Federal Cannabis Legislation Roundup

With so many new proposals for reconceptualized federal cannabis legislation floating around Congress, this summary should help clarify the differences to distinguish each bill from the others. This post will cover the MORE Act, the PREPARE Act, the States Reform Act, and the Cannabis Administration and Opportunity Act. Part two in this series will cover the SAFE Banking Act, the Medical Marijuana Research Act, the Cannabidiol and Marihuana Research Expansion Act, and the Hemp Advancement Act.

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Marijuana Opportunity Reinvestment and Expungement Act

The Marijuana Opportunity Reinvestment and Expungement Act (MORE Act) would end federal prohibition of cannabis by removing it from the list of banned substances. The bill is sponsored by Representative Jerrold Nadler (D-NY), who, like others who have proposed federal cannabis legislation, cites the near-consensus opinion among Americans for legalization of marijuana, as well as greater racial and social equity, as his reasons for introducing the bill.

The MORE Act has an established history of support—more than any other federal cannabis legalization bill. The MORE Act initially passed through the House of Representatives in 2020 before losing support in the Senate, where a vote on the bill was never held. The bill passed through the House of Representatives again in March, and the slim Democrat majority in the Senate provides a more encouraging future for the bill than in 2020, when Republicans controlled the Senate.

Preparing Regulators Effectively for a Post-Prohibition Adult-Use Regulated Environment Act

The Preparing Regulators Effectively for a Post-Prohibition Adult-Use Regulated Environment Act (PREPARE Act) is a bill that would require the US Attorney General to lead a commission to oversee the process of making recommendations for a cannabis regulation system comparable to the current alcohol regulation system. The commission would oversee “study[ing] a prompt and plausible pathway to the Federal regulation of cannabis.”

The bill was introduced by Representative Dave Joyce (R-OH) and co-sponsors Representative Hakeem Jeffries (D-NY) and Representative Brian Mast (R-FL). The constitution of a specialized commission is what separates the PREPARE Act from the others. On the other hand, Joyce, like Nadler, stated that overwhelming support for cannabis legalization and social justice as the primary motives for his bill. The bill has not yet been voted on by the House of Representatives.

States Reform Act

The States Reform Act, introduced in November of 2021 by Representative Nancy Mace (R-SC), aims at removing cannabis as a Schedule I banned substance while respecting the rights of states to determine the level of cannabis reform and keeping Americans and their children safe. Like Nadler’s bill, the States Reform Act would decriminalize cannabis federally and defer cannabis regulation to the states, just like alcohol.

The State Reform Act also contains provisions regarding loans to cannabis-related small businesses, specifically stating that the Administrator of the Small Business Administration cannot discriminate against cannabis-related businesses by declining to provide loans to these businesses. The bill has not yet been voted on by the House of Representatives.

Cannabis Administration and Opportunity Act

The Cannabis Administration and Opportunity Act was introduced on July 14, 2021, by Senate Majority Leader Chuck Schumer (D-NY), and co-sponsors Senator Cory Booker (D-NY) and Senator Ron Wyden (D-OR). One of the reasons this bill is unique is because of who sponsors it—senators from the majority party, rather than representatives (like the other three bills discussed in this post).

The bill would remove marijuana and THC from the Controlled Substances Act, transfer regulatory jurisdiction of cannabis from the DEA to the FDA, and impose a federal excise tax on marijuana sales. The bill also calls for a study of the impacts of driving under the influence of marijuana, a study of the impacts of cannabis on the human brain, and funding for states for expungement proceedings for individuals convicted of marijuana-related crimes at the state level. The bill has not yet been voted on by the House of Representatives.

SAFE Banking Act

Representative Ed Perlmutter (D-CO) introduced the SAFE Banking Act in March 2021. The general purpose of the bill is to “prohibit a federal banking regulator from penalizing a depository institution from providing banking services to a legitimate cannabis-related business.” Those prohibited penalties would include prohibiting terminating or limiting deposit insurance or share insurance just because the institution provides financial services to a cannabis-related business, and prohibiting or discouraging a depository institution from providing financial services to a cannabis-related business. The bill would also establish that proceeds from transactions involving a cannabis-related business would not be considered proceeds from unlawful activity, which would be subject to anti-money laundering regulations. The SAFE Banking Act passed through the House of Representatives on April 19, 2021, and has been read by the Senate and referred to the Committee on Banking, Housing, and Urban Affairs in the Senate.

SAFE Banking Act Excluded from Manufacturing Legislation

A bicameral conference committee is negotiating a manufacturing bill that apparently will not include marijuana banking reform. A group that included Senate Majority Leader Chuck Schumer (D-NY), Minority Leader Mitch McConnell (R-KY), Speaker of the House Nancy Pelosi (D-NY), and Minority Leader Kevin McCarthy (R-CA) met to scale down the bill and expedite the passage of the legislation before the August recess. This included keeping the Safe and Fair Enforcement (SAFE) Banking Act out of the legislation, requested by Republicans. The exclusion of the SAFE Banking Act was met with criticism, particularly from Act sponsor Representative Ed Perlmutter (D-CO) and Representative Blumenauer. Failure to include the Act, according to Representative Perlmutter, means that cannabis companies will continue having to do business in all cash.

Medical Marijuana Research Act

Representative Earl Blumenauer (D-OR) introduced the Medical Marijuana Research Act in October 2021. The bill would establish a new, separate registration process that facilitates medical marijuana research. It would direct the Drug Enforcement Agency to register practitioners to conduct medical marijuana research, and manufacturers and distributors to supply marijuana for research. The Medical Marijuana Research Act passed the House of Representatives on April 4, 2022, and has been received in the Senate, but has not been assigned to a committee.

Cannabidiol and Marihuana Research Expansion Act

Senators Dianne Feinstein (D-CA), Chuck Grassley (R-IA), and Brian Schatz (D-HI) introduced the Cannabidiol and Marihuana Research Expansion Act in February 2021. The bill is co-sponsored by seven other senators. It is one of the few bipartisan efforts to pass a Senate-sponsored bill aimed at marijuana research. It “would streamline the research process to allow FDA-approved marijuana-derived medications to be used to treat serious medical conditions.” Federal laws inhibit much medical research. Changes to federal law could be a huge benefit. The bill unanimously passed the Senate on March 28, 2022, and has been received in the House of Representatives.

Hemp Advancement Act

Representative Chellie Pingree (D-ME) introduced the Hemp Advancement Act of 2022 in February 2022. True, this is not a marijuana bill, but it bears mentioning as well. The purpose of the bill is to remove red tape and regulatory uncertainty from the hemp production industry, which was federally legalized by the 2018 Farm Bill. The bill would eliminate difficult testing requirements, set reasonable thresholds for THC, and end the discriminatory practice of preventing people with drug convictions from legally cultivating hemp. The Hemp Advancement Act has been referred to the Subcommittee on Biotechnology, Horticulture, and Research, but a vote on the bill has not happened yet.

Pro-Reform Candidate Wins Republican Primary in South Carolina

Okay, this first one isn’t about federal cannabis bills. But it’s still important. Representative Nancy Mace (R-SC), sponsor of the States Reform Act (SRA) introduced in Congress last year, won the South Carolina First District primary race against Trump-endorsed Katie Arrington. On June 14, the Associated Press called the race for Mace with Mace getting 53 percent of the votes and Arrington getting 45%. Mace said that winning the primary despite being attacked for supporting cannabis legalization “shows that the only place that this is controversial is in Washington, D.C.” Mace also said that any candidate who attacks a competitor over their reform position will “lose big.” Mace’s primary win is good news for the SRA. While the bill faces an uncertain future due to the other various cannabis reform bills in Congress, Mace stated that she feels her bill is the only bill that could attract enough bipartisan support to be passed by both the House of Representatives and the Senate. Whether she wins reelection will be determined in November.

Representatives Introduce Bill Targeting Veterans

On June 23, Representatives Earl Blumenauer (D-OR) and Brian Mast (R-FL) reintroduced the Veterans Equal Access Act. Representatives Blumenauer and Mast are both co-chairs of the Congressional Cannabis Caucus. The Act has been introduced in Congress numerous times to bipartisan support, though the Act has not been enacted yet. The Act would permit doctors at the U.S. Department of Veterans Affairs (VA) to prescribe medical marijuana to patients, if medical marijuana is legal in the state. Blumenauer and Mast are optimistic about the bill’s future, simply because this incremental veteran reform effort can attract support from members of Congress who are not yet ready to support widespread cannabis legalization. In addition to the Act, Blumenauer and Mast also sponsor greater cannabis legalization legislation, as Blumenauer introduced the Medical Marijuana Research Act in October 2021 and Mast co-sponsors the PREPARE Act which was introduced this past April.

Representatives Introduce Bill Addressing Access to Financial Services

Also on June 23, Representatives Troy Carter (D-LA) and Guy Reschenthaler (R-PA) introduced the Capital Lending and Investment for Marijuana Businesses (CLIMB) Act. If passed, state-legal marijuana businesses would be eligible to be listed on national stock exchanges and have access to additional financial services. The aim of this bill is to protect private financial institutions, national securities exchanges, and market participants in listing or trading cannabis-related business securities. In this sense, federal agencies would be protected from penalties from other agencies, such as the Department of Justice. The bill would hopefully remedy the non-equitable access to financial services that has been hurting cannabis-related businesses for so long.

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If the prevalence of new federal cannabis legislation proves anything, it is that there is gaining momentum in Congress of a complete paradigm shift towards cannabis. The challenge will be to agree on a proposal. With potential changes in the composition of Congress on the horizon, we will see whether this momentum can be sustained long enough to result in new federal legislation.