Democratic Senators Legalization Plan – Cannabis News, Lifestyle

The Democrats have a legalization plan. US senators have passed another law legalizing cannabis. The Cannabis Administration and Opportunity Act (CAOA) legislation would create a tax and regulatory structure for legal cannabis. America’s National Cannabis Industry Association (NCIA) has welcomed the law but remains cautious about the impact on small businesses.

Democratic senators legalization plan

The bill was introduced by Chuck Schumer, Ron Wyden and Cory Booker. The CAOA is the only pending Senate legislation related to cannabis reform.

The bill aims to remove cannabis from the federal Controlled Substances Act. It’s also trying to shift regulatory authority for cannabis from the Drug Enforcement Administration (DEA) to the Food and Drug Administration (FDA), among other bureaucracies responsible for “public health and safety.”

The legislation promises to maintain a “hands-off” approach to the 37 states that have already legalized medical or recreational use.

However, the Senate Democrats’ bill would introduce a state consumption tax of 5-25% on top of state taxes imposed on the cannabis industry. Taxing another already heavily taxed industry has the NCIA concerned about the Senate bill.

“We applaud the authors of this law for working to bring the federal law in line with states and the vast majority of voters who have called for an end to the ban,” said Aaron Smith, co-founder and chief executive officer of the NCIA . “We look forward to working with senators on both sides of the aisle to improve the tax provisions in this small cannabis business bill and eventually enact it.”

Details of the Democrats’ legalization plan

Drafts of the Cannabis Administration and Opportunity Act have been circulating since last year. The NCIA and other legalization advocacy groups provided feedback, which the bill’s authors incorporated. The most important changes include:

• Increase in THC limits for hemp from 0.3% to 0.7%.
• Rather than face a criminal charge for possessing or distributing over £10, the final version of the bill would see someone facing a criminal charge for possessing or distributing over £20.
• Rescind federal cannabis convictions and remaining penalties
• Non-citizens who have been expelled for cannabis-related offenses can apply for the government to review this decision.
• Establishes a 10-year bridging loan program. The government (through the Small Business Administration) will make direct loans to financial institutions. Which, in turn, make small business loans to start-ups or companies that are “owned by people adversely affected by the war on drugs.”
• Removes the requirement for cannabis businesses to hold a security deposit if they had less than $100.00 in excise debt in the prior year.
• Includes rules similar to malt beverage manufacturers and wholesalers.

Whitney Economics produced a report outlining problems with the Democrats’ legalization plan. The new tax structure will impose $1.1 billion on the already struggling cannabis industry.

Anyone following the introduction of legalization in Canada knows that excessive excise taxes are crippling the industry. Without excise tax breaks, Canada’s resilient cannabis market will no doubt consolidate into a few large producers.

Perhaps that is the ultimate goal behind the Democrats’ legalization plan.

What about the SAFE Banking Act?

The SAFE Banking Act, if passed, will open up banking and other financial services to the cannabis industry. She has broad support among Democrats and Republicans in the Senate. Despite this, the bill has not yet been put to the vote.

“The passage of this far-reaching bill is a historic and important effort, but we hope the Senate moves quickly to pass the bipartisan SAFE Banking Act,” Smith said.

footnote(s)

https://thecannabisindustry.org/
https://thecannabisindustry.org/wp-content/uploads/2021/08/An-economic-analysis-of-CAOA-by-Whitney-Economics-08-07-21-for-congress-1.pdf