Republican Lawmakers File Bill To Tax And Regulate Marijuana As Alternative To Democratic Proposals

Several Republican members of Congress on Monday are formally introducing a bill to federally legalize and tax marijuana as an alternative to far-reaching Democratic-led reform proposals and scaled-down GOP cannabis descheduling legislation.

Rep. Nancy Mace (R-SC) is sponsoring the bill—titled the States Reform Act—along with five initial Republican cosponsors. It would end federal marijuana prohibition while taking specific steps to ensure that businesses in existing state markets can continue to operate unencumbered by changing federal rules.

Unlike more modest measures previously championed by some of Mace’s GOP colleagues, this legislation—an updated draft version of which was obtained by Marijuana Moment over the weekend—represents an attempt to bridge a partisan divide. It does that by incorporating certain equity provisions such as expungements for people with non-violent cannabis convictions and imposing an excise tax, revenue from which would support community reinvestment, law enforcement and Small Business Administration (SBA) activities.

Marijuana Moment first reported on an earlier draft version of the bill earlier this month, and it quickly became apparent that industry stakeholders see an opportunity in the Republican-led effort.

The reason for that response largely comes down to the fact that there’s skepticism that Democratic-led legalization bills will be able to pass without GOP buy-in. While Democrats hold majorities in both chambers, in addition to controlling the White House, the margins for passage are slim.

Along with Mace, the bill is cosponsored by Reps. Tom McClintock (R-CA), Don Young (R-AK), Brian Mast (R-FL), Ken Buck (R-CO) and Peter Meijer (R-MI). A press conference on the bill’s introduction is scheduled for Monday afternoon.

A Democratic-led bill to end prohibition and promote social equity did clear the House Judiciary Committee in September. And Senate leadership is preparing to file a separate legalization proposal after unveiling a draft version in July.

Under the new Mace legalization bill, marijuana would be removed from the Controlled Substances Act, with retroactive effects for people previously punished. Prior federal cannabis convictions would need to be expunged within one year.

There would be a 3 percent federal excise tax on cannabis. That’s somewhat less than the 3.75 percent included in an initial draft of Mace’s bill that Marijuana Moment reported on earlier this month, and is significantly lower than tax rates in Democrat-led marijuana bills.

The Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau (TTB)—renamed as the Alcohol, Tobacco, and Cannabis Tax and Trade Bureau—would be the chief regulator for marijuana with respect to interstate commerce and international trade. The agency would create a track and trace system for cannabis, and federal officials would be authorized to issue packaging and labelling requirements for products.

The Food and Drug Administration (FDA) would be limited in its regulatory authority, with the intent being that it would have no more control over cannabis than it does for alcohol except when it comes to medical cannabis. The agency could prescribe serving sizes, certify designated state medical cannabis products and approve and regulate pharmaceuticals derived from marijuana, but could not ban the use of cannabis or its derivates in non-drug applications, like in designated state medical cannabis products, dietary supplements, foods, beverages, non-drug topicals or cosmetics.

Enforcement authority would be transferred from the Drug Enforcement Administration to a newly renamed Bureau of Alcohol, Tobacco, Cannabis, Firearms and Explosives.

Raw cannabis would be considered an agricultural commodity regulated by the U.S. Department of Agriculture (USDA).

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A federal permit would be required to operate a cannabis business, and certain past marijuana convictions could render someone ineligible to obtain it.

The legislation would grandfather existing state-licensed cannabis operators into the federal scheme to ensure continued patient access and incentivize participation in the legal market.

As federal agencies work to promulgate rules, there would be safe harbor provisions to protect patients and marijuana businesses acting in compliance with existing state laws.

Revenue from federal marijuana taxes would go to a newly created Law Enforcement Retraining and Successful Second Chances Fund, and distributed to programs under the Omnibus Crime Control and Safe Streets Act, the Edward Byrne Memorial Justice Assistance Grant (JAG) program, the Community Oriented Policing Services Hiring program, a new Successful Second Chances program under the Small Business Administration (SBA), veterans mental health programs, state programs to combat opioid addiction and efforts to prevent youth cannabis use.

A national age limit of 21 would be set for legal recreational marijuana products, which would be enforced by withholding funds from any state that seeks to lower that age. The limit would not apply to medical cannabis. Advertisements targeting minors or that are misleading would be banned.

The Treasury Department would be required to conduct periodic studies on the characteristics of the cannabis industry and issue recommendations for improving regulations and tax administration. The Bureau of Labor Statistics would also be directed to regularly report data on marijuana industry ownership and employment.

Military veterans could not be discriminated against in hiring for federal positions due to cannabis consumption, and doctors at the Department of Veterans Affairs would be allowed to issue medical marijuana recommendations. People who left the military with other than honorable, bad conduct or dishonorable discharges solely for cannabis offenses would be entitled to an upgrade to a general discharge.

Federal agencies could continue drug testing employees for marijuana.

Cannabis business would become eligible for SBA loans and other relief.

The U.S. Trade Representative would be directed to send trade missions to other countries that have legalized cannabis imports and exports.

All references to “marijuana” or “marihuana” in federal laws and regulations would be changed to “cannabis” under the bill, which Business Insider separately covered on Monday.

Some Republicans have led, or joined their Democratic colleagues, on other marijuana bills, but they’ve generally been far more scaled back measures—simply protecting states that choose to legalize or descheduling cannabis without touching social equity issues or creating a federal tax on sales.

In any case, polling shows that the public is ready for an end to prohibition. Sixty-eight percent of U.S. adults said they back legalizing cannabis in a Gallup poll released this month—and that includes majorities of Democrats, Republicans and independents.

Yet, despite that support, President Joe Biden continues to oppose adult-use legalization. Instead, he’s supportive of more modest proposals to federally decriminalize cannabis, legalize the plant for medical use and let states set their own policies.

Whether he’d sign any Democratic- or Republican-led legalization bill is an open question.

While the president is personally against comprehensively ending prohibition, the Congressional Research Service released a report this month explaining steps he and his administration could take to repair the harms of cannabis criminalization.

Read the text of the Mace legalization bill below: 

Biden’s FDA Pick Prescribed Cannabinoid Medicine And Recognized Marijuana’s Therapeutic Potential

Image element courtesy of Tim Evanson.