Senators Introduce New 2021 Marijuana Legalization Bill
- U.S. Senate Majority Leader Chuck Schumer has revealed a new marijuana legalization bill to be considered in September.
- The measure closely resembles the MORE Act, which passed the House last year.
- The Cannabis Administration and Opportunity Act, would remove cannabis from the federal list of controlled substances.
- The bill also includes social justice reforms paid for by a 25% nationwide tax.
- Critics say the bill is too far-reaching and is unlikely to pass both houses of congress.
U.S. Senate Majority Leader Chuck Schumer has revealed details of a new marijuana legalization bill to be considered by the Senate in September. The Cannabis Administration and Opportunity Act is similar to the MORE Act, which passed the House last year, but was snubbed by then-Senate Majority Leader, Mitch McConnel.
If the bill were to pass the Senate, make it through the house, and be signed by President Biden, marijuana would be removed from the federal list of controlled substances, a 25% national sales tax would be tacked on to all marijuana sales. The tax revenue would be earmarked for social justice reforms to benefit those hit hardest by the War On Drugs.
But don’t give up your seats just yet, marijuana advocates. The ride ain’t over ‘til it’s over. Many critics are saying the bill is too far-reaching and is unlikely to pass both houses of congress.
280e is sapping the cannabiz of $2 billion annually
If the Senate were to pass the SAFE Banking Act (which passed the House three times after being debated for almost 6 years), it would end the onerous tax treatment.
According to Beau Whitney of Whitney Economics, when compared with other retail sectors, IRS 280e language — which prevents marijuana operations from writing off the usual business expenses — is removing over $2 Billion each year in excess taxation from the cannabis industry.
Rather than fighting for the SAFE bill, the U.S. Cannabis Council — with a millions-plus in DC lobbying and staff (from MPP) — decided to work instead on a “comprehensive” bill as the “one shot we have before 2022,” (when the House goes Red again).
USCC’s number one donor, powerful U.S. multi-state operator, Curaleaf [CRLF], along with Scotts/Hawthorne, other big MSOs, and large cannabis brands all said they could move the 12-plus Republican senators they would need to pass Schumer’s long laundry-list of cannabis needs.
Apparently, however, USCC has now admitted that it has given up on getting a comprehensive bill out of the Senate.
Moreover, in a July 14 speech, Sen. Booker dashed any hope of taking up SAFE banking saying:
“I don’t know about other members of the Senate, but I will lay myself down to do everything I can to stop an easy banking bill that’s going to allow all these corporations to make a lot more money off of this, as opposed to focusing on the restorative justice aspect.”
Introducing a comprehensive bill that doesn’t have the support it needs is a sure way to kill all incremental progress.
It looks like the can of cannabis legalization is likely to get kicked down the road once again.
Social justice and medical marijuana lose again
This is classic, out-on-a-limb governance. Sawing off the SAFE Act cuts off substantive seed money that could be going to social equity programs and leaves hundreds of would-be minority marijuana licensees to just hang on.
The best way to keep one bill from passing is to fasten a million “bells and whistles” onto it giving opponents an opportunity to keep the support below 50 percent.
Unfortunately, the entire area of social justice is a complex and politically charged problem. As a result, social equity programs have faltered in California, Massachusetts, Illinois, and now Colorado. And they are likely to falter in the Senate.
Another thing to consider is that removing marijuana from the DEA’s list of controlled substances would save the federal government billions in law enforcement costs. If the bill fails, the federal government continues to spend billions of dollars on upholding prohibition.
Just three Democrat holdouts (give or take)
For the cannabis industry, the bill really just adds insult to injury. Ironically, if the bill passes, and the 25 percent tax is tacked on top of state taxes, black market marijuana will be cheaper in most areas than legal marijuana.
A $400 ounce of marijuana would cost $500 — plus up to 47% state tax. As a result, the industry will not only be bleeding capital due to 280e, it will also see a drastic drop in sales leading to a drastic drop in the federal taxes collected. Everyone loses.
Rather than working to win small victories — such as developing a nationwide medical marijuana research program that could benefit millions, or giving U.S. veterans legal access to medical marijuana, or axing 280e — we may get nothing now for another few years.
Sadly, before all this nonsense, it was looking as if the SAFE Act had 60-plus votes 😛