Senate Democrats Unveil Sweeping Federal Marijuana Legalization Proposal

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On July 14, 2021, Senate Majority Leader Chuck Schumer (D-NY), Senate Finance Committee Chairman Ron Wyden (D-OR), and Sen. Cory Booker (D-NJ) unveiled a draft of the Cannabis Administration and Opportunity Act.

The proposal is ambitious and, if enacted, would dramatically reform both the marijuana industry and the way the government addresses issues of social justice and equity. The legislation would:

  • Remove marijuana from the Controlled Substances Act
  • Shift regulatory responsibility away from the DEA
  • Establish a Cannabis Products Regulatory Advisory Committee
  • Allow marijuana companies access to the United States banking system
  • Promote loans to small minority-owned cannabis businesses
  • Set up a system to tax marijuana in states that legalize it
  • Create an Opportunity Trust Fund funded by federal cannabis tax revenue to reinvest in communities impacted by marijuana criminalization
  • Immediately expunge nonviolent marijuana-related arrests and convictions from federal records
  • Allow individuals serving time in federal prison for nonviolent marijuana crimes to petition courts for resentencing
  • Establish a Cannabis Justice Office at the DOJ to help fund job training, legal aid, and re-entry initiatives
  • End discrimination in federal public benefits for medical marijuana patients and adult use consumers

The legislation faces a long road ahead, even among Senate Democrats. Several moderate Democrats are expected to oppose the criminal justice portion of the bill, including those six Democrats who voted against similar House-sponsored federal marijuana legislation at the end of last year. Almost all Republicans will certainly oppose the draft bill, especially the provisions involving expungement and resentencing. In addition, the draft bill is likely to receive pushback and criticism from those who wish to keep federal marijuana legalization a race-neutral issue, as the draft bill openly aims to “make recompense to communities of color and the poor for damage from years of restrictive federal drug policy.”

 The White House too continues to oppose broad federal marijuana legalization, with the White House press secretary stating just minutes after the bill’s unveiling that “nothing has changed” in regard to the president’s take on legalization.

Finally, there is a question of whether the legislation is an overreach. Many industry watchers believe that there is sufficient consensus to pass meaningful marijuana reform in Congress right now. For example, the SAFE Banking Act, which would open the federal banking system to the marijuana industry, likely could become law. Some are whispering that while the Cannabis Administration and Opportunity Act would be an ideal result for industry and social equity advocates, perhaps a more incremental approach (which would still hugely benefit the industry) would be a more practical approach. In this case, is the perfect the enemy of the good? It is a question advocates have been asking since the 2020 elections, and those questions are likely to continue as lawmakers consider the Cannabis Administration and Opportunity Act.

Even with a challenging road to passage, this proposed sweeping federal marijuana legislation is still significant to industry stakeholders. While feedback on the draft bill has been mixed (even from some marijuana industry groups), the bill has individuals on both sides of the aisle talking about federal legalization once again. While the draft bill will almost certainly need amendment to have a chance at becoming law, it appears that we are on the cusp of a much-needed national debate on the role of marijuana in American life.

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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