25% federal marijuana tax, too few votes, blocking the Safe Banking Act

What we learned from our first real attempt to legalize marijuana federally in America

Senator Shumer and Senator Booker have published their first attempt at federal marijuana legalization called the Cannabis Administration and Opportunity Act, which is 163 pages. After reading the reviews and document, I wanted to share the 4 biggest takeaways that you should think about and discuss online. Marijuana Moment does a great job here at breaking the bill so you don’t have to read the full 163 pages.

25% federal tax rate on top of your state taxes

So much for killing the black market. I often wonder if someone who writes these bills is talking to someone in the industry about what they’re putting on paper. By introducing a tax rate of 15%, which will rise to 25% in 5 years, you guarantee a robust national black market for weed. This federal tax is in addition to your state taxes, which are currently between 20% and 50%. Granted, there are some tax breaks for sellers with sales less than $ 20 million to protect small businesses, but still imagine buying $ 100 in edibles and $ 42 in the state of California and pay $ 25 to the federal government? So, in 2026, will you be spending $ 167 on your $ 100 edibles? Hello black market!

One guess as to why Schumer and Booker included these tax figures in the bill was to attract Republicans and moderate Democrats. With those numbers now, they can try to get enough votes to pass the bill with tables and charts showing billions and billions of billions of tax revenues coming in through 2026. Nobody really believes that consumers will pay an accumulated tax rate of 60% on their cannabis products. Start high for high tax revenues to get the bill through and then work to bring it down or add 10 years to the timeframe. How much leeway do you think there is in cannabis? Yes, the margins are big and bold now with limited licenses and federal bans, but what do you think will happen to the margins on state legalization? As Jeff Bezos said ironically: “Your margins are my chance.” Hello Amazon and hello black market!

Interstate trade is allowed

As frequent readers of Cannabis.net know, we’ve said that any federal law must “grandfather” state licenses that are in good condition and allow businesses in one rule of law to ship and sell to another rule of law state. We also predicted that you cannot ship from a legal state to a non-legal state, just common sense in that one. The bill includes this detail as it would now allow cannabis companies to ship and sell products to legal retail stores across the country.

As marijuana moment says:

But it’s important to remember that this legislation – like other federal bills going through Congress – wouldn’t make marijuana legal in every state. The proposal explicitly preserves the right of states to uphold the ban if they so choose. For example, it stipulates that shipping marijuana to a state where the plant is banned would continue to be federally illegal.

However, the measure would make it clear that states cannot prevent companies from shipping cannabis products across their borders to other states where the plant is approved.

This is huge GOOD news for the industry as it, like banking, has held the industry up like a dam holding back a flood. If companies can ship products and wholesalers to other rule of law, it will create a much more efficient market, lower prices, harm black markets and give consumers better choices.

Senator Booker, co-sponsor of the bill, says he will block the Safe Banking Act until that bill is passed

This is bad news for the marijuana industry. Senator Booker has vowed to block the Safe Banking Act until that bill or some form of it is passed. Why in the world would Senator Booker block a helpful marijuana bill that his vice president is co-sponsoring? Booker is concerned that the Safe Banking Act will only add market share to the large, rich, and mostly white cannabis companies that are publicly traded and privately owned. Booker wants to see social justice in the form of social justice and social empowerment agreements that help applicants and companies get help first, not just the big money corporations. While we fully agree that social justice and economic empowerment must be a big part of the future of legal marijuana, blocking a good bill while waiting for a long chance means “winning the battle but losing the war to lose”.

On the one hand, the end customer basically doesn’t care whether pharmacies have bank accounts and can use credit cards. They know they only have to pay for weed in cash, inconvenient, but it is what it is. Preventing all cannabis companies from having bank accounts, credit card machines, and access to the U.S. remittance system harms all cannabis companies, not just the big ones. This is just one of the many factors holding back SE and EE applicants for marijuana licenses in many states. Sometimes you have to swallow a bit of vinegar with your water, and yes, banking would be open to big corporations, it would be open to thousands of small cannabis companies too. States have SE and EE programs, let them implement them as they do now. Win the war, get legalized, SE and EE are already underway and will continue to do so with the Safe Banking Act. Don’t cut your nose off despite your face. Support Safe Banking 100% and support this bill 100%. By not supporting the Safe Banking Act, are you hurting 5 big companies and trying to hold them hostage? Who is Booker Turning Cannabis Into A Fight By Stopping the Safe Banking Act? Self?

Since this CAOA doesn’t have enough votes to pass it is a bad idea not to support the real one that could happen and could postpone cannabis legalization if both fail.

Senator Schumer introduced the bill knowing he did not have the votes to pass it

Senator Schumer knows he doesn’t have the votes to pass the bill, and the president’s reaction to the bill is lukewarm at best. So why should Senator Schumer propose a bill that he knows can’t be passed right now? Firstly, he openly said that he wanted to negotiate with “the other side” about what they like and what they don’t, about the bill. He’s writing this bill as an open letter to the 10 Republican votes he needs and some hesitant Democratic senators. Second, it puts pressure on the “no” voters. Over 70% of the American public supports some form of marijuana legalization, and over 40 states now receive taxpayers’ money from the sale of cannabis. So Schumer knows that he has people on his side. It will increase public pressure to call and write the “no” votes to change their voices. Third, he is given recognition for attempting to legalize cannabis, and he can portray the Republican as the bad guys who oppose legal medicine, social justice, and economic empowerment. Does a “no” now mean supporting the failed war on drugs and not wanting to support minority communities? You can see how this can be portrayed as anti-capitalist, racist, stuck in 1954 White America if you don’t vote for the Cannabis Administration and Opportunity Act, right?

Conclusion

While it’s nowhere near a perfect legalization law, it is FEDERAL LEGALIZATION LAW, so let’s take our own advice and win the war and lose a few battles. This is great news and it is the first time a House majority speaker has tabled a law to legalize cannabis. He may not get it, but he got it out. While the Safe Banking Act doesn’t legalize cannabis, it does give legal businesses access to banks and credit cards. Both bills are extremely important and should have the full support of the cannabis industry. Will the Cannabis Administration and Opportunity Act be passed? Probably not, but it will lay the foundation and set up a plan for federal legalization. It will also create a rallying point in the next elections for the Senate and House of Representatives when it comes to “if he / she voted against cannabis legalization last year, vote for me instead!” Right now, Senator Schumer would basically need ten Republicans and one Democrat to say they would not support this bill if it were introduced to magically change their minds. Not entirely insane, but a big longshot to say the least. The fact that the president doesn’t support this law or federal legalization doesn’t help the Democrats or the cannabis cause right now. Strong White House support would help change some minds and possibly put enough business pressure on Republicans to get them to vote for some form of this bill.

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