Promising Federal Legislation Could Give Protection To Cannabis Businesses

Fox Rothschild LLP
Contact

Few things are as bi-partisan as constructing a snazzy acronym for federal legislation, and Senators Elizabeth Warren (D-MA) and Cory Garnder (R-CO) did not disappoint with the “Strengthening the Tenth Amendment Through Entrusting States Act”  (“STATES Act”). As its name suggest, the goal of the STATES Act is to protect regulated cannabis businesses and users in states where cannabis has been legalized by amending the Controlled Substances Act.

The Controlled Substances Act, 21 U.S.C. §§ 801, et seq. (“CSA”) is the federal law that makes the manufacture, distribution, and use of marijuana illegal, and is the main source for the dichotomy between state and federal law concerning cannabis. The proposed legislation seeks to amend the CSA by adding several sections which would essentially exempt state-sanctioned marijuana from the CSA. While the STATES Act would not legalize cannabis on a nationwide level, it would and give states the freedom to legalize cannabis or keep it illegal.

The STATES Act has received so much attention not only because of the sweeping changes it proposes, but also because it has received tacit approval from President Trump, who was previously seen as a roadblock to cannabis legislation. That is due in part to a deal struck between Senator Gardner and the President, which ended with the following pronouncement from Gardner: “President Trump has assured me that he will support a federalism-based legislative solution to fix this states’ rights issue once and for all.”

The folks at Leafly have a great breakdown and explanation of the STATES Act, including the following bullet points on what the legislation proposes:

  • The act amends the Controlled Substances Act (CSA) so that as long as states and tribes comply with a few basic protections, its provisions no longer apply to any person acting in compliance with state or tribal laws relating to marijuana activities.
  • The act states that compliant transactions are not trafficking and do not result in proceeds of an unlawful transaction. This would go a long way towards ending the difficulties cannabis companies have in obtaining banking services.
  • The measure removes industrial hemp from the list of controlled substances under the CSA.
  • The following federal criminal provisions under the CSA continue to apply:
    • Prohibits endangering human life while manufacturing marijuana
    • Prohibits employment of persons under age 18 in drug operations
  • The act prohibits the distribution of marijuana at transportation safety facilities such as rest areas and truck stops.
  • The measure prohibits the distribution or sale of marijuana to persons under the age of 21 other than for medical purposes.

We will continue to monitor and provide updates on this important legislation, which has great implications for cannabis businesses throughout the country.

[View source.]

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.

© Fox Rothschild LLP | Attorney Advertising

Written by:

Fox Rothschild LLP
Contact
more
less

Fox Rothschild LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide