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October 20, 2021 Feature

Well, the Times, They Are A-Changin’: How Far Will Congress Go in Reforming the Criminal Justice System through Federal Cannabis Legalization?

By Gregory S. Kaufman and Jessica R. Rodgers

Do you think the use of marijuana should be legal, or not?” When Gallup asked this question to adult Americans in 1969, the answer was an overwhelming “no” (84 percent no – 12 percent yes). In 2012, the year that Colorado and Washington State became the first states to legalize cannabis for adult use, the split among Americans was nearly even (50 percent no, 48 percent yes). Fast forward 50 years from the first poll to just before the 2020 presidential election, and we find that Americans’ attitudes towards legal cannabis changed dramatically. Today, with 40 percent of Americans living in states with legal adult-use cannabis, 68 percent of adult Americans think cannabis should be legal. Megan Brenan, Support for Legal Marijuana Inches Up to New High of 68%, Gallup (Nov. 9, 2020). After several doomed attempts to pass federal legislation legalizing cannabis and with public sentiment strongly in favor of legalization, Congress appears poised to act with a reasonable chance of putting a bill on the president’s desk. What this legislation may be and the role the federal government will play in a legal nationwide cannabis regime is slowly coming into focus.

In recent decades, Americans have grown to accept a variety of reasons for cannabis reform, including the belief that cannabis should never have been treated the same as other illicit drugs; the belief that cannabis has medicinal value (or is, at least, no more harmful than alcohol or tobacco); the simple recognition that a legal cannabis market creates another source of wealth and employment; or that the War on Drugs, so fiercely prosecuted in the 1980s and 1990s, was a failure that filled jails and left destruction in its wake.

These sentiments motivated 40 states and the District of Columbia to allow some form of legal cannabis use, with both medical and adult-use cannabis fully legal in 18 states and DC. States have truly been the incubators of democracy when it comes to cannabis legalization efforts. Most states legalized cannabis through the ballot box, with only Illinois, New Mexico, New York, Vermont, and Virginia doing so through the legislature. As a result, each state regulates cannabis differently. These differing regimes often reflect the differing motivations that animated reform efforts in that state. Regardless of the reasons, the steady march of state reform continues despite the ongoing federal prohibition of cannabis under the Controlled Substances Act (CSA). Under the CSA, it is illegal to manufacture, possess, or distribute cannabis. 21 U.S.C. § 841 (2016). But with the growing recognition that the current federal/state dichotomy is untenable and the changed dynamics in Congress, the rising tide of cannabis reform is lapping at the steps of the Capitol.

Today, members of Congress are being confronted with the question of whether to legalize cannabis and, if so, when and how. Although cannabis legalization, in all its forms, can be seen as criminal justice reform, the legalization conversation is homing in on what the specific goals should be and who will benefit most.

The conversation includes whether to address any social inequities resulting from the illegality of cannabis. In this conversation, social equity measures are receiving a lot of attention. Social equity can involve different things, but the central idea posits that individuals and communities disproportionately harmed by the War on Drugs must be addressed and benefit from a legal cannabis industry. For example, legislation could provide restorative justice for those previously arrested for cannabis-related crimes through expungements and preferential industry licensing.

But how far will Congress go to reform drug and criminal justice policies involving cannabis? Will reform be sweeping, or will incrementalism prevail? This article examines the most recent attempts to legalize cannabis, or at least reduce burdens on legal state-level industries, and what Congress may attempt to accomplish in the near future. Whatever legislative effort is made to end federal illegality, righting the wrongs of the past is an important issue for those in Congress most favorable to federal legalization.

History of Federal Treatment of Cannabis

Before looking to where the country may be going with regard to cannabis legalization, it is important to examine the past. The Anglo-American cannabis saga began in the 1600s with the first industrial hemp operation chartered by King James I, and for a time the Virginia colony even required farmers to grow hemp. Through the 1800s, state and federal governments encouraged the production of hemp, but the governmental attitude towards the plant shifted at the turn of the century. As the Mexican Revolution came to an end and the number of immigrants from Mexico moving into the United States increased, Americans began to associate cannabis use with immigrants. Xenophobic stereotypes cropped up around the plant, and the federal government sought to regulate its use by controlling supply and demand. On August 2, 1937, the government enacted the Marihuana Tax Act of 1937, Pub. L. No. 75-238, 50 Stat. 551 (MTA), to require expensive transfer tax stamps for each sale of cannabis in the U.S. While the MTA did not specifically criminalize the use or possession of cannabis, it is often cited as the beginning of the federal prohibition of cannabis.

Over the next several decades, the federal government relied on the MTA to penalize cannabis in the country. Despite this, recreational drug use exploded in the 1960s, prompting President Nixon to respond with the War on Drugs and the Controlled Substances Act. Enacted as Title II of the Comprehensive Drug Abuse Prevention and Control Act of 1970 (Pub. L. No. 91-513, 84 Stat. 1236), the CSA established federal jurisdiction over the production, possession, and distribution of specified plants and substances. The CSA classifies these plants and substances into five drug schedules based on the dangerousness of the drug, the drug’s potential for abuse and addiction, and the drug’s potential for medical use.

The CSA designated cannabis as a Schedule I controlled substance. Such designation means that the drug has no currently accepted medical use and presents a high potential for abuse. Cannabis’s designation as a Schedule I drug has long baffled many, as Schedule I hosts the most dangerous of all scheduled drugs and counts heroin, ecstasy, and peyote in its class. As such, cannabis is considered even more dangerous than the drugs behind the current opioid epidemic, such as fentanyl and oxycodone, which are Schedule II drugs. In the 1970s, states briefly took recognition of this fact, with a handful of legislatures passing measures to decriminalize simple possession. Yet this effort was short-lived, and each of Nixon’s successors advanced new fronts in the War on Drugs.

The Reagan administration passed several comprehensive drug bills that sought to eliminate drug use and trafficking through enhanced criminal penalties and forfeiture. Internal Revenue Code section 280E also entered the Code books during this time, essentially disallowing tax deductions for business expenses incurred in the illicit drug trade. During the Clinton administration, the number of federal inmates nearly doubled (over half of those newly incarcerated going into prison for drug offenses). Too Little Too Late: President Clinton’s Prison Legacy, Just. Pol’y Inst. (Feb. 2001). As the War on Drugs raged, California became the first state to confront it head on.

California voters passed Proposition 215, the Compassionate Use Act of 1996, legalizing medicinal cannabis use. Over the next few years, Washington, Oregon, Colorado, Montana, and several other states followed suit. The measures obviously created a direct conflict with federal law, and the executive branch responded in kind with criminal raids and civil enforcement.

Colorado and Washington became the first states to legalize recreational adult use in 2012. The Obama administration acknowledged the trend in 2013, when then Deputy Attorney General James M. Cole issued a memorandum directing federal agents to focus their “limited investigative and prosecutorial resources” on eight areas of significant concern and to avoid interference with state-legal cannabis markets. These areas included protecting minors, preventing the involvement of organized crime, and preventing public safety dangers associated with use or production. For its part, Congress tacked on the Rohrabacher–Farr amendment to the 2014 omnibus spending bill, which prohibited the Department of Justice from using funds to “prevent . . . states from implementing their own State laws that authorize the use, distribution, possession, or cultivation of medical marijuana.” A form of this amendment continued to be included in subsequent omnibus spending bills. Commerce, Justice, Science, and Related Agencies Appropriations Act, 2015, 113th Cong., 2d Sess., 160 Cong. Rec. H4968 (daily ed. May 14, 2014).

Despite the fact that former Attorney General Jeff Sessions rescinded the Cole Memorandum in 2018, state cannabis legalization has only gained in momentum since then. A diversity of states are contemplating legislation or ballot measure efforts, so these numbers will increase, as will the tension between public conviction and federal prohibition. While the legal cannabis industry explodes, it confronts a legacy of a permanent underclass of citizens created by criminal convictions for a product that is now a multibillion-dollar professional industry. Att’y Gen. Memo. (Jan. 4, 2018).

Data tell a story of the effects of the War on Drugs. The Prison Policy Initiative reports that as of 2020, about half a million Americans were imprisoned for drug offenses (one in five were nonviolent drug convictions), and there are nearly a million arrests for simple drug possession every year. Wendy Sawyer & Peter Wagner, Mass Incarcerations: The Whole Pie 2020, Prison Pol’y Initiative (Mar. 24, 2020). According to the ACLU, officials made almost 700,000 marijuana arrests in 2018 alone, equal to approximately 43 percent of all drug arrests. In the same report, the ACLU found that on average, a Black person is 3.64 times more likely to be arrested for cannabis possession than a white person, even though cannabis use by the two racial groups is roughly equal. These stats haven’t changed much from the prior decade. ACLU, A Tale of Two Countries: Racially Targeted Arrests in the Era of Marijuana Reform (2020); Ryan S. King & Marc Mauer, (2006), The War on Marijuana: The Transformation of the War on Drugs in the 1990s, 3 Harm Reduction J., art. 6 (2006).

Minor possession arrests can have an effect on a person’s life disproportionate to the crime. Such arrests can derail a person’s future, driving them into economic distress and a potential cycle of interactions with the law. Christopher R. Dennison & Stephen Demuth, The More You Have, the More You Lose: Criminal Justice Involvement, Ascribed Socioeconomic Status, and Achieved SES, 65 Soc. Probs. 191 (2018). The Biden administration’s new Attorney General Merrick Garland acknowledged as much in his 2021 confirmation hearing—that although cannabis offenses are “nonviolent crime[s]” that do not require incarceration, the US is incarcerating people and doing so at “significantly different rates in different communities.” Att’y Gen. Confirmation Hearing, Day 1: Cory Booker’s Time with Merrick Garland, C-Span (Feb. 22, 2021). As he noted succinctly, “that is wrong and it’s the kind of problem that will then follow a person for the rest of their lives. It will make it impossible to get [a] job and will lead to a downward economic spiral for their family.” Decriminalization, unfortunately, has not done enough to address the issue or make enforcement more equitable. Virginia Governor Ralph Northam recently stated that Virginia moved to fully legalize cannabis almost three years earlier than originally planned because the cannabis possession laws continued to be disproportionately enforced even after the state made possession a civil infraction. Press Release, Va. Gov. Ralph S. Northam, Governor Northam Proposes Accelerating Marijuana Legalization in Virginia (Mar. 31, 2021).

Federal illegality of cannabis is affecting American wallets, too. A recent study estimated that enforcement of cannabis possession laws alone cost American taxpayers nationwide nearly $3.6 billion annually, not to mention the projected billions in tax revenue and about a million jobs that could be created by federal legalization. The War on Marijuana in Black and White, ACLU (2020); Katie Zezima, Study: Legal Marijuana Could Generate More Than $132 Billion in Federal Tax Revenue and 1 Million Jobs, Wash. Post (Jan. 10, 2018). Some advocates of federal legalization say that these funds should be reinvested in communities ravaged by the War on Drugs.

Despite this, the current administration’s position on the issue remains murky, and it is unclear how President Biden will react should a bill legalizing cannabis land on his desk. His White House recently fired several staffers for past cannabis use (Dana Farrington, White House Tried to Snuff Out Report on Staffers Who Were Let Go for Pot Use, NPR (Mar. 19, 2021)), and his platform includes only national decriminalization—not legalization—of cannabis. C.J. Ciaramella, White House Press Secretary: Joe Biden’s Opposition to Legalizing Marijuana Hasn’t Changed, Reason (Mar. 30, 2021). In addition, the president’s proposed 2022 budget preserves a ban on selling and taxing cannabis in the District of Columbia. Ally Schweitzer, The Ban on Recreational Weed Sales in D.C. Lives on in Biden’s Proposed Budget, NPR (June 2, 2021). Past administrations have not been significantly more accommodating of efforts to address cannabis at a federal level. Nevertheless, legislative efforts have been, and continue to be, made to pass cannabis reforms. Together they represent a potpourri of possible reforms, from addressing a narrow issue, like access to banking, or restricting federal interference with legal state programs to full legalization with or without social equity and restorative justice aims. None clearly resolve the question of what the federal regulatory role will be if legalization happens.

In this swirl of competing reform proposals, Senate Majority Leader Chuck Schumer signaled his reluctance to move stand-alone legislation, such as banking reform, ahead of promised comprehensive reform that he recently put forth with Senators Cory Booker and Ron Wyden. His proposal is intended “to ensure restorative justice, public health and implement responsible taxes and regulations” prioritizing small businesses while restricting the ability of large alcohol and tobacco companies from overtaking the industry. Kyle Jaegar, Schumer Reiterates That Marijuana Legalization Must Pass Before Cannabis Banking Reform, Marijuana Moment (May 11, 2021). Which approach—if any—will be successful remains to seen.

SAFE Banking Act of 2019

While some banks and credit unions work with cannabis businesses, the industry remains severely underbanked. Many financial services and insurance companies remain unwilling to do business with entities and persons whose income the federal government views as proceeds of illegal activity. This fear of federal repercussions forces many cannabis-related businesses to operate entirely in cash. Stories abound of company representatives showing up at state and federal taxing authorities with millions of dollars in cash to pay their taxes in special cash rooms designed to handle these large payments. Ryan Prete & Brenna Goth, Sacks of Cash Spur States to Seek Cannabis Tax Solutions, Bloomberg (Aug. 26, 2019). In addition, instances of armed robberies of cash-heavy cannabis businesses are increasingly common. Efforts have been made in the past and are currently underway in Congress to remedy this unfortunate situation.

The Secure and Fair Enforcement Banking Act of 2021, or the SAFE Banking Act, would federally legalize the banking of proceeds derived from the sale of cannabis, effectively paving the way for the financial services sector to offer its services to the cannabis industry. H.R. 1996, 117th Cong. (2021). This bill establishes that proceeds from a transaction involving activities of legitimate cannabis-related businesses (including hemp-related businesses) are not proceeds from unlawful activity. It generally prohibits a federal banking regulator from penalizing or otherwise discouraging a depository institution for providing banking services to legitimate cannabis-related businesses. Furthermore, depository institutions are not, under federal law, liable or subject to asset forfeiture for providing loans or other financial services to legitimate cannabis-related businesses. The bill also provides that a federal banking agency may not request or order depository institutions to terminate customer accounts unless (1) the agency has a valid reason for doing so and (2) that reason is not based solely on reputation risk. Valid reasons for terminating an account include threats to national security and involvement in terrorist financing, including state sponsorship of terrorism.

Additionally, the SAFE Banking Act protects insurers that provide financial services to cannabis-related legitimate businesses or service providers and protects the investing of any income derived from the provision of such financial services. These protections would be important because cannabis businesses have significant insurance-related needs that are currently difficult to satisfy or are satisfied at costs far exceeding what non–cannabis businesses pay. Providers charge higher premiums, in part, because they perceive greater risk to their businesses as a result of having customers that deal in a Schedule I controlled substance.

The SAFE Banking Act would require the Financial Crimes Enforcement Network to update its regulatory guidance on suspicious activity reporting, and the Federal Financial Institutions Examination Council would also have to update its examination procedures.

The SAFE Banking Act passed the House on April 19, 2021, by a vote of 321 to 101 and was received by the Senate and referred to the Committee on Banking, Housing and Urban Affairs on April 20, 2021 (also known as 420, a date some ascribe significance to in the cannabis industry), but it’s unclear if the bill will advance out of the Senate.

The bill enjoys bipartisan support from over 21 state governors and 36 organizations (like the National Organization for the Reform of Marijuana Laws (NORML) and the American Bankers Association). Safe Banking Governors Letter (Apr. 19, 2021); Congressman Ed Perlmutter, H.R. 1996, The SAFE Banking Act (2021); Support The Secure and Fair Enforcement Banking Act (SAFE Banking Act), NORML; Rob Nichols, Am. Bankers Ass’n, ABA Letter to the House: Support H.R. 1996, SAFE Banking Act of 2021 (Apr. 19, 2021). Allowing the multibillion-dollar-a-year industry to deposit its funds in financial institutions, which are highly regulated, will give law enforcement greater visibility into the market, thereby reducing opportunities for money laundering, terrorist and drug cartel financing, and other truly criminal activity. The Act would also greatly aid in the growth and maturation of the cannabis industry through expanded access to capital and other financial services.

The bill does not, however, address prohibition, and it offers little in the way of restorative criminal justice reform by merely directing the Government Accountability Office to study access barriers to the market by minority- and women-owned cannabis businesses. There is a concern that the piecemeal nature of the SAFE Banking Act could inhibit the potential for greater cannabis reform. Senate Majority Leader Schumer’s preference for broad reforms around cannabis rather than piecemeal reforms suggests that this bill may not be put to a vote before the full Senate.

Strengthening the Tenth Amendment Through Entrusting States (STATES) Act

A middle ground is the Strengthening the Tenth Amendment Through Entrusting States Act (STATES Act), reintroduced on April 4, 2019, in the House and the Senate (as H.R. 2093 and S. 1028, respectively), which sought to amend the CSA so that it would not apply to “persons acting in compliance with state law relating to the manufacture, production, possession, distribution, dispensation, administration or delivery” of cannabis, and to establish that compliant transactions are not trafficking and do not result in proceeds of an unlawful transaction. This would allow the states to regulate cannabis without the threat of federal interference and would remove the business tax barriers imposed by IRC § 280E.The Act also directed the Government Accountability Office to conduct a study of the effects of cannabis legalization on traffic safety. Ultimately, both bills died in Committee when the 116th Congress ended.

Like the SAFE Banking Act, the bipartisan STATES Act would not have fully legalized or descheduled cannabis. Rather, it offered a narrow exemption from federal law for state- and tribal-legal cannabis businesses. Likewise, this bill would have also opened the door to the financial services industry working with state-licensed cannabis businesses and their service providers. For some existing cannabis industry participants, this may be more attractive than federal legalization and regulation. Those operators understand the varying state regulatory regimes and have developed expertise in running their businesses under those circumstances. But the measure would not have addressed harms from continued prohibition. It also would not have provided assistance to those disproportionately affected by the consequences of decades of illegality.

Common Sense Cannabis Reform Act

On May 12, 2021, Representative Joyce (R-OH) introduced the Common Sense Cannabis Reform for Veterans, Small Businesses, and Medical Professionals Act. (H.R. 3105, 117th Cong. (2021)). This Act is a hybrid of prior cannabis reform bills.

The Act removes cannabis from the CSA and offers similar protections to those provided by the SAFE Banking Act. It would continue to be illegal to transport cannabis to states where cannabis continues to be illegal under state law and it would task the Food & Drug Administration and Alcohol and Tobacco Tax and Trade Bureau within the Treasury Department to develop regulations for cannabis similar to the federal rules regulating alcohol. The Act would also allow the Veterans Administration to prescribe medical cannabis to veterans.

Notably, the Act does not contain any provisions specifically aimed at social equity or restorative justice. Yet any bill that ends cannabis prohibition naturally will result in fewer cannabis-related arrests and incarcerations. It is likely that this Act was introduced as a counterweight to the comprehensive reform bill promised by Senate Majority Leader Schumer. Erin J. Farley & Stan Orchowsky, Measuring the Criminal Justice System Impacts of Marijuana Legalization and Decriminalization Using State Data, NIJ (2019).

Marijuana Opportunity Reinvestment and Expungement (MORE) Act of 2019

On May 28, House Democrats reintroduced The Marijuana Opportunity Reinvestment and Expungement (MORE) Act (H.R. 3617, 117th Cong. (2021)). Press Release, Congressman Jerry Nadler, Nadler, Blumenauer, Lee, Jackson Lee, Jeffries, and Velázquez Reintroduce Comprehensive Marijuana Reform Legislation (May 28, 2021). Originally introduced in 2019 as H.R. 3884, the MORE Act would decriminalize cannabis at the federal level by completely descheduling the substance. The MORE Act does not create a full-fledged federal regulatory system, but it would create a system of federal taxation and permitting. The MORE Act is the most comprehensive cannabis reform bill officially introduced to date (as of publication time), as it is the first to include several provisions that would attempt to remedy the social legacy of past illegality of cannabis.

The bill proceeds from several important findings, including that “communities that have been most harmed by cannabis prohibition are benefiting the least from the legal marijuana marketplace . . .” and the approximately 600,000 annual cannabis-related arrests disproportionately impact people of color. In addition, “[f]ewer than one-fifth of cannabis business owners identify as minorities and only approximately four percent are [B]lack.” The bill addresses social justice through opportunity creation and financial support. Among other things, the bill authorizes the imposition of a 5% sales tax on cannabis and cannabis products. These funds would be used to create an Opportunity Trust Fund to address the disproportionate effect of bygone drug policies on low-income communities and communities of color. The Fund would seed several programs. For example, the Community Reinvestment Grant Program would provide services to those most adversely impacted by harmful drug policies, including job training, health education, literacy programs, and substance abuse treatment. The legislation also directs the Small Business Administration (SBA) to make loans available to socially and economically disadvantaged small business owners and to develop a grant program that would help states make their cannabis licensing systems more equitable.

To further its restorative impact, the bill establishes a process to expunge certain cannabis-related convictions and to conduct sentencing review hearings. The Congressional Budget Office estimated that thousands of inmates would be released early, and decriminalization alone would reduce time served by 73,000 prison-years among existing and future inmates. H.R. 3884, MORE Act of 2020. The MORE Act would also prohibit the denial of federal benefits or adverse determinations under the immigration laws on the basis of cannabis-related offenses. This version of the bill does not include language added to the prior version that would have prevented persons with prior cannabis convictions from obtaining federal permits to operate cannabis businesses.

The MORE Act does not dispense with the current patchwork of varying state cannabis laws. Nor would the Act address the federal regulatory regimes, such as the FDA’s authority to regulate certain cannabis products. In addition, the Act does not address existing international drug control treaty obligations of the United States.

The first edition of the MORE Act represented the first time the full House voted on a proposal to deschedule cannabis, and at that time the House approved it in a 228 to 164 vote. Although the legislation failed in the Senate in 2020, the legislature is currently better positioned to enact reform. However, any reform will still need significant Republican support in the Senate in order to pass.

Cannabis Administration and Opportunity Act

On July 14, 2021, Senators Schumer, Booker, and Wyden released a “discussion draft” of their comprehensive federal cannabis reform proposal. The Senators have not formally introduced the Cannabis Administration & Opportunity Act (CAOA or the Act) for congressional consideration, but they released the draft publicly to obtain comment from stakeholders.

The CAOA offers a far-reaching proposal to address social equity, restorative justice, research, and taxation while preserving the integrity of existing state cannabis laws. It resembles the MORE Act in many ways, but has more detail and approaches federal regulation a bit differently. The draft Act (as it stands at the time of this article’s publication) proposes to federally legalize cannabis by removing it from the CSA and to regulate it like alcohol and tobacco. States would become the primary regulators of cannabis and would control the specifics of cannabis possession, production, and distribution. States could therefore refuse to legalize cannabis at the state level, but they could not restrict the transportation of cannabis through their respective jurisdictions on interstate commerce grounds. On the federal side, the Act would transfer jurisdiction over cannabis from the 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).

Like the MORE Act, the CAOA would have significant tax consequences for the legal industry. Of course, descheduling cannabis under either bill would remove the tax burden currently imposed by Internal Revenue Code section 280E. The Act would also establish a comprehensive taxation regime overseen by the TTB. The proposal borrows heavily from the excise tax scheme applied to alcohol and tobacco products that are based on volume, potency, or a percentage of price. The tax rates would gradually increase over time, and at the fifth year after implementation, the tax rate would reach 25 percent of the prevailing price of cannabis per ounce for cannabis flower or per-milligram of THC for any cannabis extracts. All tax revenue would be directed to the Opportunity Trust Fund, a fund intended to promote social equity goals through equitable licensing and financial support to industry participants and communities that have been disproportionately impacted by the War on Drugs.

The Trust Fund is but one piece of the CAOA’s equity plan. Nonviolent federal convictions would also be expunged within one year of enactment, and states would be encouraged to do the same. The Act would also establish the Equitable Licensing Grant Program, which would “provide funding to eligible states and localities to implement cannabis licensing programs that minimize barriers for individuals adversely affected by the War on Drugs.” Detailed Summary, Cannabis Administration & Opportunity Act Discussion Draft. That program would, among other things, require that the participating state adopt some of the following practices: application fee waivers for certain low-income individuals, prohibit the denial of a license based on certain cannabis-related offenses, prohibit suspicionless drug testing of certain employees, and create a cannabis licensing board that reflects the demographics of the state or locality in which it sits. Discussion Draft, Cannabis Administration & Opportunity Act. Finally, the Act would establish a Community Reinvestment Grant Program (to fund certain nonprofits to provide social services to adversely affected individuals) as well as a Cannabis Opportunity Program (to fund state-based loan programs for small businesses in the cannabis industry owned by socially and economically disadvantaged individuals). The legislation would likewise make SBA programs and services available to legitimate cannabis-related businesses.

Like the MORE Act, the CAOA is ambitious, and its extensive efforts relating to restorative justice should be applauded. Overall, the draft bill contains a lot of good ideas but also raises many unanswered questions. Moreover, both bills’ tax proposals may result in unduly burdensome taxation of the industry that can be exploited by the unregulated and untaxed illicit market. The addition of multiple federal regulators, including introduction of FDA oversight of cannabis products, layered on top of existing state regulators may be particularly concerning for the industry. Presumably, the unofficial comment period will be useful in raising and addressing these concerns and many other aspects of the CAOA’s attempt at comprehensive federal cannabis reform.

Analysis

It appears that the more comprehensive the reform efforts, the less bipartisan—and presidential— support those efforts enjoy. Even if overwhelming support existed, it would be a tall order for Congress to meaningfully address social equity and restorative justice goals while layering federal regulation on markets that have developed in a federal regulatory void.

The SAFE Banking Act has the most bipartisan support but would only tangentially advance criminal justice reform. The STATES Act couldn’t make it out of Congress, and critics will say the Common Sense Act, while laudable, simply doesn’t go far enough. The MORE Act certainly is the preferred bill by leading civil rights groups such as The Leadership Conference on Civil and Human Rights and NORML. Support the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, Leadership Conf. on Civ. & Hum. Rts. (June 4, 2021); History-Making Legislation to Repeal Marijuana Prohibition Reintroduced, NORML (May 28, 2021). Similarly, the CAOA represents Congress’s first serious attempt at comprehensive reform of the nation’s cannabis laws and regulations, with an eye towards restorative justice. Yet these Acts’ emphasis on remediation and equity add a depth and complexity that could ultimately prove fatal to their progress.

Cannabis legalization is viewed by many as being intertwined with racial justice and criminal reform. Charlotte Resing, Marijuana Legalization Is a Racial Justice Issue, ACLU (Apr. 20, 2018). At the end of the day, any bill that ends prohibition will decrease the public’s contact with the criminal justice system and would free up law enforcement to focus on other issues. Ed Chung, Perez Maritza & Lea Hunter, Rethinking Federal Marijuana Policy, Ctr. for Am. Progress (May 1, 2018). Reduced policing would save the approximately $600,000,000 spent annually on arresting cannabis users. Cody Joregensen, How Marijuana Legalization Would Benefit the Criminal Justice System, Blue Rev. (Jan. 13, 2020). Advocates see these cost savings and revenue generated from bringing the illicit cannabis market into a regulated and taxed market as potential sources of funding for social equity and restorative justice initiatives.

Even with the current momentum behind legalization, there simply may not be enough of an appetite in Congress and the White House for comprehensive reform. It is difficult to conjure up a scenario where those lawmakers who are needed to pass reform but are cautious and those committed to sweeping cannabis reform can find an agreeable middle ground. It is not clear that any of the proposed legislation offers a happy medium. Proponents of broad reform may have to decide if they can accept piecemeal changes where doing more is presently politically impossible. Perhaps the words of the late Justice Ruth Bader Ginsberg will ring true: “Generally change in our society is incremental” and “[r]eal change, enduring change, happens one step at a time.”

Conclusion

Efforts to change federal cannabis-related laws have been made with good intentions but with no clear view as to what a post-legalization country will look like. Any reform will likely need some form of bipartisan support in the Senate in order to pass. And even then, it may not appease a reticent president. Perhaps the most important question to answer when considering an end to the long road of criminalization is what should be the primary goal of legalization? Is it simply to legalize and regulate a multibillion-dollar interstate industry? Or is it to seek to repair decades of damage done and create real opportunities for those people and communities disproportionately harmed over those decades? And is it acceptable to the American public to meet somewhere in between?

Threading the needle to accomplish both will be difficult, if not impossible, to meet. Those nearly 70 percent of adult Americans in favor of legalizing cannabis have an opportunity to help shape what a future with federally legal cannabis will look like and who should benefit. These are complicated questions that require careful consideration and passionate advocacy. Past legislative attempts failed, for a variety of reasons, but perhaps the country has reached the tipping point where it is ready to confront the past and chart the future of cannabis laws in America.

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Gregory S. Kaufman is a litigation partner and co-leader of the cannabis industry team in the Washington, DC, office of Eversheds Sutherland. Greg is the co-author of The State of Cannabis Law, A Fifty State Compendium.

Jessica R. Rodgers is an associate in the Washington, DC, office of Eversheds Sutherland.