Cannabusiness Advisory

The Cannabis Administration and Opportunity Act: Too Much Too Soon? Too Little Too Late? Or Just the Right Time?

September 21, 2021


On July 14, 2021, Senators Chuck Schumer, Cory Booker and Ron Wyden introduced a bill to legalize and regulate cannabis at the federal level, titled “The Cannabis Administration and Opportunity Act.” This short, impactful bill is sure to stir up controversy and polarizing debate among legislators when, and if, it ever reaches the Senate floor.

The deadline for public comment recently passed – September 1, 2021 – and, unsurprisingly, the drafters of the bill were flooded with input from special interests groups, including the U.S. Cannabis Council, the Marijuana Policy Project, a number of prominent universities and legal scholars, and the DC Fiscal Policy Institute.

While not required, it is likely the drafters of the bill will revise based on some of the comments received, with the actual filing of the bill to follow. Once filed, it will be sent to committee for continued revision and debate.

Recent polls state that 60% of Americans support the legalization of cannabis, but, despite the ideological promises of a representative government, popular support does not necessarily convert into affirmative votes on the Senate floor. The bill requires the support of every Democratic Senator and at least 10 Republicans.

Many Washington insiders are doubtful the bill will garner the requisite support, but there are optimists who believe this to be a long overdue measure (reasonably) demanding bipartisan support. At the risk of seeming naïve, I count myself among those optimists. Ten years ago, this bill would not have made it off of the desktop of a hopeful pro-cannabis legislator, yet now the federal legalization of cannabis is being introduced by the Senate Majority Leader and has the support of dozens of other legislators. Regardless of whether this particular bill becomes law or not, the idea of legalizing cannabis at the federal level is not the far cry it used to be.

Here is what the bill, as currently written, seeks to do:

  • Remove marijuana and THC from the Controlled Substances Act.
  • Transfer agency jurisdiction over cannabis from the Drug Enforcement Administration to the Food and Drug Administration, Alcohol and Tobacco Tax and Trade Bureau, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
  • Permit the movement of cannabis products through the channels of interstate commerce, regardless of whether the channels are located in a state where cannabis is legal or illegal.
  • Impose federal excise tax on the sale of cultivated marijuana – 10% of the removal price for the first year followed by annual increases up to 25% over the next three years. (Removal price is the price of the sale from cultivator to any third party.)
  • Establish a trust fund and transfer the greater of either $10 million or 10% of the annual excise tax collected on cannabis. The fund will be managed by the Small Business Administration to be used for loans to women and historically socially and economically disadvantaged individuals to be used in connection with the recipient’s cannabis business.
  • Establish and conduct a study into the impacts of driving under the influence of marijuana.
  • Establish and conduct a study into the impacts of cannabis use on the human brain and the efficacy of cannabis use for medical purposes.
  • Promulgate federal advertising regulations to avoid marketing to children and young adults.
  • Provide funding to states to be used in connection with expungement proceedings for those convicted of state level marijuana crimes.

The bill does not force states to legalize cannabis. It will remain illegal in each state where it currently is illegal unless legalized pursuant to that state’s legislative process.

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