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BREAKING: U.S. House of Representatives Votes to Decriminalize and Tax Cannabis

Earlier today, The U.S. House of Representatives passed a bill decriminalizing cannabis at the national level and implementing a sales tax on cannabis products sold throughout the U.S. The Marijuana Opportunity Reinvestment and Expungement Act, otherwise known as the MORE Act, was approved in a chamber vote of 228-164. Five Republican representatives joined the Democratic majority while six Democrats dissented as part of the Republican minority.

The Act contains a number of changes that would fundamentally impact the cannabis industry if implemented. With a primary thrust of decriminalizing cannabis at the federal level, the Act also calls for the expungement of cannabis-related convictions of nonviolent offenders. Under this provision, nonviolent offenders across the country could request hearings where a court may reduce or expunge previous cannabis-related convictions.

Furthermore, the Act would institute a 5% sales tax on U.S. sales of cannabis. Tax proceeds are earmarked towards education and legal services for individuals affected by the prohibition of cannabis. Additionally, the bill would allow cannabis businesses to take tax deductions and credits, previously prohibited by § 280E of the tax code, and open the door for large financial institutions to transact with cannabis businesses.

The MORE Act would radically change the landscape of the cannabis industry in the U.S., upending decades of prohibition. Critically, however, it faces an uphill battle in the Senate where it is likely to be defeated by the current Republican majority. Even so, the Act offers a promising glimpse into the future of cannabis across the county and at the federal level. We will continue to monitor the MORE act as it passes to the Senate and provide updates on all relevant changes.

With a practical approach, Chad provides compliance guidance and litigation defense on matters related to cannabis, advertising and marketing, teleservices, and other consumer protection issues.

2560 1707 Walter (Chad) Blackham
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