More than 20 percent of Americans live in states that permit adult use of marijuana. The industry is expected to produce nearly 300,000 jobs by 2020 and grow to $24 billion in annual revenue by 2025.
“The federal government must respect the decision Oregonians made at the polls and allow law-abiding marijuana businesses to go to the bank just like any other legal business,” Sen. Wyden said. “This three-step approach will spur job growth and boost our economy all while ensuring the industry is being held to a fair standard.”
“As more states follow Oregon’s leadership in legalizing and regulating marijuana, too many people are trapped between federal and state laws,” Rep. Blumenauer said. “It’s not right, and it’s not fair. We need change now – and this bill is the way to do it.”
The Way Forward
The Path to Marijuana Reform includes the bipartisan Small Business Tax Equity Act, which prevents legal marijuana businesses from getting hit with an unfair tax bill. The package also includes measures to shrink the gap between federal and state marijuana policies and responsibly de-schedule, tax and regulate marijuana.In addition to removing cannabis from the Uniform Controlled Substances Act, this legislation also removes enforcement power from the Drug Enforcement Administration (DEA) concerning marijuana possession, production, and sales, thus permitting state governments to regulate these activities as they see fit.
“The first-time introduction of this particular piece of legislation in the US Senate is another sign that the growing public support for ending our failed war on cannabis consumers nationwide is continuing to translate into political support amongst federal officials,” said National Organization for the Reform of Marijuana Laws (NORML) Executive Director Erik Altieri. “With marijuana legalization being supported by 60 percent of all Americans while Congress’ approval rating is in the low teens, ending our country’s disastrous prohibition against marijuana would not just be good policy, but good politics.”
“The flurry of bills on the Hill today are a reflection of the growing support for cannabis policy reform nationally,” said National Cannabis Industry Association (NCIA) executive director Aaron Smith.
“State-legal cannabis businesses have added tens of thousands of jobs, supplanted criminal markets, and generated tens of millions in new tax revenue,” Smith said. “States are clearly realizing the benefits of regulating marijuana and we are glad to see a growing number of federal policy makers are taking notice.”
“The number of bills presented in Washington today are in direct correlation with the increasing support for cannabis reform across the country,” said Kevin Gallagher, board member of the Cannabis Business Alliance. “As legalization continues to sweep the nation the tension between state and federal marijuana laws has also persisted.
“The recently introduced three-part plan will completely eradicate these strains on the legal cannabis industry to function and prosper like any other industry,” Gallagher said. “The federal government must respect the decision of overwhelming numbers of Americans who have voted time after time for safe, legalized and regulated cannabis.
“Doing so not only takes power and money out of the hands of drug cartels but puts funds into the hands of working class citizens,” Gallagher said. “States with regulated legal cannabis have created tens of thousands of jobs and generated tens of millions in additional tax revenue.
Colorado, the first U.S. state to legalize cannabis for adult use, reported 2016 tax and fees revenues from marijuana sales were about $199 million for the calendar year,” Gallagher said. “These taxes fund projects including school construction, public health and law enforcement.
“There are clear benefits for states that have chosen to regulate marijuana and more federal policy makers are starting to catch on,” Gallagher said. “A recent report from the Colorado Department of Public Health and Environment found that marijuana consumption by Colorado high school students has dipped since the state first permitted recreational Cannabis use by adults. The biannual poll also showed the percentage of high school students consuming Cannabis is smaller than the national average among teens.”
The Path to Marijuana Reform
The Path to Marijuana Reform includes the following three bills:
• The Small Business Tax Equity Act of 2017, introduced in the House by Rep. Carlos Curbelo (R-FL) and Rep. Earl Blumenauer (D-OR) and in the Senate by Sen. Ron Wyden (D-OR), Sen. Rand Paul (R-KY), and Sen. Michael Bennet (D-CO), would allow state-legal cannabis businesses to take normal business deductions like any other legal business. Currently, the law prohibits cannabis businesses from deducting expenses related to sales.
“Cannabis businesses aren’t asking for tax breaks or special treatment,” said Smith. “They are just asking to be taxed like any other legitimate business. NCIA and its members appreciate this strong support for a fair approach, and we’re especially proud to newly gain that support from Rep. Curbelo.”
• The Responsibly Addressing the Marijuana Policy Gap (RAMP) Act, introduced by Sen. Wyden and Rep. Blumenauer in their respective chambers, covers a broad range of issues at the federal level, including banking and tax fairness for businesses, civil forfeiture, and drug testing for federal employees. The two Oregon officials see the provisions in this bill, collectively, along with the other two bills introduced on Thursday, as the “Path to Marijuana Reform.” Finally, it would remove unfair burdens by ensuring veterans have access to state-legal medical marijuana, and protect Native American tribes from punishment under federal marijuana laws.
• The Marijuana Revenue and Regulation Act, introduced by Sen. Wyden, contains the provisions included in the Marijuana Tax Revenue Act and the Regulating Marijuana Like Alcohol Act. It would de-schedule, tax and regulate marijuana. It would impose an excise tax on marijuana products similar to current federal excise taxes on alcohol and tobacco, escalating annually to a top rate equal to 25 percent of the sales price.
Polis, Blumenauer Introduce Additional Bills
The Regulate Marijuana Like Alcohol Act, introduced in the House by Rep. Jared Polis (D-CO), would regulate marijuana like alcohol by inserting marijuana into the section of the U.S. Code that regulates “intoxicating liquors.” It would give oversight authority to the Bureau of Alcohol, Tobacco, Firearms and Explosives, and would establish a permitting system to cover the cost of that oversight.
The Marijuana Tax Revenue Act, introduced in the House by Rep. Blumenauer, would establish a federal excise tax on cannabis, starting at 10 percent and rising to 25 percent in the fifth year after passage. Marijuana producers, importers and wholesalers would be required to obtain a permit from the Department of Treasury, and the marijuana industry would be regulated in a manner similar to alcohol. Strict rules would prohibit sale or distribution of marijuana in states where it is illegal under state law. Representative Jared Polis (D-Colorado), is sponsoring a portion of this legislation in the House.
Legal Marijuana Is Working
Twenty-nine states and the District of Columbia have legalized marijuana for qualified patients, while eight states now regulate the production and sale of marijuana to all adults. An estimated 63 million Americans now reside in jurisdictions where anyone over the age of 21 may possess cannabis legally. Voters support these policy changes. According to a 2017 Quinnipiac University poll, 59 percent of Americans support full marijuana legalization and 71 percent believe that states, not the federal government, should set marijuana policy.
It also revealed that a vast majority of Americans — more than 70 percent, including majorities of Republicans, Democrats, independents, and every age group — oppose the federal government enforcing prohibition laws in states that have made marijuana legal for medical or adult use.
Statewide regulatory schemes are operating largely as voters and politicians intended. The enactment of these policies have not negatively impacted workplace safety, crime rates, traffic safety, or youth use patterns. They have stimulated economic development and tax revenue. Specifically, a 2017 report estimates that 123,000 Americans are now working full-time in the cannabis industry. Tax revenues from states like Colorado, Oregon, and Washington now exceed initial projections. Further, numerous studies have identified an association between cannabis access and lower rates of opioid use, abuse, hospitalizations, and mortality.
The ongoing enforcement of cannabis prohibition financially burdens taxpayers, encroaches upon civil liberties, engenders disrespect for the law, impedes legitimate scientific research into the plant’s medicinal properties, and disproportionately impacts communities of color.
By contrast, regulating the adult use of marijuana stimulates economic growth, saves lives, and has the support of the majority of the majority of Americans.