It’s part of just about every cannabis conversation: “Hey, it looks like we’re close to seeing cannabis legalized. Is this the year?”
There are three promising cannabis bills in Congress – two that would legalize or at least decriminalize cannabis, and one to create SAFE Banking. All three have strong support, but could they take a backseat in an essentially deadlocked government on first-in-line issues like infrastructure and spending?
In our latest Insuring Cannabis podcast, we spoke with Paul Armentano, deputy director of NORML, and Morgan Fox with the National Cannabis Industry Association, to see where these bills stand.
Following are takeaways from that conversation.
Many Republicans embrace cannabis as a jobs-creating industry, and a large share of Democrats have been for pro legalization and decriminalization for years. So, what’s the hold up – beside the gridlock in Congress that is?
“Well, my business card doesn’t say professional prognosticator, but what I can do is give you the lay of the land and let you know what we do know,” Armentano said. “We know that nearly two thirds to almost 70% of Americans when asked, say that they believe that marijuana should be legal. That includes a majority of Democrats, a majority of independents, and a majority of Republicans. So we know among voters that marijuana legalization is a bipartisan issue.”
Despite the seeming agreement, cannabis legalization still remains largely a partisan issue, with most Democrats in support of marijuana law reforms, including the descheduling marijuana entirely, and with the overwhelming majority of Republicans advocating and voting against those reforms.
“I know there are some Republicans that give lip service to supporting marijuana policy changes, but if you look at their actions and if you look at their voting records, those speak a whole lot louder than their words,” Armentano said. “And right now, as a party, they are entrenched against virtually every type of marijuana policy reform legislation.”
Fox spoke about the Cannabis Administration and Opportunity Act.
“We got a glimpse of the draft language, I guess, in late July,” Fox said. “And the drafters, primarily Senate Majority Leader Schumer, and Senators Booker and Wyden, have been very engaged with stakeholders and were asking for comment from a wide variety of interested parties. And they got a significant amount of it because while there are a lot of good things in that draft language, there were a lot of things that weren’t necessarily thought through well enough.”
Among the things not to like about CAOA, as many people refer to it, which starts at 10% and then it moves up to 25%, n top of state and local taxes.
Fox believes this tax structure will not only be a hard pill to swallow for the industry, it will make it difficult for cannabis businesses to survive, so that’s a point he hopes the bill authors are willing to move on.
The Marijuana Opportunity Reinvestment and Expungement Act of 2021, or MORE Act, also removes marijuana from the list of scheduled substances under the Controlled Substances Act and it eliminates criminal penalties for an individual who manufactures, distributes, or possesses marijuana.
“Well, I think it’s very possible that the House will vote on and approve the MORE Act this year, but it doesn’t look like any sort of comprehensive de-scheduling and regulation bill is going to be able to get through the Senate this year, just because of the politics at play,” Fox said. “Democrats want something that’s very robust and contains a very strong social and restorative justice provisions. Republicans are not on board with that, even the ones that are pretty staunch supporters of ending federal prohibition.”
He believes watering down the bill would be required to get the 10 Republican votes to pass a filibuster in the Senate, likely stripping away some very necessary Democrat.
“So I think that at this point, we’re really just trying to feel out where lawmakers are and see where we can compromise in terms of bigger legislation,” he said.
Then there’s the SAFE Banking Act – which prohibits federal banking regulators from penalizing banks for providing banking services to a legitimate cannabis-related business.
While SAFE Banking is only an incremental step, it’s one that’s fully embraced by Armentano, who’s seen pretty much nothing but baby steps for cannabis over the years anyway.
“We also support SAFE Banking,” he said. “We believe that it is very likely that these changes at the federal level will occur incrementally. We know that there is greater bipartisan support in both chambers for SAFE Banking. The House of Representatives has passed that language on five separate occasions now. There are now nearly 40 Senate sponsors of the bill. So nearly one half of the upper chamber is on record as a co-sponsor of that language.”
He believes that it is ultimately in the best interest businesses and cannabis consumers to allow the industry to have access to banking and other financial services that are now prohibited by federal law.
Passage of SAFE Banking would also put Congress in an interesting spot in which Congress amends federal laws so that the cannabis industry has access to banking, but it maintains a federal policy to keep the substance illegal.
“Those two policies would be entirely inconsistent,” Armentano said. “So for both practical reasons and symbolic reasons, we think passage of SAFE Banking is important.”
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