Federal GOP Advances Bill to Legalize Cannabis

A new Republican-led cannabis legalization bill is making its way through Congress and is emerging as one of the best chances yet for federal legalization.

Representative Nancy Mace’s (R-SC) recently introduced ‘States Reform Act’ would deschedule cannabis federally and establish a new regulatory framework to treat cannabis like alcohol. Other key aspects of the proposal include:

  • A 3.75% excise tax imposed on cannabis sales, with revenue directed toward grant programs for community reentry programs, law enforcement, and small business aid for newly licensed cannabis companies;
  • Establishing the Department of the Treasury’s Alcohol and Tobacco Tax and Trade Bureau as the chief regulator for cannabis with respect to interstate commerce;
  • Limiting the regulatory authority of the Food and Drug Administration such that the agency’s control over cannabis is analogous to its purview over alcohol; and
  • Grandfathering existing state cannabis licensees into the federal scheme to promote patient access and incentivize market participation.

Representative Mace describes her bill as a “compromise” between basic descheduling efforts advanced by other GOP members and more far-reaching legislation introduced by Democrats in the House and Senate earlier this year. Those Democrat proposals seek to implement sweeping reform that would, among other things, fully decriminalize cannabis at the federal level, establish a 25% excise tax and banking protections, expunge federal non-violent cannabis convictions, and establish new grant programs to fund social equity programs at the state level.

Regardless of the method, cannabis legalization continues to gain traction at the federal level. And, with states continuing to implement their own rules and regulations, the possibility of complementary federal legalization is likely to introduce additional complexities and herald major changes for the nascent industry.