Senate Proposal to Deschedule and Tax Marijuana

Finally, the day we’ve been waiting for all year has come! On Wednesday, July 14th., Senate Majority Leader Chuck Schumer (D-NY) and Sens. Cory Booker (D-NJ) and Ron Wyden (D-OR) released the draft version for a comprehensive bill that would deschedule and effectively make cannabis legal at the federal level while allowing states to continue to determine their own cannabis policies and work to repair the harms caused by prohibition.

An excerpt from the summary of the draft legislation:

By ending the failed federal prohibition of cannabis, the Cannabis Administration and Opportunity Act will ensure that Americans – especially Black and Brown Americans – no longer
have to fear arrest or be barred from public housing or federal financial aid for higher education for using cannabis in states where it’s legal. State-compliant cannabis businesses will finally be treated like other businesses and allowed access to essential financial services, like bank accounts and loans. Medical research will no longer be stifled.

But this alone is not enough. The Cannabis Administration and Opportunity Act includes restorative measures to lift up people and communities who were unfairly targeted in the War on Drugs. The bill automatically expunges federal non-violent marijuana crimes and allows an individual currently serving time in federal prison for non-violent marijuana crimes to petition a court for resentencing.

While federal descheduling impacts all states, it does not deschedule marijuana in states which choose to keep their own ban.

Nevertheless, descheduling would have a profound effect on the marijuana businesses operating in states which have already legalized use—either medically and/or recreationally—by normalizing income tax treatment, opening access to capital, and permitting interstate commerce in cannabis. The bill includes an excise tax with a rate of 10 percent in the first year, growing to 25 percent in the fifth year.

The bill would also establish three grant programs.

The Community Reinvestment Grant would provide funding for services — including job training, reentry services, legal aid, literacy programs, youth recreation programs and health education programs — for “individuals adversely impacted by the War on Drugs,” according to the draft bill.

Another, the Cannabis Opportunity Grant Program, would provide funds to any eligible state or locality to provide loans to assist small cannabis businesses owned by “economically disadvantaged individuals.”

The third, the Equitable Licensing Grant Program, would provide eligible states and localities funding to “develop and implement equitable cannabis licensing programs that minimize barriers to cannabis licensing and employment for individuals adversely impacted by the War on Drugs.”

The draft points to the disproportionate impact cannabis laws have had on non-white people.

“People of color have been historically targeted by discriminatory sentencing practices, resulting in Black men receiving drug sentences that are 13.1 percent longer than sentences imposed for white men and Latinos being nearly 6.5 times more likely to receive a Federal sentence for cannabis possession than non-Hispanic whites,” the bill says.

Surgeon General Vivek Murthy appeared to endorse decriminalizing marijuana.

“When it comes to decriminalization, I don’t think that there is value to individuals or to society to lock people up for marijuana use. I don’t think that serves anybody well.”

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