First, let’s say that the Senate Majority Leader Chuck Schumer has filed his marijuana legalization bill. This is more than a year later after sharing a draft. Schumer is dependent on Republican support to override a filibuster. He hasn’t done much to draw that support, as the Senate is evenly divided. His fellow Democrats are unlikely to support him with their unanimous backing.
Is this Schumer’s method? In July last year, I criticised his 163 page discussion draft for being too complex, overly burdensome and prescriptive. It contained new regulations, taxes and spending programs, which I claimed were designed to alienate Republicans, who could be more inclined to support a federalist-friendly bill. This is also true for the new version.
Schumer’s Cannabis Administration and Opportunity Act (cosponsored by Sens. Cory Booker (D–N.J.) and Ron Wyden (D–Ore.The revised version now measures in at 296 pages and is nearly double the length of its predecessor. It isn’t a serious effort to create a bipartisan coalition for eliminating the unsustainable conflict between the federal prohibition of marijuana and the laws in 37 other states that permit medical or recreational cannabis use.
Taxes are a significant barrier to the displacement of the black market. These levies are the reason that most cannabis sales still come from unlicensed sellers in California and other states. After a decade-long experience in dealing with the problem, it would seem that the federal tax on cannabis products should be zero. Schumer’s original draft suggested a federal excise duty starting at 10% and increasing to 25% by the fifth year. This would add to often high-priced state and local taxes. Schumer left this provision intact after one year of discussion and careful consideration.
State-licensed suppliers of marijuana have found it more difficult to face black-market traders because they lack the necessary regulations. On top of 52 pages on taxation, the Cannabis Administration and Opportunity Act is composed of 71 pages. Along with giving authority to the Treasury Department and Bureau of Alcohol, Tobacco, Firearms, and Explosives over the cannabis sector, the bill also creates the Center for Cannabis Products in the Food and Drug Administration. FDA would have responsibility for setting standards and labeling, licensing marijuana companies, monitoring “misbranded”, “adulterated” or “misbranded” products and restricting distribution.
Schumer’s bill, in addition to specifying rules such as 21-year-old minimum purchasing age nationwide, would allow the FDA to make any regulation it considers necessary. The FDA can “impose additional restrictions on cannabis sales and distribution, including restrictions regarding access to and advertising of cannabis products,” if necessary for public health protection.
That clause is pretty alarming, given the FDA’s questionable understanding of what public health looks like in certain areas such regulation of nicotine vaping and tobacco products. Any arbitrary rules that the agency creates are likely to limit choice for consumers and support the black market, just as in the previous contexts.
Schumer’s new bill retains spending programs for “social equity,” which are likely to anger Republicans. The Community Reinvestment Grant Program “provides funds for eligible entities to administer services for persons adversely affected by the War on Drugs,” which includes job training, reentry, legal assistance, literacy programs, youth recreation or mentoring programs, and “health education programmes.” “The Cannabis Restorative Opportunity Program” would provide loans and technical support to assist small businesses that are owned and managed by people who are economically or socially marginalized. Funds would be provided by the Equitable Licensing Grant Program to help “develop and execute equitable cannabis licensing programs that reduce barriers to marijuana licensing and employment for those adversely affected by the War on Drugs.”
These programs are very similar to those described in the 91-page Marijuana Opportunity Reinvestment and Expungement Act. This was a relatively small bill passed by Congress in April. Two fewer Republicans voted in favor of the MORE Act than the earlier version that was approved by the House in December 2020. One of those GOP votes was cast by Rep. Matt Gaetz (R–Fla.Rep. Matt Gaetz (R-Fla.), was the ONLY Republican to cosponsor the MORE Act. He even objected the “social equity” stuff.
They are supposed to help reduce the effects of the drug war. These programs would be funded through taxes on marijuana consumers. They seem to me the least likely party to take responsibility for the damage caused by the federal government’s 85-year-old war on marijuana. It would be my preference to have the damages paid out by the politicians that supported the morally and empirically inept crusade. Schumer was one of those who supported it up until four year ago. In short, it should be paid out of general fund. This is based on the belief that voters who continued to elect drug wardens such as Joe Biden or Schumer, deserve to pay for the damage.
Even better, instead of trying to assist “small businesses concerns owned and managed by socio-economically disadvantaged individuals and entrepreneurs adversely affected by the War on Drugs,” by spending taxpayer money, government should remove the obstacles to their success by reducing, or eliminating, licensing requirements and heavy regulation. Schumer instead decided to throw more obstacles in their way, and then use the funds raised from his new taxes for some help.
Even though the MORE Act has received a waning Republican vote, Schumer realized that Democrats could lose control in either the one or both chambers of Congress. After considering the matter for over a year, Schumer concluded that if a bill is three times the length, it will be able to win. It depends on what definition you use of success. Signal Schumer, et. al.He may be able to use his virtues to blame Republicans for the failure of his good-faith efforts to repeal marijuana prohibition. If the aim is to remove unjust laws, compensate for some harm caused by them, and eliminate the uncertainty and risks that plague the marijuana industry, then a different approach could be more beneficial.
Other options exist. The Common Sense Cannabis Reform Act, sponsored by Rep. Dave Joyce (R–Ohio), is one-twentieth as long as Schumer’s monstrosity. The States Reform Act, which Rep. Nancy Mace (R–S.C.) Unveiled by Rep. Nancy Mace (R.S.C.) last autumn, the States Reform Act is deferential towards state policy decisions and imposes much less tax. The lower tax would be locked in for a period of 10 years which would make it easier to transition to a legal marketplace. The Respect State Marijuana Laws Act of 2017, sponsored by then-Rep. Dana Rohrabacher (R–Calif.The federal prohibition on marijuana would not be applicable to state-authorized conduct, as stated in a single sentence.
Each of these bills has attracted greater Republican support than did the MORE Act. Rohrabacher had 46 cosponsors including 14 Republicans. Joyce’s bill had nine cosponsors. Five of them are Republicans. Mace has only four cosponsors for his bill. All of them are Republicans, with one dying last March. It’s not enough to stop the GOP from rushing, but this is an initial step. Schumer and Democrats, on the other hand, seem to not be concerned about whether any member of the other side joins the legalization efforts, even though it is impossible for the effort to succeed without the cooperation at least some Republicans.
Schumer’s bill contains some great stuff. A declassification of marijuana would be a good thing. So would expunging the records of marijuana offenders, freeing those who are still behind bars, banning discrimination against cannabis consumers in immigration and the distribution of public benefits, and restoring their Second Amendment rights, which would be a byproduct of descheduling marijuana. The IRS regulations that significantly increase the income taxes marijuana business owners have to pay are also being scrapped. You have to wonder if at least part of these could have been achieved by legislation that was likely to pass in the short time frame that Democrats have retained control of Congress.
It’s not necessary to ask. The House has repeatedly supported legislation that allows financial institutions to provide services for marijuana-related businesses, with wide bipartisan support. It has been stalled in the Senate because Schumer insists that Schumer’s legislation be given priority. Schumer opposed to the SAFE Banking Act. It would eliminate a deadly barrier that causes marijuana merchants cash shortages, which makes them easy targets for robbery.
This is an example of how the perfect is the enemy of good. But Schumer’s bill is not only doomed but also woefully wrong-headed. This bill legitimizes marijuana business and imposes new taxes on them. It also makes them vulnerable to an agency that can’t be trusted to accurately weigh the benefits and costs, and even protect the consumer interests. It exacerbates the disadvantages that allow the licensed supplier to replace unauthorized dealers.
Wyden stated in a press release that “the federal government empowers the illicit marijuana market by failing to act.” This is exactly what the bill’s regulations and taxes would accomplish.
There is a possibility that it will be difficult to pass any kind of legalization bill through the Senate, even one with a limited focus on the repeal of the federal cannabis ban and the expungement of the records of the victims. Given his support of federal prohibition, even if the bill passes, President Biden could veto it. Democrats did have the opportunity to pass modest marijuana reforms, which could be a positive step in right now. But they are determined to waste this chance.