On June 7, 2018, Senators Elizabeth Warren (Democrat – Massachusetts) and Cory Gardner (Republican – Colorado) introduced bipartisan legislation that would allow states to regulate cannabis without incurring any federal interference. The Strengthening the Tenth Amendment Through Entrusting States Act (in short, the STATES Act) would amend the Controlled Substances Act (CSA) by creating an exemption for states that have enacted legal cannabis laws, as well as remove industrial hemp from the CSA altogether. The STATES Act would also clarify that compliant banking transactions would not be considered trafficking under federal law, opening the door for banking opportunities for cannabis businesses in states that have legalized cannabis.
Recreational marijuana is currently legal in nine states as well as Washington D.C.; medical marijuana is legal in another 29. Under the STATES Act, US states would be allowed to regulate cannabis use and sales without the fear of federal intervention or prosecution by the federal government. A bipartisan companion bill to the STATES Act was introduced in the House by Representatives David Joyce (Republican – Ohio) and Earl Blumenauer (Democrat – Oregon).
The STATES act is the first bipartisan, bicameral attempt to end federal enforcement in states that have legalized cannabis. The language in the STATES Act says that the CSA no longer applies to states, territory, or tribal laws that relate “to the manufacture, production, possession, distribution, dispensation, administration, or delivery of” marijuana.
The STATES Act does maintain federal provisions to deter interstate trafficking; age restrictions on labor force in the cannabis industry; age restrictions on cannabis purchases (with exceptions for medical marijuana); as well as protection for workers in production of cannabis and cannabis products. The STATES Act provides for flexibility for legislators in states that have not reformed their cannabis laws so that lawmakers can work towards legislation that reflects the will of the citizens there while also regulating cannabis conference.
The STATES Act would also allow cannabis business to obtain basic banking services, remedying a problem that has had significant impact on the cannabis industry in the states where cannabis has been legalized. In addition, the act would also remove industrial hemp from the CSA, allowing for greater expansion of the rapidly growing hemp industry.
The STATES Act does have limitations, of course, including the fact that banking issues (including potential rejection by banks or higher fees for cannabis-connected accounts) and tax hurdles (current law does not allow for any normal business deductions by cannabis businesses) will remain. Arrests for possession and sale of cannabis would continue in states that do not have legal cannabis.
When asked about the bill before he left for the G7 Summit, President Trump indicated that he would “probably” sign it, saying, “I really do, I support Senator Gardner. I know exactly what he’s doing. We’re looking at it, but I probably will end up supporting that, yes.”
Jolene Forman, with the non-profit Drug Policy Alliance (which assisted with the bill’s development), said, “The STATES Act represents a landmark moment in the movement to end the decades-long war on marijuana. It creates a workable framework for approaching the future of marijuana policy.”
US Attorney General Jeff Sessions has been very outspoken about his disdain for cannabis, rescinding the Cole Memo in early January, which had provided protections for states that had legalized cannabis. Sessions had also asked Congressional leaders to eliminate the protections for cannabis contained in a federal budget rider that bar the DOJ from enforcing the federal marijuana ban in certain circumstances in May 2017. It has become clear that Congress must act to protect the cannabis industry from federal interference, and this legislation would go a long way towards allowing states to operate and regulate legal cannabis markets without federal interference.
Senator Cory Gardner indicated that outlawing legal cannabis was akin to “putting ketchup back in the bottle,” and spoke out about how the bill would have the potential to change the way that cannabis companies handle their money, because the bill would allow for the acceptance of cannabis money into banking institutions, which is currently problematic because cannabis remains federally illegal, and as such, banks are hesitant to accept cannabis industry cash due to fear of running afoul of federal banking regulations.
“This city of Denver, the state of Colorado, can collect taxes … they can take it to the bank,” Senator Gardner said. “But if you’re in the business, if you work for the business, you can’t get a bank loan or set up a bank account because of the concern over the conflict between the state and federal law. We need to fix this public hypocrisy.”
Senator Gardner also said, “The federal government is closing its eyes and plugging its ears while 46 states have acted. The bipartisan STATES Act fixes this problem once and for all by taking a states’ rights approach to the legal marijuana question. The bipartisan, commonsense bill ensures the federal government will respect the will of the voters – whether that is legalization or prohibition – and not interfere in any states’ legal marijuana industry.”
Senator Warren released a statement saying, “Outdated federal marijuana laws have perpetuated our broken criminal justice system, created barriers to research, and hindered economic development. States like Massachusetts have put a lot of work into implementing common sense marijuana regulations – and they have the right to enforce their own marijuana policies. The federal government needs to get out of the business of outlawing marijuana.”
Representative Blumenauer said, “For too long the senseless prohibition of marijuana has devastated communities, disproportionately impacting poor Americans and communities of color. Not to mention, it’s also wasted resources and stifled critical medical research.”
Representative Joyce also issued a statement, saying, “We should trust the people of the states, like Ohio, who have voted to implement responsible common-sense regulations and requirements for the use, production, and sale of cannabis. If the people of these states have decided to provide help for those veterans and others suffering from pain and other health issues, we should allow them access without government interference.”
The STATES Act is co-sponsored in the Senate by Senators Catherine Cortez Masto (Democrat – Nevada), Rand Paul (Republican – Kentucky), Lisa Murkowski (Republican – Arkansas), and Cory Booker (Democrat – New Jersey). It is co-sponsored in the House by Representatives Carlos Curbelo (Republican – Florida), Jared Polis (Democrat – Colorado), Ken Buck (Republican – Colorado), Barbara Lee (Democrat – California), Walter Jones (Republican -North Carolina), Dianna DeGette (Democrat – Colorado), Rob Blum (Republican – Iowa), Steve Cohen (Democrat – Tennessee), Matt Geatz (Republican – Florida), Eleanor Holmes Norton (Democrat – Washington DC), Tom McClintock (Republican – California), Luis Correa (Democrat – California), Jason Lewis (Republican – Minnesota), and Ro Khanna (Democrat – California).
In addition to the support of the co-sponsors, a number of organizations have voiced their support for the bill, including NORML, Taxpayers Protection Alliance, National Cannabis Industry Association, National Cannabis Bar Association, the ACLU, Americans for Tax Reform, the Marijuana Policy Project, and the Drug Policy Alliance.
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