but they could not prevent transportation of cannabis products between legal states through their jurisdictions.

-Federal laws would still prohibit trafficking in states that ban marijuana and in legal states that impose laws for trafficking.

-Establish a grant program to fund non-profit organizations that provide job training, reentry services and legal aid. The program would be managed by a new Cannabis Justice Office under the Justice Department.

-DOJ grants would also go toward law enforcement hiring and community outreach to combat the illicit market.

-Separate Equitable Licensing Grant and Equitable Licensing Grant Programs would provide funding for states and localities to promote participation in the industry by minority and low-income people.

-Further, there would be a 10-year pilot program through the federal Small Business Administration “for intermediary lending” to provide “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.”

-People could not be denied federal benefits due to the use or possession of marijuana or for a conviction for a cannabis offense. That includes preventing the revocation of security clearances for federal employees.

-Federal employment drug testing for marijuana would also be prohibited, with certain exceptions for sensitive positions such as law enforcement and those involving national security.

-Physicians with the U.S. Department of Veterans Affairs (VA) would be authorized to issue recommendations for medical cannabis to veterans.

-There would be measures taken to prevent diversion, including the establishment of a track-and-trace regime. Further, retail cannabis sales would be limited to 10 ounces in a single retail transaction.

-Federal law would be amended to explicitly state that SBA programs and services available to marijuana businesses and companies that work with them.

-The Government Accountability Office (GAO) would be required to facilitate a number of studies into marijuana policy—for example evaluations of the societal impact of legalization in states with recreational marijuana laws on the books, including information on impaired driving, violent crime and more.

-The Bureau of Labor Statistics (BLS) would need to compile demographic data on business owners and employees in the cannabis industry.

-Employers with federal cannabis permits required under the legislation that violate certain federal labor laws could see their permits rescinded—a bold policy proposal that would make the marijuana industry uniquely labor friendly.

-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 research into cannabis impacts. There would be a specific requirement to study the diversity of marijuana products available for research purposes.

-The bill calls for an increase in the quantity of cannabis that’s available for study purposes.

-There would be targeted public education campaigns meant to deter youth consumption. States would also receive funding for initiatives to prevent youth use and impaired driving, which would include money for education and enforcement.

-The Department of Transportation would be responsible for developing a standard for THC-impaired driving within three years of the bill’s enactment that states would be required to adopt, unless the secretary finds the department is unable to set such a scientific standard.

-The National Highway Traffic Safety Administration (NHTSA) would be tasked with collecting data on impaired driving, producing educational materials on the issue for states to distribute and carry out education campaigns.

-Vaping delivery system products that contain added natural or artificial flavors would be banned under the proposal.

Here is the full Senate marijuana legalization bill