GOP Cannabis Legalization Bill Could Finally Surmount Partisan Divide

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Even with the majority of Americans having supported cannabis legalization for nearly a decade, proposals to decriminalize the substance at the federal level have been hobbled by partisan politics. However, last week, Rep. Nancy Mace (R-SC) introduced the States Reform Act (SRA), a “compromise bill” she hopes can bridge this partisan divide. Though some of her Republican colleagues may be reticent to endorse a bill that fully decriminalizes cannabis at the federal level, its biggest hurdle will be in gaining enough support from Democrats who view it as not going far enough. But Democrats shouldn’t be too quick to dismiss Rep. Mace’s proposal. While it certainly has room for improvement, it is a very good starting point for truly bipartisan legislation that could finally end America’s disastrous prohibition, once and for all, while also making significant strides toward rectifying the harms caused to disadvantaged groups by the War on Drugs.

For several years cannabis efforts in Congress have centered on two competing approaches.

On one side are GOP-backed bills, like the STATES Act, which would exempt state-authorized commercial cannabis activities from federal interference without taking further steps to address the disparities created by the War on Drugs.

On the other side are bills favored by Democrats, like the still-pending MORE Act, which would remove cannabis from the list of federally controlled substances (fully decriminalizing it at the federal level), expunge non-violent cannabis offenses, create a system of federal regulation, institute a federal excise tax, and earmark tax revenue for programs aimed at supporting disadvantaged individuals, businesses, and communities. Though there seems to be broad support for the social equity provisions of the MORE Act, the regulatory burden and high taxes it would impose have led even some staunch supporters of legalization to withhold support for the bill, leaving it stuck in a sort of limbo since being approved by the House.

Rep. Mace’s bill attempts to split the difference between the two approaches. At just over 130 pages, the States Reform Act is the most comprehensive cannabis legislation ever introduced in Congress. Its length is due in part to the fact that, in addition to its own unique features, it also contains many of the equity provisions included in the MORE Act, sometimes verbatim. But it has key differences. Like the MORE Act, the SRA removes cannabis from the Controlled Substances Act’s list of scheduled drugs, expunges non-violent offenses related to cannabis, and creates programs aimed at supporting small and disadvantaged cannabis businesses. It would also impose a federal tax, create systems of regulatory authority, and institute protections against discrimination for certain cannabis users and businesses.

Yet, Mace’s bill diverges from the Democratic proposal in which agencies would have regulatory authority, the level of taxation, how tax revenue would be spent, and which individuals and businesses would be offered explicit protections. Those details which may prove the biggest challenge in gaining Democratic support for her bill.

Expungement. Both the MORE Act and the SRA expunge nonviolent cannabis-related offenses, but, unlike the MORE Act, Rep. Mace’s bill does not limit offenses to those committed after 1971. It also includes an explicit directive for all federal authorities to cease enforcement actions against non-violent cannabis offenders and return property seized through civil asset forfeiture. However, it excludes “foreign cartel members” and offenses related to driving under the influence from expungement eligibility. 

Protections. The MORE Act provides broad protections for cannabis users, including barring federal agencies from denying public benefits, employment, loans, or immigration services on the basis of cannabis use or non-violent cannabis offenses. The explicit protections listed in Rep. Mace’s bill focus mainly on veterans who, for instance, had less-than-honorable discharges due to cannabis use upgraded to a “general” discharge, which would entitle them to certain benefits. But, while the SRA doesn’t explicitly protect other groups and the MORE Act doesn’t protect veterans, it is likely that both bills assume these protections are included in the more general provisions aimed at records expungement and non-discrimination. For example, Mace’s bill does not—as the MORE Act does—prevent immigrants from being denied entry or services due to past use or non-violent convictions related to cannabis. However, because it applies its decriminalization of cannabis and records expungement to “every organ of the federal government,” it is possible the bill implies these protections for migrants.

Regulatory Authority.  Both the MORE Act and the SRA would set up systems for awarding permits to producers or importers of cannabis and for regulating labeling and marketing of cannabis products. The previous version of the MORE Act gave this responsibility to the Secretary of Health and Human Services. Although this isn’t explicit in the current draft of the bill (an apparent textual error that only refers to “The Secretary” without clarifying which one), it seems the intent is the same—to give regulatory authority to Department of Health and Human Services (HHS) and to the already overextended Food and Drug Administration (FDA.) Mace’s bill, on the other hand, takes a different and likely wiser approach to the federal role in regulating cannabis products.

The SRA seeks to treat cannabis like alcohol. To do this, it would deem cannabis as a “generally recognized as safe” additive, which would allow producers to use cannabis-derived ingredients in foods and beverages (an important change for edibles, hemp, and CBD products) without prior approval from the FDA. Furthermore, the proposal hands licensing and regulatory authority primarily to the Tax and Trade Bureau (TTB), the agency already in charge of administering federal laws and standards regarding the sale and marketing of alcoholic beverages. On this point, Mace’s bill is the wiser approach.

Though not perfect, the Tax and Trade Bureau has proved capable of efficiently regulating the booze market, working with thousands of independent producers and regulating millions of individual products. For example, it typically takes the agency less than a month to approve new labels for alcoholic beverages. In other words, TTB has an established track record of working with large and diverse markets, which puts it in a good position to hit the ground running in overseeing what would be a multi-billion-dollar cannabis industry from day one. Such efficiency is highly unlikely at the FDA, which recently demonstrated its limited regulatory capacity by thoroughly bungling the e-cigarette approval process—which has taken two years and counting—and which now has the agency tangled in lawsuits.

Taxes/Fees. Perhaps the biggest sticking point with the MORE Act, especially for members of the industry, is its establishment of a large federal excise tax on cannabis products: 5 percent for the first three years and 8 percent thereafter. Piled on top of often sky-high state taxes, this steep federal levy would hamper the legal cannabis industry and continue to drive consumers to illicit sources, industry insiders claim. Mace’s proposal would also tax cannabis at the federal level, but at a lower 3 percent, and keep that rate for at least 10 years to allow the legal industry to become established.

Spending.The other big point of contention will likely be how the revenue generated by the federal tax will be spent. The MORE Act earmarks 60 percent of the revenue for the Department of Justice (DOJ), with the rest going to the Small Business Administration (SBA) to carry out the bill’s newly created Cannabis Restorative Opportunity Program and Equitable Licensing Grant Program. Mace’s bill also diverts 40 percent of the revenue to DOJ, 30 percent to SBA for its Successful Second Chances” program to help disadvantaged and small cannabis businesses, 10 percent to the Department of Veterans Affairs for mental health services, and 10 percent to HHS for youth cannabis use prevention and state opioid-prevention grants.

Other differences.Mace’s bill, unlike the MORE Act, would set a national minimum age for cannabis purchasing at 21. This would be enforced in the same way as the national minimum age for buying alcohol: by withholding federal transportation funds to states with a lower minimum age than the federal standard. However, Mace’s proposal includes an exemption for states that allow minors to access medicinal cannabis for therapeutic purposes. The SRA bill would also grandfather in state medical cannabis products, allowing them to be sold in interstate commerce without prior federal approval. Mace’s bill also provides a waiver of licensing fees for applicants who represent “a small business or a socially and economically disadvantaged business.” The MORE Act has a similar provision, but it only applies to first-time applicants reporting an income of 250 percent below the poverty line for at least five of the last 10 years.

All told, there is a lot for MORE Act supporters to like about Mace’s proposal, which, even if enacted in its current form, would set up the nascent cannabis industry for a good start and take significant steps toward Democrats’ social justice and equity goals. But there is nothing preventing Democrats from attempting to make the SRA better (such as, by example, protecting more groups from discrimination and denial of federal benefits on the basis of cannabis use or offenses) by working with Mace’s office or offering amendments. Such a bipartisan effort could result in a final bill that is more protective, corrective, and inclusive than either the MORE Act or the current version of the SRA—something that ought to appeal to members of Congress regardless of political affiliation.