Cannabis News

Federal Cannabis Legislation: The CAOA is Back!

Yesterday, Majority Leader Senator Chuck Schumer and Senators Cory Booker and Ron Wyden presented the Cannabis Administration and Opportunities Act (CAOA) in the Senate. This version of the CAOA is a big deal because it has been over a year since the draft discussion of the bill was shown to the public. It’s also a big deal because we finally have a meaningful cannabis bill (with input from so many stakeholders) coming out of the Senate, which is notorious for otherwise killing House-generated cannabis legislation – including the Safe Banks Act.

The CAOA is now heading for Senate committee review. Nobody knows his chances of success, whether written, modified or combined with one or more of the Chamber’s proposals.

What does this version of CAOA do?

Senator Booker’s website states that the CAOA:

“Ending Federal Cannabis Prohibition by Removing Cannabis from the Controlled Substances Act; empowering states to create their own cannabis laws; ensuring that federal regulations protect public health and safety; and prioritizing restorative and economic justice.

The details, among many others (including for research and employment and labor impacts), are that the CAOA:

  1. Completely removes cannabis from the Controlled Substances Act (CSA), but allows federal traffic enforcement in states that choose to retain prohibition. Notably, interstate commerce is explicitly permitted. As with hemp under the 2018 Farm Bill, licensed operators will be able to transport cannabis through prohibited states, even if they cannot sell there.
  2. Allows states to maintain their own licensing programs with their own barriers to entry, as we do now.
  3. Removes the Drug Enforcement Administration as the primary law enforcement agency in favor of the Food and Drug Administration (FDA) and the Alcohol and Tobacco Tax and Trade Bureau (which would be renamed the Alcohol, Tobacco, and Cannabis Tax and Trade Bureau (“TBT”)) )). Treats cannabis regulations the same as alcohol and tobacco regulations (we saw some iteration of this in the fading States Reform Act).
  4. Implements an excise tax on cannabis products as follows:
    • For small and medium producers, the excise tax would start at 5% and gradually increase to a maximum of 12.5%.
      ○ For large cannabis businesses, the excise tax would start at 10% and gradually increase to a maximum rate of 25%.
  5. Establishes market competition rules to protect small independent operators.
  6. Implements strong anti-diversion rules, including a track and trace system, and adopts limits on the amount of retail purchases. The TTB, in coordination with the Secretary of Health and Human Services, will develop additional regulations around these areas.
  7. Requires the Department of Transportation to create a standard for cannabis-impaired driving within three years for states to adopt. Urges states to enact open cannabis container bans with guidance on best practices to be released no later than one year after the law is passed. A national standard of conduct can even be implemented despite what individual states decide here.
  8. Establishes a Center for Cannabis Products within the FDA to regulate the production, labeling, distribution, sales, and other manufacturing and retail elements of the cannabis industry for things like adulteration and bad branding.
  9. Directs the FDA to establish labeling standards for cannabis products, including potency, doses, servings, where made, and directions for use. Even cannabis-specific reminders are in the bill, and the Food Drug and Cosmetic Act will be amended to include cannabis.
  10. Establishes programs and funding to prevent youth cannabis use, including through media campaigns to educate the public about the effects of cannabis on health and society.
  11. Prohibits electronic cannabis product dispensing systems from containing added flavors. Electronic Cannabis Product Delivery System means an electronic device that delivers a cannabis product via an aerosol solution to the user inhaling from the vice of 24, and any component, liquid, part or accessory of such device , whether sold separately or not.
What about social equity?

CASLPA has perhaps the most comprehensive set of social equity guidelines we have seen in a federal bill. If the bill passes, it will use federal tax revenue to reinvest in “the communities and individuals most affected by the failed war on drugs,” providing them with legal aid, reintegration assistance , health education and much more.

CASLPA also establishes the Equitable Licensing Grant Program. This program would provide states, tribes, and localities with funds to implement licensing programs that minimize barriers to cannabis licensing and employment for those affected by the War on Crime. dope.

There will also be opportunities under the CAOA for loans and technical assistance to small businesses “owned and controlled by socially and economically disadvantaged people in states where cannabis is legal,” including a pilot program for ten years with loans from the Small Business Administration.

And just like some states and cities, not everyone can qualify here – it basically boils down to “eligible entities” and individuals, which are defined in the bill.

What is the long term perspective?

Overall, the CAOA is well thought out (it sure took a while!) and covers a lot of ground when it comes to issues in the cannabis industry. That said, Senate Democrats may never pass this behemoth of a bill. Parts of the CAOA may be launched to gauge what the Senate would support in a future tougher reform bill. In this case, legalization would come as a series of “pieces” of law, rather than the omnibus effort of the CAOA.

Over the next few weeks, we’ll be sure to analyze parts of the law that we believe are relevant to our readers, and we’ll certainly keep you posted on how it evolves in the Senate.

#Federal #Cannabis #Legislation #CAOA

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