Federal Legalization – Straight from the Regulators’ Mouth

Foley Hoag LLP - Cannabis and the Law
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Foley Hoag LLP - Cannabis and the Law

As many are well-aware, the Cannabis Regulators Association (“CANNRA”) was formed at the end of 2020 with the goal of sharing institutional knowledge and regulatory best practices in order to assist federal, state and local jurisdictions that have approved or are considering approving the legalization of cannabis. The goals and collective wisdom of a body like CANNRA have only become all the more important with growing discussions as to whether and in what format cannabis should be legalized at the federal level. On February 18, 2021, CANNRA penned a letter to the collective leadership of the Senate and Congress to outline the issues that must be considered as the federal government debates increased federal involvement in the cannabis industry.

Broadly, CANNRA identified several areas for “additional consideration from federal officials,” including:

  • Protections for State Legalization Frameworks.
  • Access to Banking and Traditional Financial Services.
  • Research and Clinical Knowledge.
  • Social and Economic Equity.
  • Consumer and Product Safety Standards.
  • Laboratory Testing Standards.
  • Public Health Surveillance Data.
  • Federal Tax Structure.

Overall, CANNRA’s message focused on promoting uniformity, predictability, and transparency. For instance, as it relates to consumer and product safety standards, CANNRA emphasized that “[s]tates employ different standards and review processes for product packaging and labeling requirements; including what constitutes ‘child resistant’ packaging, what branding is deemed ‘attractive’ to children, what product warnings must be displayed, and identifying symbols that must be incorporated to alert consumers that products contain THC and can cause impairment.” As it relates to banking and financial services, CANNRA stressed that “[d]epository banking and electronic payment processing systems facilitate tax collection and create greater transparency and auditability, providing cannabis and financial regulators with more tools and data to determine compliance with state and federal requirements.”

CANNRA’s letter to leadership did not demand outcomes, but nevertheless noted issues that must be addressed in order to have uniform safety and transparency standards for the cannabis industry – one of the ultimate goals of any regulated marketplaces. The letter implicitly recognizes that legislators, as a whole, are necessarily limited by the spectrum of their collective experience – problematic given that Congress has been the body responsible for maintaining laws that prohibit the subject matter in question – something that CANNRA’s request for involvement will be sure to help remedy. While this letter is only the first step, it necessarily is an important step at ensuring that both the regulators, and the constituent licensees that they oversee, have their interests and concerns recognized as federal legislative proposals are considered.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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