Senate Majority Leader Announces Federal Cannabis Bill Proposal

Just prior to a press conference on July 14, Senate Majority Leader Chuck Schumer, Senate Finance Committee Chairman Ron Wyden and Senator Cory Booker released the details of their long-awaited cannabis reform bill, entitled the “Cannabis Administration and Opportunity Act.”

The bill provides a widespread plan to regulate cannabis on multiple levels. If passed, the bill would deschedule cannabis, set up plans for widespread conviction expungement and allow states to continue to manage their respective cannabis program policies. It would implement a federal tax, the funds of which would go toward people who were most negatively affected by the War on Drugs, especially those who want to get into the industry in some way.

Another big change would be to take power away from the Drug Enforcement Administration, and instead give control to three different government organizations—mainly the Food and Drug Administration (FDA). The FDA would be “recognized as the primary federal regulatory authority with respect to the manufacture and marketing of cannabis products, including requirements related to minimum national good manufacturing practice, product standards, registration and listing, and labeling information related to ingredients and directions for use.” The Alcohol and Tobacco Tax and Trade Bureau and the Bureau of Alcohol, Tobacco, Firearms would also be given more control in regards to taxes and product tracking.

Social equity receives a lot of support in the senate bill, which seeks to expunge all cannabis-related arrests and convictions within one year if the bill is passed. “Communities that have been most harmed by cannabis prohibition are benefitting the least from the legal marijuana marketplace legacy of racial and ethnic injustices, compounded by the disproportionate collateral consequences of 80 years of cannabis prohibition enforcement, now limits participation in the industry,” the bill text reads.

Furthermore, the bill establishes three grants that would 1.) provide money to programs that assists with those who were negatively affected by the War on Drugs, 2.) help with small business loans for those “socially and economically disadvantaged individuals” and 3.) establish the “Equitable Licensing Grant Program” which would reduce certain requirements for those affected by the War on Drugs who want to get into the industry.

A large section of the bill is dedicated to tax rates, proposing a 10 percent tax during the first year if the bill becomes law. The tax would increase every year to 15 percent, then 20 percent, and finally 25 percent. Small cannabis businesses would be supported, and would received a rate reduction if they make less than $20 million in sales revenue in a single year. The bill also goes into detail about the approval process for cannabis businesses.

The Cannabis Administration and Opportunity Act also includes a variety of other details, from establishing which government organizations will manage which parts of the industry, the implementation of federal studies to determine if change is necessary, a countrywide age limit to consume cannabis and the redefinition of cannabis.

Senate Cannabis Bill Has Been in the Works for Months

This bill has been many months in the making. Following the senate’s original press statement announcing their plans to put forth a federal cannabis bill on February 1, Schumer, Wyden and Booker met virtually on February 5 with a individuals representing organizations such as NORML, Drug Policy Alliance and Students for Sensible Drug Policy, the National Cannabis Industry Association and Minority Cannabis Business Association.

For about an hour, the meeting members discussed a variety of topics, from social equity to tax proposals. The three politicians used this time to consider valuable information from cannabis leaders. “I had a great meeting yesterday with @SenBooker, @RonWyden, and leading marijuana justice groups from across the country to strategize about working together to end the federal prohibition on marijuana and repair the damage done to communities by the War on Drugs,” Senate Majority Leader Schumer Tweeted on February 6.

“Thank you to @NORML, @DrugPolicyOrg, @CivilRightsOrg, @ACLU, @MinCannBusAssoc, and so many more for your work to end the federal prohibition on marijuana, make criminal justice reforms, and ensure equity for communities—especially those of color—impacted by the War on Drugs!”

In March, Schumer, Wyden and Booker stated that they want to support small businesses in the cannabis industry with their bill, while denying power for larger alcohol and tobacco-based companies vying for a piece of the cannabis industry. “We don’t want the big tobacco companies and the big liquor companies to swoop in and take over,” Schumer said. “The legislation we have will make sure that smaller businesses, businesses in communities of color, get the advantage because communities of color have paid the price for decades. They should at least get something back.”

Throughout the year, Schumer has spoken out frequently about the need for cannabis reform, stating that he wants to proceed with federal legalization with or without President Joe Biden’s support. “We will move forward,” Schumer told Politico in an interview. “[President Biden] said he’s studying the issue, so [I] obviously want to give him a little time to study it. I want to make my arguments to him, as many other advocates will. But at some point we’re going to move forward, period.”

Schumer, Wyden and Booker are currently seeking comments about their bill, and welcome any feedback. If you feel you have a question or concern about the bill in its current form, you can send an email to Cannabis_Reform@finance.senate.gov by September 1.