Changes to the Senate’s Cannabis Legalization Effort


The cannabis legalization debate has been passed around at the top of the Senate leadership for a year, so what are the most significant changes to the newly filed Cannabis Administration and Opportunity Act?

Thankfully, when it was released last week, the Senate leadership offered a summary of some of the changes from the discussion draft. They started with the general provisions and worked on the more nuanced stuff.

First off is the makeup of The Cannabis Products Advisory Committee. The original language called for the Department of Health and Human Services (DHS) to form a committee to advise other agencies on all things cannabis legalization. Over the last year, like everything else you’ll see here, stakeholders offered their take across 1,800 public comments. 

“The introduced legislation establishes a 22-member advisory committee, made up of industry representatives (with an emphasis on socially underrepresented stakeholders), federal and state regulators, labor union representation, and experts in public health and safety,” the revisions noted.  

So in a sense, the committee was in the initial version and then stakeholders gave their take on how to fill it. Hopefully, the more seasoned operators who had their heads down staying afloat over the year have a seat at the table too, and not just the people with PR teams talking about their expertise. You would honestly be shocked how impressed some public officials are sometimes with a press release that pretends you represent something. 

That independent committee will make the recommendations to the head of DHS, who will take it into account as they form regulations. 

“Like all federal advisory committees, members will be expected to consult with a diverse set of stakeholders in representing the views of the populations they represent,” the summary noted. 

What is Cannabis?

Next, they dove into the very definition of cannabis itself. If you’re going to legalize something you got to agree on what it is. The authors noted last year this was one of the places they were seeking input, given the discrepancies with the booming hemp market. Anything breaking the federal hemp THC threshold was forced to be destroyed even if it was still hemp. A big waste of money for many. To alleviate this, the federal limit in the bill would be more than doubled to .7% for hemp. 

Stakeholders noted in addition to the hemp THC levels, the fast-growing world of B-list cannabinoids was not being completely taken into account.

“Other stakeholders have raised concerns that existing law’s reference to delta-9 THC concentration fails to account for different types of THC that can have a similar effect on the user, such as hemp-derived delta-8 THC and delta-10 THC, which already exist in the marketplace,” the report read. “Stakeholders have also raised concerns that the dry weight measurement standard in existing law may create situations where industry members may be able to manipulate the amount of allowable THC by increasing the overall weight of a cannabis product, thereby avoiding tax and public health requirements.”

The authors also noted that the descheduling the bill is talking about speaks specifically to THC that was derived from the whole cannabis plant. Other synthetic versions of cannabis are not covered. I think it’s fair to guess there won’t be any hiccups in the Marinol supply chain, not that anyone would need it at that point, but the attorney general will be required to figure out how we’re going to schedule all that other stuff over the first year of the law being on the books. 

Another thing the authors spoke specifically to was drug testing of federal employees under Ronald Reagan’s Executive Order 12564 attached to the wider drug-free workplace moment. The authors note testing required under that executive order will no longer treat cannabis as an illegal drug. There are some exceptions though for certain Law Enforcement and National Security positions. 

Native Americans and Social Equity

Some stakeholders noted on the impact of the war on drugs on Native Americans being lost in the wider equity debate that can sometimes feel more urban. The authors spoke to those concerns noting, “The introduced bill makes a number of conforming amendments related to tribes; provides that various governmental agencies must engage in good faith, meaningful, and timely consultation with Native entities; and provides dedicated funding under certain programs related to tribal governments or tribal entities.”

Some stakeholders noted the specific perils social equity funds have faced since the idea was first introduced six years ago as a tangible thing, as Oakland prepared to implement its licensing process around Prop 64. On the worst occasions in the years since the hiccups of equity programs would bear the blame for wider licensing programs, that could have been better thought out. 

“Stakeholders have raised concerns that such trust fund mechanisms may delay the delivery of social equity funds and assistance to new or operating businesses because it can take a number of years for a trust fund to accumulate the necessary excise tax revenue,” the authors noted. “In order to accelerate the availability of funds, the introduced bill specifies funding levels for each program as a direct appropriation from the Treasury General Fund and requires the Secretary of the Treasury to reimburse the General Fund from revenues in the CAOA Opportunity Trust Fund. A similar reimbursement model exists under present law with respect to other trust funds.”

All the costs of these funds will be covered by the excise taxes written into the bill. 

Driving High

As the authors got into the discussion around highway safety, they noted that it’s difficult to quantify high driving since it’s been so hard to do cannabis research in America for so long. 

“There is a scientific consensus that cannabis has some impairing effect on drivers, but questions remain about what those effects are and their level of severity,” the report notes.

Given all this, the bill will direct the National Highway Traffic Safety Administration to research a whole bunch of aspects of driving high. Modern research will be better than it would have been until recently given how much the quality of research-grade marijuana is jumping right now in the U.S., after the feds ended the University of Mississippi’s decades-long monopoly on producing it. 

The bill also will give the Department of Transportation three years to figure out some kind of national impairment standard for driving too high. If they can’t figure it out by then, they’ll have to explain why to Congress, every two years after. 

Sentencing Reform

The original version of the bill included a felony for the possession or intent to distribute more than 10 pounds without a permit. It could have led to a $10,000 fine and 10 years behind bars. Stakeholders noted it would be fairer to have a misdemeanor before the jump to a felony, given the intent of the whole bill. 

This led to the authors adding a misdemeanor for possessing between 10 and 20 pounds. The new language is punishable by up to one year in prison and a $50,000 fine. If you get caught with more than 20 pounds, those numbers could be bumped up to five years and a $100,000 fine. 

On the very positive side. The resentencing and expungement process has been setup for automation. The previous version of the bill would have required a whole sentencing hearing. This would have led to a backlog of people trying to clear their records and have a better shot in life. 

Instead, ”the court shall automatically, after a sentencing review, expunge each federal cannabis conviction, vacate any remaining sentence, and resentence the defendant as if this law had been in place prior to the original sentencing.” 

Small Businesses 

The authors noted they wanted to build on some of the Small Business Administration (SBA) provisions the House already passed with The MORE Act. This makes perfect sense, as whatever does end up going to the other side of Capitol Hill would be that much more palatable. 

But there is still a gap in communication between advocates in both houses. When we talked with Rep. Earl Blumenauer a couple of months back about cannabis banking provisions being included in The COMPETES Act, he was yet to see the bill. 

The Senate’s vision is a 10-year lending pilot program in which SBA would direct loans to small businesses owned by those adversely impacted by the War on Drugs. The SBA would also need to provide training grants for marketing, management, and other technical assistance.

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