Tobacco & Cannabis Policy in 2021

Troutman Pepper

The Biden administration and Democratic majorities in both the Senate and House could implement significant changes to federal tobacco and cannabis policy over the next two years. For tobacco, the change in party control of the White House and Senate will likely revive the debate around electronic nicotine delivery systems (ENDS) products. For cannabis, the policy may shift toward outright reform (such as federal decriminalization or legalization), federal taxation, or the enactment of legislation beneficial to the cannabis industry.

 Tobacco

In the 116th Congress, legislation (H.R. 2339) passed the House of Representatives that would ban all flavored tobacco, with an emphasis on curbing use of e-cigarettes. House Energy and Commerce Committee Chairman Frank Pallone (D-NJ) will likely reintroduce this legislation in the 117th Congress. Although there is consensus around dealing with e-cigarettes, Pallone will have challenges with a slimmer majority on the committee and in Congress, and many Republican and Democratic members have concerns about banning flavors in specific tobacco product segments.

The omnibus spending and stimulus package signed in December included provisions aimed at preventing the online sales of electronic nicotine delivery systems (ENDS) products to underage individuals. Going forward, it will require retailers to verify the age of customers buying ENDS. The Biden administration is expected to strongly enforce federal oversight of how tobacco and e-cigarette manufacturers market and sell their products.

President Biden has yet to announce a new commissioner for the Food and Drug Administration, but any potential nominee is expected to support stronger and more targeted regulations on the tobacco industry. It is rumored that Biden is considering Janet Woodcock to head the FDA. Woodcock has worked at the FDA for over 30 years and is serving as the acting commissioner at the FDA. Woodcock was previously the director of the FDA’s Center for Drug Evaluation and Research but stepped aside from that role last year to help lead Operation Warp Speed. Additionally, Biden recently named the former FDA commissioner, David Kessler, as a top advisor on vaccine distribution. During his time at FDA, Kessler spearheaded aggressive regulations on tobacco and may continue to advise the Biden administration on such matters.

Cannabis

President Biden has publicly said that he supports the decriminalization of cannabis and removing it from the Schedule I list. Vice President Kamala Harris has gone further, stating that she supports full legalization. Congress has already passed several bills in the 116th Congress beneficial to the cannabis industry and will reintroduce those measures in the 117th Congress.

In December 2020, the House passed the MORE Act (H.R. 3884), which would legalize and remove marijuana from the federal drug schedule under the Controlled Substances Act. The bill also allows taxing marijuana at the federal level. The House passed an additional measure (H.R. 3797) that would ease marijuana research regulations for researchers and manufacturers. Additionally, in 2019, the House passed the SAFE Banking Act, which created protections for depository institutions providing financial services to cannabis-related businesses. The SAFE Banking Act had bipartisan support in the Senate, but the other bills had little hope for passage in the 116th Congress when the GOP controlled the Senate.

With Democrats now in control of the upper chamber, the bill’s sponsors and advocates will likely renew their efforts. Majority Leader Schumer also indicated that cannabis reform will be a priority, but it is unclear if there is enough Republican support to reach the 60-vote threshold to advance legislation in the Senate.

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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