Long-awaited US Senate marijuana reform bill unveiled, but measure faces long climb

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Senate Majority Leader Chuck Schumer on Wednesday unveiled the draft of a comprehensive marijuana reform bill that would legalize the plant federally by removing it from the Controlled Substances Act while letting states continue to decide whether to prohibit or allow commercial sales.

The long-awaited measure comes as public sentiment supports marijuana reform and more states, including Schumer’s home state of New York, legalize recreational marijuana.

But the measure faces a daunting challenge in the U.S. Senate, where the bill likely would require 60 votes for passage, meaning at least 10 Republicans would have to be on board.

President Joe Biden also has yet to embrace full legalization, although he has expressed support for decriminalizing the drug.

The 163-page draft of the so-called Cannabis Administration and Opportunity Act is the result of a process led by Schumer and Democratic Sens. Cory Booker of New Jersey and Ron Wyden of Oregon.

The bill, if passed into law, would:

  • Let states decide if or how to legalize marijuana. This “states’ rights” approach has gained more traction in the Senate than other comprehensive reforms.
  • Eliminate the onerous Section 280E of the tax code by removing marijuana as a controlled substance.
  • Phase in federal taxes on cannabis product sales. The draft appears to initially call for a 10% tax.
  • Create three grant programs to help the economically-disadvantaged, including those hurt by the war on drugs.
  • Bolster funding for research into cannabis, including its impacts on the brain and mental health. In public hearings, conservatives often talk about potential harm from marijuana use and the need for more research before legalization is considered.
  • Remove federal penalties on marijuana and expunge nonviolent federal marijuana criminal records.

The bill was modeled partly after the social equity-focused MORE Act, which the U.S. House of Representatives passed in December.

The new House, convened in January, has yet to pass similar comprehensive marijuana reform.

Steve Hawkins, CEO of the U.S. Cannabis Council and executive director of the Marijuana Policy Project, in a statement implored Congress “to consider the importance of this moment; in looking at the eight states that have legalized cannabis since the election last November, it’s clear that ending federal cannabis prohibition is the will of the American people.”

David Mangone, a marijuana lobbyist, wrote in an email to MJBizDaily on Wednesday that the “Cannabis Administration and Opportunity Act is the most comprehensive and serious effort to reform cannabis laws to date.”

Getting bipartisan support an ‘uphill battle’

“The fact that the bill authors are looking to address issues such as social justice, industry growth, and consumer protection shows the appreciation for the complexity of cannabis policy,” Mangone wrote.

Mangone is director of policy and government affairs at the Washington DC-based Liaison Group, an advocacy group for marijuana reform for such clients as the National Cannabis Roundtable.

But, he added, “like any bill in the Senate, even the best written policy still needs to garner 60 votes – gaining bipartisan support will be an uphill battle.”

The Drug Policy Alliance, however, was critical of a provision in the bill that would continue to subject federal employees to drug testing and deny some individuals the opportunity to expunge their marijuana conviction records.

Owen Bennett, an equity analyst for New York-based investment bank Jefferies, wrote Wednesday that the far-reaching Schumer bill is unlikely to pass in its current form.

Still, Bennett noted, “this move is still very important as it now sets the wheels in motion for some kind of reform over the next 12 months.”

Cry for banking reform

Pablo Zuanic, an equity analyst with New York-based investment banking firm Cantor Fitzgerald, wrote in a research note Wednesday morning that “conventional wisdom has it that, at most, (cannabis) banking reform will be the only component that eventually garners enough support (in the current Senate) to pass.”

Zuanic’s comments came just before seeing Schumer’s draft.

Scott Greiper, president of New York-based Viridian Capital Advisors, indicated to MJBizDaily on Tuesday that his firm doesn’t expect federal legalization of marijuana for a couple of years.

Frank Colombo, Viridian’s director of data analytics, said legalization is more likely to happen by 2023 or 2024.

Jeff Smith can be reached at jeff.smith@mjbizdaily.com.