Finding common ground between Democrats and Republicans is likely the key to moving cannabis legislation across the finish line…
Finding common ground between Democrats and Republicans is likely the key to moving cannabis legislation across the finish line. In introducing the States Reform Act, Rep. Nancy Mace (R-SC) is seeking to bring more Republicans into the fold. Her proposed legislation would decriminalize cannabis at the federal level while allowing states to establish their own regulations.
How the States Reform Act Would Regulate Cannabis
Like other cannabis reform bills, the States Reform Act (SRA) would decriminalize cannabis and create a national regulatory framework for legal cannabis products. The SRA is unique in allowing states to keep their own regulatory schemes in place. “Today, only 3 states lack some form of legal cannabis. My home state of South Carolina permits CBD, Florida allows medical marijuana, California and others have full recreational use, for example. Every state is different. Cannabis reform at the federal level must take all of this into account. And it’s past time federal law codifies this reality,” Rep. Mace said in a press statement.
Below are several key aspects of the proposed cannabis reform legislation:
Decriminalization: The bill removes cannabis from Schedule I of the Controlled Substances Act (CSA).
State rights: The bill defers to states over prohibition or regulation. No state or local government would be forced to alter its current cannabis policies.
Regulatory framework: The bill regulates cannabis federally like alcohol. The U.S. Department of Agriculture would oversee growers, the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives would regulate cannabis products, and the U.S. Food and Drug Administration would supervise medical use.
Safe harbor: The bill creates a transitory safe harbor so that patients and businesses currently using and producing state-licensed products are not deemed in violation of this law until the agencies responsible for issuing federal regulations promulgate them within the specified time periods.
Taxation: The bill institutes a 3% federal excise tax on cannabis products, which would be used to fund law enforcement, small business, and veterans mental health initiatives. The tax would be levied at wholesale and based on the removal price of the cannabis.
Medical cannabis: The bill ensures the safe harbor of state medical cannabis programs and patient access while allowing for new medical research and products to be developed.
Expungement: The bill provides for federal release and expungement for those convicted of nonviolent, cannabis-only related offenses. This will not include cartel members, agents of cartel gangs or those convicted of driving under the influence (DUI). Approximately 2,600 releases will be expected at the federal level. State level releases and expungements will be left to each state to determine.
Military veterans: The bill protects military veterans by prohibiting discrimination in federal hiring for cannabis use or VA healthcare benefits.
SBA: The bill requires the Small Business Administration (SBA) to treat cannabis businesses like alcohol or similar businesses and no longer as illegal businesses. It specifies that in general and for disaster loan, microloan, small business investment company debenture, and state or local development loan programs, cannabis businesses are now eligible entities.
Child protections: The bill imposes a nationwide 21-year age limit for cannabis consumption (with an exception for medical use consistent with state programs and medical recommendations). Targeting cannabis product advertising at children would be prohibited by law, along with fraudulent advertising.
Status of Other Cannabis Reform Measures
As discussed in prior articles, Democrats have introduced their own comprehensive cannabis reform bills. This summer, Senate Majority Leader Chuck Schumer (D-NY) and Senators Cory Booker (D-NJ) and Ron Wyden (D-OR) released a discussion draft of the Cannabis Administration and Opportunity Act (CAOA). The Senators continue to solicit feedback from stakeholders and have yet to formally introduce the bill.
On September 30, 2021, the House Judiciary Committee advanced the Marijuana Opportunity Reinvestment and Expungement (MORE Act). The bill, which is sponsored by Rep. Jerrold Nadler (D-NY), passed in the full House in 2019 before failing to advance in the Senate, which was under Republican control at the time. The MORE Act will likely be on the House agenda sometime in 2022.
The full House also approved the Secure and Fair Enforcement (SAFE) Banking Act this fall as part of the National Defense Authorization Act (NDAA). As discussed in greater detail in prior articles, the SAFE Banking Act seeks to improve access to financial services for legal cannabis businesses. While the more incremental reform would seem more likely to pass the Senate, Sen. Cory Booker has said that providing businesses with easier access to financial services before federal criminal penalties are eliminated is a nonstarter.
Key Takeaway
With Democrats now in control of both chambers, as well as the White House, there is optimism that cannabis reform can become a reality. However, the margins for passage are narrow, requiring the support of all Democrats and/or at least some Republicans. Should Rep. Mace be able to rally Republican support around her bill, it increases the likelihood that the two parties can find common ground and advance a bi-partisan cannabis reform bill that both parties will support. We encourage members of the cannabis industry to closely monitor legal updates and contact the Scarinci Hollenbeck Cannabis Law Group with any questions about how your business may be impacted by ongoing state and federal legalization efforts.
If you have questions, please contact us
If you have any questions or if you would like to discuss the matter further, please contact Dan McKillop, Teddy Eynon, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.
This article is a part of a series pertaining to cannabis legalization in New Jersey and the United States at large. Prior articles in this series are below:
Disclaimer: Possession, use, distribution, and/or sale of cannabis is a Federal crime and is subject to related Federal policy. Legal advice provided by Scarinci Hollenbeck, LLC is designed to counsel clients regarding the validity, scope, meaning, and application of existing and/or proposed cannabis law. Scarinci Hollenbeck, LLC will not provide assistance in circumventing Federal or state cannabis law or policy, and advice provided by our office should not be construed as such.
Crypto Enforcement: A Former Prosecutor’s Warning to Criminals and the Public
Cryptocurrency intimidates most people. The reason is straightforward. People fear what they do not understand. When confusion sets in, the common reaction is either to ignore the subject entirely or to mistrust it. For years, that is exactly how most of the public and even many in law enforcement treated cryptocurrency. However, such apprehension changed […]
Understanding Chattel Paper: A Key Component in Secured Transactions
Using chattel paper to obtain a security interest in personal property is a powerful tool. It can ensure lenders have a legal claim on collateral ranging from inventory to intellectual property. To reduce risk and protect your legal rights, businesses and lenders should understand the legal framework. This framework governs the creation, sale, and enforcement […]
For years, digital assets operated in a legal gray area, a frontier where innovation outpaced the reach of regulators and law enforcement. In this early “Wild West” phase of finance, crypto startups thrived under minimal oversight. That era, however, is coming to an end. The importance of crypto compliance has become paramount as cryptocurrency has […]
Supreme Court and Title VII: Implications for Reverse Discrimination
Earlier this month, the U.S. Supreme Court issued a decision in Ames v. Ohio Department of Youth Services vitiating the so-called “background circumstances” test required by half of federal circuit courts.1 The background circumstances test required majority group plaintiffs pleading discrimination under Title VII of the Civil Rights Act to meet a heightened pleading standard […]
Special purpose acquisition companies (better known as SPACs) appear to be making a comeback. SPAC offerings for 2025 have already nearly surpassed last year’s totals, with additional transactions in the pipeline. SPACs last experienced a boom between 2020–2021, with approximately 600 U.S. companies raising a record $163 billion in 2021. Notable companies that went public […]
Short Form Merger: Streamlining the Process for Businesses
Merging two companies is a complex legal and business transaction. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process that involves important corporate governance considerations. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process. However, […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
