The much-anticipated proposed Senate bill that would legalize marijuana on the federal level was made public on July 14, 2021, by its lead sponsor, Senate Majority Leader Charles Schumer (D-New York). Called the Cannabis Administration and Opportunity Act, it removes marijuana from the Controlled Substances Act (CSA) and allows states to determine their own cannabis laws, similar to the way alcohol is federally regulated. Revenue generated by federal taxes would support restorative justice and public health and safety research.
The bill’s Senate sponsors note that federal cannabis reforms are especially urgent as more states legalize the adult and medical use of cannabis. They point to the fact that today more than 90 percent of Americans believe cannabis should be legal for either adult or medical use.
Though movement on cannabis legalization in the Senate is a welcome development, the proposed legislation contains elements that are of concern to many within the cannabis industry. In addition, there are significant gaps in the draft bill that will need to be clarified in the final version, which is not expected to be voted on until September 2021 at the earliest. The bill’s sponsors are seeking public comment from various stakeholders on several important topics, discussed below. In the meantime, important details on how cannabis will be regulated are omitted.
Federal Legalization
The Cannabis Administration and Opportunity Act removes cannabis from the CSA and directs that a new definition of cannabis be established within the Federal Food, Drug and Cosmetic Act for regulation of cannabis in food, dietary supplements, drugs and cosmetics. The new definition would retain the existing exception for hemp.
State law would continue to control the possession, production and distribution of cannabis. Shipment of cannabis into a state in violation of state law would remain prohibited, notwithstanding federal decriminalization. Federal criminal penalties are proposed for cannabis diversion, which is defined as the unlawful possession, production, distribution or purchase of 10 pounds or more of cannabis in violation of federal or state law. The bill further clarifies, however, that a state may not prohibit the interstate commerce of cannabis transported through its borders for lawful delivery into another state. This is similar to the current protections in place for the interstate transportation of hemp and hemp-derived products.
Federal Regulatory Jurisdiction
The legislation would transfer primary federal regulatory responsibility over cannabis from the Drug Enforcement Administration (DEA) to the Alcohol and Tobacco Tax and Trade Bureau (TTB), the Food and Drug Administration (FDA), and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
The FDA would have primary federal regulatory authority over the manufacture and marketing of cannabis products. TTB would have authority over the taxation of cannabis products and trade practices, including implementing a new federal track-and-trace process and enforcing prohibitions on unfair competition. ATF would have investigative and enforcement obligations over diversion and other criminal matters involving cannabis products, similar to its existing mandate with respect to alcohol and tobacco products.
This transfer of jurisdiction generally is…
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