Senate Majority Leader Chuck Schumer (D-NY) has been working to finalize a bill that will end federal cannabis prohibition. This long-anticipated Senate bill was supposed to be introduced back in April, but Democratic leadership said the timeline is being extended as they continue to work out various provisions “with the assistance of nearly a dozen Senate committees and input from numerous federal agencies.”
The Future of Cannabis Prohibition
The goal of the Cannabis Administration & Opportunity Act (CAOA) is to decriminalize cannabis and take it off of the schedule 1 drug list, as well as provide benefits to those who have been negatively impacted by cannabis trade, get them out of jail, and get their records expunged. Along with Schumer, Senate Finance Committee Chairman Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ) released the draft bill in July of 2021, but at the time, the issue touched on a number of controversies and White House support was limited.
Recently, Schumer joined other lawmakers, advocates, and celebrities in New York City in early May to speak at a marijuana rally as he works to finalize the bill. According to Marijuana Moment, Schumer stressed to rally attendees that he is working to win bipartisan support for the forthcoming bill he plans to introduce with Wyden and Booker. Schumer said he already met with six Republicans and is making good progress.
“Fundamentally, the bill would deschedule cannabis, which means that cannabis would no longer be a controlled substance and create a comprehensive regulatory system to manage the national legalization of cannabis, and from that point, regulate sales from a federal level,” Josh Glasstetter, a spokesperson for the U.S. Cannabis Council, said. “Many compare the CAOA to the MORE Act, which was recently passed in the House, because there are a lot of similarities. Both of these bills are comprehensive reform bills that aim to deschedule or legalize cannabis, but the CAOA is much more extensive and detailed in terms of how cannabis would actually be regulated.”
Why the Delay?
There are a few different reasons as to why the bill is being delayed. David Cannady, the founding and managing partner for Cannady & Associates, says one of the main reasons for the postponement is that Schumer, Wyden, and Booker want to ensure they have enough votes. Another reason is that there is a lot of turmoil in the country currently with multiple massacre shootings, Judge Ketanji Brown Jackson becoming the first black woman as a U.S. Supreme Court Justice, the abortion argument, and the war in Ukraine — so there is a lot on the plate right now. While cannabis was a priority, it has taken a back seat to other immediate actions.
“There is not really anything to be read into the delay. It was disappointing to be sure, but also not surprising given everything that has happened since the drop was introduced,” Glasstetter said. “It is also worth noting that sponsors have been very diligent in getting feedback from those in the senate and stakeholders, including some in the cannabis industry, and they have been working for months. If you synthesize a considerable amount of feedback across stakeholders and colleagues, it is a testament to the scope and ambitions of the bill in that it generated so much feedback and consideration, even at draft level from senators.”
The Impact of the CAOA on Cannabis Retailers
According to Glasstetter, the passing of the CAOA would have considerable effects across the entire cannabis industry. The federal status of cannabis would change as a result, and the most substantial impact for retailers is that they would suddenly have a broad range of new payment options, including credit cards and other options that are available to other businesses. Retailers would also find that they are no longer subject to 280E tax penalties, which prohibits taxpayers who are selling marijuana from deducting typical business expenses associated with those activities. This is why descheduling cannabis would be a complete game changer for retailers.
“My advice for retailers is to make sure that, depending on your state laws, your legal rights are thoroughly protected at the state level and to work with state legislators,” Demitri Downing, CEO of the Marijuana Industry Trade Association, said. “You want to protect your position in the supply chain, so work closely with your state government to make sure any changes are reflected in your rights that you have established over time. It looks like they have an understanding to protect the state systems, but then if they create a federal tracking and tracing system, does that mean there will be two systems? I would definitely email Schumer’s office to express my opinions.”
While the CAOA will bring about many positive changes on the federal level, there are still many questions left unanswered in the bill. As more information continues to debut, take Downing’s advice and stay connected with your local government to know what, if any, changes will be made.