South Carolina Republican reveals marijuana legalization bill she’ll introduce in Congress

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U.S. Rep. Nancy Mace on Monday discusses the States Reform Act marijuana legalization bill she intends to introduce to Congress.

(This story was updated at 2:58 p.m. ET with additional comments, details.)

A new Republican-led push to legalize marijuana in the United States was unveiled Monday by U.S. Rep. Nancy Mace from South Carolina, raising industry hopes that some form of bipartisan marijuana legislation can pass Congress.

The 131-page States Reform Act – showcased during a Capitol Hill news conference – would remove marijuana from the list of federally controlled substances and allow state governments to continue leading the way on cannabis reform.

The bill would give each state the option to either continue launching new marijuana markets or to maintain a ban.

The legislation would also:

  • Establish a new federal regulatory framework to treat marijuana like alcohol by splitting industry oversight between the U.S. Food and Drug Administration for medical usage, the U.S. Department of Agriculture for farmers, and the Bureau of Alcohol, Tobacco, Firearms and Explosives for adult-use MJ products and industry enforcement. The Treasury Department’s Tax and Trade Bureau would also have jurisdiction over interstate cannabis commerce, according to further analysis from Mace’s office.
  • Remove all federal criminal penalties related to marijuana consumption and possession as well as expunge most nonviolent MJ criminal convictions.
  • Establish a 3% federal excise tax for marijuana products.
  • Give the marijuana sector parity with other industries in the eyes of the Small Business Administration, including eligibility for benefits such as government financial assistance, grants, micro-loans and the like.
  • Set the stage for both interstate and international marijuana trade.
  • Ensure that medical marijuana businesses and patients are protected from interference during the federal transition and allow for the continued operation of businesses under state law while the new federal framework is being established.

“Today, only three states lack some form of legal cannabis. My home state of South Carolina permits CBD, Florida allows medical marijuana, California and others have full recreational use, for example,” Mace said in a prepared statement. “It’s past time federal law codifies this reality.”

Mace said her bill is attempting to “remove cannabis from Schedule I in a manner consistent with the rights of states.”

“The States Reform Act takes special care to keep Americans and their children safe while ending federal interference with state cannabis laws,” Mace said.

“Washington needs to provide a framework which allows states to make their own decisions on cannabis moving forward. This bill does that.”

Mace also said during her news conference that if her bill is successful it would eliminate the need for the SAFE Banking Act, which would open the gates to banking access for state-legal marijuana companies.

Bill draws major support

The measure has already been formally endorsed by several pro-marijuana lobbying groups, including the Koch brothers-backed Cannabis Freedom Alliance, the Global Alliance for Cannabis Commerce and the U.S. Cannabis Council.

Also backing the bill is Americans for Prosperity, another conservative political group supported by the Koch brothers.

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Mace’s bill was well-received immediately by longtime legalization stalwarts, who said the legislation’s introduction gives them more hope than ever for meaningful reform at the federal level.

“Rep. Mace, along with multiple other Republicans, has put forward comprehensive and sensible legislation to repeal marijuana criminalization and this effort deserves serious consideration,” NORML Political Director Justin Strekal said in an emailed statement.

“Between the previously-passed MORE Act, the recent Senate proposal by Leader Schumer, and this new bill, it is truly a race to the top for the best ideas and smartest approaches to responsible reform,” Strekal said.

At the news conference, U.S. Cannabis Council CEO Steve Hawkins said the bill is an “extraordinary opportunity” for “millions of Americans,” projecting that if it gets through Congress it will result in “billions of tax and revenue dollars.”

Hawkins also suggested Mace’s bill could be the political bridge necessary to get marijuana reform “over the finish line” in Congress.

And Michael Correia, director of government relations for the National Cannabis Industry Association, said the bill is a “great start” that could “move (marijuana reform) forward in the long run” by boosting Republican support overall for cannabis reform.

“We’ve always wanted this to be pushed over to the states and treated like alcohol, and that’s what they’re doing” with Mace’s bill, Correia said.

In a Nov. 14 industry update, St. Louis-based investment banking firm Stifel GMP wrote that Mace’s bill marks a “positive and potentially sustainable shift” in the U.S. marijuana space.

“While we do not believe this bill will succeed, it could point to an evolving stance within the Republican party towards reflecting views more widely held by voters,” the report noted.

The larger takeaway, the report continued, is that even if Republicans win back control of the U.S. House in the 2022 midterm elections, that won’t spell doom for all marijuana bills in Congress because it’s morphed into a bipartisan issue.

The report estimated the chances of “federal reform” being passed by Congress after the midterms next year at 40%, up from 20%.

Accolades and suggestions

In emailed comments, several marijuana executives also applauded the bill and offered critiques.

Joe Bayern, the CEO of Massachusetts-based Curaleaf Holdings, said he’s “incredibly encouraged” by the bill, which he called a “thoughtful approach” to legalization.

Kim Rivers, CEO of Florida-based Trulieve Cannabis, called the bill a “consequential step in the right direction.”

Abner Kurtin, CEO of Massachusetts-based AWH, said Mace’s bill is a “strong middle-ground solution to federal cannabis legalization,” adding that it’s “not as ambitious” as Schumer’s bill but is “more productive” than previous legalization measures such as the STATES Act.

Kurtin faulted Mace’s bill, though, for not addressing social equity.

And Jim Cacioppo, CEO of Florida-based Jushi Holdings, called the bill a “comprehensive, thoughtful measure” and praised it specifically for its tax provisions and for supporting further medical cannabis research.

Mace’s bill also contains some major differences from other cannabis legislation.

For instance, the measure makes no mention of social equity provisions that have been championed by Democrats such as U.S. Sen. Cory Booker of New Jersey and which is a key portion of Senate Majority Leader Chuck Schumer’s current bill, the Cannabis Administration and Opportunity Act.

It does, however, include a possible waiver for Small Business Administration fees for “a small business or a socially and economically disadvantaged business.”

But Mace’s bill also proposes a much lower federal excise tax – only 3% – compared with the excise tax included in a draft of Schumer’s bill, which would start at 10% and be phased up to 25% over several years.

Several industry groups have objected to the high tax rate and said such a burden would only empower the illicit market.

“We want to make sure it’s very low,” Mace said at the news conference of federal marijuana tax rates.

She singled out tax rates as one of the biggest differences between her bill and other legalization measures.

“It has to be under 4% in order to reduce the opportunities for illicit markets,” Mace said.

John Schroyer can be reached at