Sen. Ron Wyden’s (D-Ore.) introduced the Marijuana Revenue and Regulation Act, Bill S. 420 on February 7 in the 116th congress to remove cannabis from the Controlled Substances Act (CSA). This bill would also establish a federal excise tax on legal sales of cannabis and create a system for businesses to apply for permits within the cannabis industry. The Internal Revenue Code of 1986 would be amended to provide for an excise tax and tax regulation of cannabis products.
Even with the current chaos in other areas of the federal government, a sense humor prevails with regards to introducing this bill. This is the second time legislation for cannabis in congress and the senate has been officially designated with the bill number 420. In fact, S. 420 is a companion measure to congressional bill H.R. 420 filed by Rep. Earl Blumenauer (D-Ore.) to regulate cannabis with the same protocol as alcohol including an indirect tax added to the price of cannabis products. Wyden and Blumenauer have dubbed the bills submitted by them as the “Path to Marijuana Reform.” If passed, this will begin the process to transform federal cannabis policy.
420 includes a package of measures including the Small Business Tax Equity Act and the Responsibly Addressing the Marijuana Policy Gap Act. The Small Business Tax Equity Act would allow sellers in states that have already legalized cannabis to allow for tax deductions.
The Responsibly Addressing the Marijuana Policy Gap Act would remove federal criminal penalties and civil asset forfeiture for individuals and businesses complying with state law and allow for research involving cannabis. The bill includes an expungement process for some marijuana convictions, which will allow those convicted of those specified convictions to regain the right to federal housing and financial aid. The bill also gives veterans access to legal medicinal cannabis programs and protects Native American tribes from prosecution under federal cannabis laws.
Wyden is working to allow cannabis companies operating in states with legalized cannabis industries to gain access to federally insured banks and bankruptcy protection. Specific labeling and advertising requirements would apply to cannabis products, which is very similar to those required for cigarettes and alcohol.
“The federal prohibition of marijuana is wrong, plain and simple,” Wyden said in a statement issued on February 7. “Too many lives have been wasted, and too many economic opportunities have been missed.”
“The House is doing its work and with the help of Senator Wyden’s leadership in the Senate, we will break through,” Blumenauer added in his statement.
If S. 420 passes, the Drug Enforcement Administration (DEA) would have 60 days to remove the drug from its list of controlled substances. However, in states that cannabis has not been legalized either medicinally or for recreational use, the sale of cannabis would remain illegal.
While many pro-cannabis advocates and those in the cannabis industry regard this federal bill as an important step to federal legalization, many admit it faces stiff competition and its passing could be defeated.
“It’s tough to see how things will shake out, but there is a very serious chance cannabis policy reform will move in the Senate,” said Morgan Fox of the National Cannabis Industry Association.
Wyden is the ranking member in Senate Finance Committee. In a press release distributed on Feb. 8, Wyden states that “The American people have elected the most pro-cannabis Congress in American history and significant pieces of legislation are being introduced.” He has served in the senate from 1996 to the present and served in congress from 1981 to 1986. Blumenauer has served in congress from 1995 to the present.