The United States Congress recently moved one step closer to decriminalizing cannabis at the federal level when the House of Representatives approved a bill that would remove marijuana from the Controlled Substances Act (CSA). How likely is it that the legislation will ultimately become a law? And what does it mean for the U.S. cannabis industry? Read on to learn more.
Congress Votes on Law to Decriminalize Cannabis at Federal Level
H.R. 3884, the resolution introduced and voted on in the House, is historic. The bill marks the first time that either chamber of Congress has officially cast votes on a proposed law to decriminalize marijuana federally. The bold legislation, named the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, is intended to “address the devastating injustices caused by the War on Drugs.” Democratic Rep. and House Judiciary Chair Jerry Nadler introduced the MORE Act because the criminalization of marijuana has disproportionately impacted minorities and communities of color through selective enforcement of marijuana laws by police.
After the momentous vote in the House, Maryland Democratic Rep. Steny Hoyer issued a powerful statement observing that millions of Americans have had their lives destroyed by convictions for possessing just a small amount of marijuana. Hoyer further noted that “the racial disparities in conviction rates for those offenses are as shocking as they are unjust.”
Proponents of the legislation say that the measure would directly benefit the federal government by providing much-needed revenues to finance things like cannabis industry job training, legal aid for indigent criminal defendants, and substance abuse treatment for people with addiction problems. These things would be made possible by a 5% sales tax on all legal sales of cannabis and cannabis-related products.
Proposed Law Would Eliminate Criminal Penalties for Marijuana Possession
If the MORE Act becomes law, it would remove marijuana from the substances banned by the Controlled Substances Act (CSA). The MORE Act would also eliminate criminal penalties for the manufacture, distribution, or possession of marijuana. This means that the law would effectively legalize cannabis in the United States.
The MORE Act also includes a provision that would allow for the expungement of prior convictions for marijuana possession. This means that an individual with a previous conviction for unlawfully possessing marijuana in violation of federal law would potentially be eligible to have that conviction removed from their permanent record. Beyond that, anyone currently in prison for a federal cannabis offense could have the ability to petition for a sentencing review hearing.
Republican Support for MORE Act to Decriminalize Cannabis
The MORE Act had strong support from Democrats, with 222 Democratic members of the House voting in support of the legislation and just six (6) Democrats opposing it. Perhaps surprisingly, five (5) Republicans also voted in favor of decriminalizing cannabis. In fact, one prominent Republican, Florida Rep. Matt Gaetz, was the bill’s co-sponsor. Before voting, Gaetz gave an impassioned speech on the House floor and implored his fellow members in the House to change their positions on marijuana legalization because those stances “are overwhelmingly losing with the American people.”
In addition to Gaetz, the other Republicans who voted to end the federal law prohibiting marijuana manufacturing, distribution, and use included Don Young from Alaska, Tom McClintock from California, Brian Mast from Florida, and Denver Riggleman from Virginia.
Cannabis Decriminalization Not Likely to Pass in U.S. Senate
Despite some Republican support for the MORE Act, the bill passed by the Democratic-controlled House might not go very far in the Senate. Republicans still control the U.S. Senate, and the vast majority of the Republican Party has not shown any inclination to legalize marijuana at the federal level – or to do much of anything that would pave the way for marijuana legalization across the United States.
Mitch McConnell, the Senate Majority Leader and one of the most powerful members of the Republican Party, was highly critical of the House for spending time on the cannabis decriminalization legislation instead of focusing on a COVID-19 stimulus bill that he called more “serious and important” than a marijuana law. Current Democratic vice president elect Kamala Harris previously introduced a similar bill in the Senate, but Republicans in the Senate Finance Committee prevented the measure from reaching the Senate floor for a formal vote.
Some have criticized the recent bill passed in the House of Representatives because it has little chance of gaining enough support in the Senate to become a law. Kevin Sabet, the president of conservative anti-marijuana group Smart Approaches to Marijuana, said that “there is zero interest in moving this bill in the Senate and zero interest in supporting it in either the current administration or the incoming one.” Whether that last observation is actually true remains to be seen.
While president-elect Joe Biden has not yet come out in favor of legalizing cannabis at the federal level, earlier this year he did express support for the decriminalization of marijuana. A spokesperson for the Biden presidential transition team recently said that Biden would reschedule marijuana as a Schedule II drug as opposed to a Schedule I drug. Additionally, Biden “would allow states to continue to make their own choices regarding legalization.”
What Does the Future Hold for Cannabis Legalization in the United States?
While cannabis legalization at the federal level may not be on the horizon, individual states continue to push their own marijuana legalization efforts. A total of 15 states have already legalized cannabis for recreational use, and 36 states have legalized cannabis for medical use. Both of those numbers grew in the November 2020 election, when voters in five (5) states approved laws to legalize cannabis within their respective state borders. Just last month, voters in Arizona, Mississippi, Montana, New Jersey, and South Dakota voted to allow legal marijuana sales at state-licensed dispensaries.
The number of regulated cannabis markets figures to increase in the years ahead, as more and more states take up the issue of whether to legalize adult-use cannabis. There is a growing belief among many in the cannabis industry that states like Connecticut, New Mexico, New York, and Pennsylvania could get recreational cannabis legalization measures on the ballot in 2022.
Contact Scythian Real Estate for Information on Cannabis Operations Financing
Scythian Real Estate is a privately held cannabis real estate fund that partners with some of the largest and most sophisticated cannabis operators in the country. To learn more about the Scythian Real Estate Fund, send us an email.
PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.