A Republican congressman has presented a revised version of a law to end federal prohibition on marijuana in states that have legalized the drug, legalize the interstate commerce of cannabis, normalize Internal Revenue Service policy for the sector, and consider a federal tax and regulate framework for the cannabis industry.
Rep. Dave Joyce, R-OH, reintroduced the Strengthening the Tenth Amendment through Entrusting States 2.0 Act (STATES 2.0) on Thursday. The co-sponsors are Reps. Lori Chavez DeRemer (R – OR), Brian Mast R – FL, Earl Blumenauer D – OR and Troy Carter D – LA.
The bill, which is similar to the version he introduced last session, would amend the Controlled Substances Act, removing federal criminalization for people who comply with state cannabis programs and those run by Indian tribes. STATES 2.0 goes further by allowing interstate marijuana trade and calling for a federal tax to fund regulation and enforcement.
In a recent press release, Joyce, the co-chairman of the Congressional Cannabis Caucus said that the current federal policy on cannabis is a violation of state rights to enact their own laws. It also stifles critical medical research and hurts legitimate businesses while diverting resources to law enforcement. The STATES Act is a federal bill that should help all 50 states succeed. This bill respects states that have legalized marijuana in some form, and allows them implement their own policies with no fear of federal repercussions.
The bill states that tribes and states should have the right to impose restrictions on time, place and manner that will help small and craft businesses. They can also impose health and safety regulations, keep cannabis businesses out of schools and fit in with the values and character of their community.
The legislation states that “While States are able to decide what happens in their borders, they can’t make laws that permit or restrict interstate commerce unilaterally.” In the absence of Federal action, the illicit interstate cannabis trade has continued despite significant state policy changes. The Federal Government is responsible for tracking and regulating this interstate cannabis trade in order to make sure that it doesn’t end up somewhere else.
To this end, the federal government should “require that a framework be established that supports critical elements such as proper administration and supervision, consumer safety protections and enforcement,” according to the bill. This framework should include a modest federal tax on cannabis, which is overseen by Alcohol and Tobacco Tax and Trade Bureau.
The bill does not mandate a federal tax on marijuana. However, its findings section states that the tax rate should be “low enough to avoid the pyramid effect, which would add Federal taxes over top of high state taxes, thus avoiding the addition of Federal taxes over top of the high state taxes.” It also says the tax should offset the costs associated with executing administrative functions for a Federal regulatory regime for marijuana. This includes requirements for testing and enforcement, youth prevention, as well as substance abuse prevention and educational programs.
The revised bill will prevent tribes and states from prohibiting the transport of cannabis across their borders, from one legal jurisdiction to another. The bill states that origin and destination jurisdictions can “impose reasonable restrictions” on marijuana within their borders.
The STATES Act also states that revenue from marijuana sales on regulated state markets will not be subjected to the section 280E of the IRS code. This prevents the cannabis industry from being able to claim federal tax deductions currently available to traditional markets.
This is a major issue for the banking industry. It has been pressing Congress for years for a bipartisan bill, called the Secure and Fair Enforcement Banking Act (SAFE), which Joyce is leading in this session.
The new STATES Act legislation specifies that, 180 days after enactment, the attorney general must finalize a regulation amending the CSA in order to exempt the states and tribes of federal prohibition on marijuana.
The FDA would continue to regulate cannabis that is marketed as a food item, cosmetic or dietary supplement. It would also prohibit the mixing of marijuana with other “adulterated products” such as alcohol and tobacco. Health and Human Services Secretary would have 180-days to publish a regulation on cannabis products, including the requirements for contaminant tests, manufacturing and marketing.
The bill specifies that anyone “knowingly or intentionally” who “manufactures, produces, possesses or distributes marijuana, dispenses or administers it, or delivers it in violation of State or Tribal laws in the place where such manufacture, production or possession, distribution, dispensing, administration or delivery takes place, as well as any person who hires a child to handle cannabis, would be prosecuted by the federal government.
Within one year after the law was passed, the Government Accountability Office would have to conduct a study on how legalizing cannabis affects traffic safety. It would then be required to submit its findings to Congress.
The findings section also expresses that Congress supports “tribal self determination and self government with respect to marijuana regulations.”
Blumenauer, co-founder of the Cannabis Caucus, who announced recently that he would not seek reelection in the next election, said: “I am very proud to have worked with my friend Dave Joyce on multiple iterations the STATES Act.” “Cannabis Reform benefits from this true bipartisan engagement.” I am looking forward to working with the federal government to become a better partner for states of all political stripes to lead the way forward.
Mast, a co-chair of the caucus, stated that the U.S. Constitution does not mention the word “cannabis,” but that it clearly states that all powers that aren’t explicitly granted to the federal government belong to the state.
He said that “Cannabis Policy should be Based on That: 50 States should be able set 50 different policies which will be best for their constituencies, and that is exactly what the STATES Act does.”
Chavez-DeRemer said that with an increasing number of states legalizing marijuana, “it’s more important than ever” to create a professional and safe environment for the industry.
It is unlikely that marijuana policy reform will be achieved in this Congress. Senate Banking Committee passed the marijuana banking bill back in September. However, it is still awaiting floor action and it’s unclear whether House GOP leadership will take it up.
Senate Majority leader Chuck Schumer (DNY) stated late last month that bringing the marijuana bank bill to the floor was a matter securing more GOP vote. He said this task is made even more difficult because some lawmakers fear that their constituents “particularly the older ones” don’t want to embrace reform, despite the overall majority of voters support.
A coalition of 20 Democratic congressional members is calling on Treasury Department officials to update federal guidelines to stop financial institutions from discriminating marijuana business owners based on prior cannabis-related activities that have since become legal in states.
Bill on cannabis:
Ohio Senate Approves a Bill to Allow Marijuana Sale From Dispensaries Immediately, Keep Home Grown And Expunge Records
The article Republican congressman files new bill to end marijuana prohibition in legal states, allow Interstate commerce and lift 280E tax blockade first appeared on Marijuana Moment.
