Five Democratic Senators introduced the long-awaited Cannabis Administration and Opportunity Act on July 21. Here's the press release:
Senate Majority Leader Chuck Schumer, (D-NY), U.S. Senator Cory Booker (D-NJ) and Senate Finance Committee Chair Ron Wyden, (D-OR) today introduced the Cannabis Administration and Opportunity Act (CAOA), comprehensive legislation that would end the harmful and out-of-touch federal prohibition on cannabis by removing cannabis from the federal list of controlled substances and empowering states to implement their own cannabis laws. HELP Committee Chair Patty Murray (D-WA) and HSGAC Committee Chairman Gary Peters (D-MI) also co-sponsored the legislation.
The legislation establishes a federal regulatory framework to protect public health and safety, prioritizes restorative and economic justice to help undo the decades of harm caused by the failed War on Drugs, ends discrimination in the provision of federal benefits on the basis of cannabis use, provides major investments for cannabis research and strengthens worker protections. By decriminalizing cannabis at the federal level, the CAOA also ensures that state-legal cannabis businesses or those in adjacent industries will no longer be denied access to bank accounts or financial services simply because of their ties to cannabis.
The CAOA was first released as a discussion draft last year, alongside a request for comments from stakeholders. After receiving more than 1,800 comments and working with various Senate committees, the senators refined and expanded on the discussion draft proposal, which they are formally introducing today. A full summary of the revisions to the CAOA discussion draft can be found HERE.
Sen. Patty Murray: "This legislation is about justice, strengthening our economy, and bringing the federal government into the 21st century."
“For far too long, the federal prohibition on cannabis and the War on Drugs has been a war on people, and particularly people of color,” said Leader Schumer. “The Cannabis Administration and Opportunity Act will be a catalyst for change by removing cannabis from the federal list of controlled substances, protecting public health and safety, and expunging the criminal records of those with low-level cannabis offenses, providing millions with a new lease on life. A majority of Americans now support legalizing cannabis, and Congress must act by working to end decades of over-criminalization. It is time to end the federal prohibition on cannabis.”
“As more states legalize cannabis and work towards reversing the many injustices the failed War on Drugs levied against Black, Brown, and low-income people, the federal government continues to lag woefully behind,” said Sen. Booker. “With strong restorative justice provisions for communities impacted by the drug war, support for small cannabis businesses, and expungement of federal cannabis offenses, this bill reflects long overdue, common sense drug policy. I am proud to have partnered with Senators Schumer and Wyden to introduce this critical legislation. The support that we have received from committee chairs and outside groups underscores the historic nature of this bill and the urgent need for Congress to pass it.”
"It's no longer a question of 'if cannabis should be legal.' The states are moving ahead, and not only do the overwhelming majority of American people support legalization, they now live in a state where some form of cannabis is legal," said Sen. Wyden. "I'd ask my colleagues in the Senate to think long and hard about what keeping the federal government stuck in yesteryear means for public health and safety. By failing to act, the federal government is empowering the illicit cannabis market, it's ruining lives and propping up deeply rooted racism in our criminal justice system, it's holding back small cannabis businesses from growing and creating jobs in their communities. Cannabis legalization is here, and Congress needs to get with the program."
“It is long past time the federal government catches up to Washington state when it comes to cannabis laws,” said Sen. Murray. “This legislation is about justice, strengthening our economy, and bringing the federal government into the 21st century. This legislation will undo deeply unfair and racially unjust laws that have disproportionately harmed mostly people of color -that’s hugely important. This bill will also strengthen our economy by finally recognizing the cannabis industry and modernizing federal regulations. I’m committed to making sure this legislation works for Washington state—where we have led the nation on common sense cannabis laws.”
“This legislation makes important changes to bring federal cannabis policy in line with where the majority of the country already is - and in line with what Michiganders have already voted for,” said Sen. Peters. “By legalizing cannabis at the federal level, we can protect public health and safety, support cannabis businesses as they continue to grow, create jobs, and seek safe, reliable access to banking services, and right past wrongs for many Americans – particularly people of color – who have been unduly punished for minor, non-violent cannabis offenses.”
Senate Majority Leader Chuck Schumer: "A majority of Americans now support legalizing cannabis, and Congress must act by working to end decades of over-criminalization."
The Cannabis Administration and Opportunity Act:
• Protects public health by establishing strong cannabis health and safety standards under the U.S. Food and Drug Administration, mandating that states keep cannabis out of the hands of those under 21, ensuring cannabis producers are licensed and that their products are consistently labeled, and requiring the U.S. Department of Veterans Affairs (VA) and Indian Health Service (IHS) to provide recommendations and opinions regarding the medical use of cannabis by VA and IHS patients.
• Protects public safety by implementing robust anti-diversion rules, including a track-and-trace system, adopting quantitative limitations on retail purchases to combat illicit market cannabis production and distribution, establishing grants to assist small law enforcement agencies in hiring and training officers, and establishing a new effort at the National Highway Traffic Safety Administration to combat drugged driving and multi-substance impairment.
• Prioritizes restorative and economic justice by automatically expunging federal cannabis convictions and encouraging states to do the same, breaking down barriers to the cannabis industry and expanding access to loans and capital for entrepreneurs harmed by the failed War on Drugs, and ending discrimination in provision of federal benefits - like federal housing or federal student loans - on the basis of cannabis use.
• Regulates and taxes cannabis by transferring federal jurisdiction over cannabis from the Drug Enforcement Agency to the FDA and the Alcohol and Tobacco Tax and Trade Bureau (TTB) within the Treasury Department, and implementing a regulatory regime similar to alcohol and tobacco, while recognizing the unique nature of cannabis products. It also eliminates the tax code’s restriction on cannabis businesses claiming deductions for businesses expenses and implements an excise tax on cannabis products.
• Encourages cannabis research by requiring more federal research into impacts of cannabis on health and public safety, establishing clinical trials through the VA to study the effects of medical cannabis on the health outcomes of veterans, compiling industry-related data and trends, and establishing grants to build up cannabis research capacity at institutions of higher education, with particular focus on minority-serving institutions and Historically Black Colleges and Universities.
• Strengthens workers' rights by removing unnecessary federal employee pre-employment and random drug testing for cannabis, while preserving appropriate drug testing for certain sensitive categories of employees where continued testing is determined necessary, including national security, law enforcement, and commercial transportation; and ensuring worker protections for those employed in the cannabis industry.
Bill text can be found HERE.
Summary of introduced CAOA can be found HERE.
Summary of revisions to the CAOA discussion draft can be found HERE.
● Establishes a Center for Cannabis Products within FDA to regulate the production, labeling, distribution, sales and other manufacturing and retail elements of the cannabis industry.
● Instructs FDA to establish standards for labeling of cannabis products, including potency, doses, servings, place of manufacture and directions for use. Establishes programs and funding to prevent youth cannabis use, including through media campaigns.
● Prohibits electronic cannabis product delivery systems from containing added flavors. ● Funds state programs to prevent youth use and cannabis-impaired driving, including enforcement, education and data collection.
● Increases funding for comprehensive opioid, stimulant and substance use disorder treatment.
● Requires the Veterans Administration (VA) and Indian Health Service (IHS) to provide recommendations and opinions regarding the medical use of cannabis by VA and IHS patients.
● Removes cannabis from the Controlled Substances Act and eliminates federal prohibitions in states that have chosen to legalize medical cannabis, or adult-use cannabis for people aged 21 and up.
● Retains federal prohibitions on trafficking of cannabis in violation of state law, or in states that have not legalized cannabis.
● Implements robust anti-diversion rules, including a track-and-trace system, and adopts quantitative limitations on retail purchases.
● Establishes a grant program through the Department of Justice to assist small law enforcement departments in hiring officers, investigators and community outreach specialists to combat black market cannabis production and distribution.
● Requires the Department of Transportation create a standard for cannabis-impaired driving within three years to be adopted by states.
● Directs the National Highway Traffic Safety Administration (NHTSA) to collect data on the number of cannabis-impaired drivers through a national roadside survey, and conduct further research into how cannabis use and multi-substance impairment affects drivers.
● Directs NHTSA to create educational materials on “best practices” for preventing cannabis-impaired driving that can be distributed to states.
● Directs NHTSA to carry out media campaigns intended to prevent cannabis-impaired driving, including a campaign specifically targeted at drivers under the age of 21.
● Incentivizes states to adopt cannabis open container prohibitions.
Regulation and Taxation
● Transfers federal jurisdiction over cannabis from the Drug Enforcement Agency to the Food and Drug Administration (FDA) and the Alcohol and Tobacco Tax and Trade Bureau (TTB) within the Treasury Department, and implements a regulatory regime similar to alcohol and tobacco, while recognizing the unique nature of cannabis products.
● Eliminates the tax code’s restriction on cannabis businesses claiming deductions for businesses expenses, and implements an excise tax on cannabis products:
○ For small and mid-sized producers, the excise tax would begin at 5 percent and gradually increase to a maximum of 12.5 percent.
○ For larger cannabis businesses, the excise tax would begin at 10 percent and gradually increase to a maximum rate of 25 percent.
● Establishes market competition rules meant to protect independent producers, wholesalers, and retailers and prevent anti-competitive behavior.
● Ensures regulatory bodies and law enforcement have the resources and tools they need to protect the integrity of the legal cannabis marketplace.
● Requires the Government Accountability Office (GAO) to study and report on metrics that may be impacted by cannabis legalization, including traffic-related deaths and injuries, hospitalizations and poison control center calls, violent crime rates, employment statistics, rates of cannabis use and various other criteria.
● Requires HHS and National Institutes of Health (NIH) to conduct or support research on the impacts of cannabis, including its effects on the human brain, the impact on various health conditions, and identification of potential medical benefits and uses of cannabis.
● Requires the Veterans Administration (VA) to carry out a series of clinical trials studying the effects of medical cannabis on the health outcomes of veterans diagnosed with chronic pain and post-traumatic stress disorder, including long-term observational studies.
● Requires the Bureau of Labor Statistics to regularly compile and publicize data on the demographics of business owners and employees in the cannabis industry.
● Directs HHS to increase the diversity and availability of cannabis products for research purposes.
● Establishes grants to build up cannabis research capacity at institutions of higher education, with particular focus on minority-serving institutions and Historically Black Colleges and Universities.
● Expands programs to increase the supply of cannabis available for research purposes.
Entrepreneurship and Restorative Justice
● Uses federal tax revenue to fund an Opportunity Trust Fund to reinvest in communities and individuals most harmed by the failed War on Drugs.
● Establishes a Cannabis Justice Office at the Department of Justice’s Office of Justice Programs, to administer the Community Reinvestment Grant Program.
● Establishes the Community Reinvestment Grant Program to award grants to community based organizations in order to serve individuals harmed by the failed War on Drugs, including job training, reentry services, legal aid, literacy programs, youth mentoring and health education.
● Establishes the Equitable Licensing Grant Program to provide states, tribes or localities funding to implement licensing programs that minimize barriers to cannabis licensing and employment for individuals adversely impacted by the War on Drugs.
● Establishes the Cannabis Restorative Opportunity Program to provide loans and technical assistance to small businesses owned and controlled by socially- and economically disadvantaged individuals in cannabis-legal states.
● Establishes a 10-year pilot program for intermediary lending from the Small Business Administration (SBA), in which SBA would make direct loans to eligible intermediaries that in turn make small business loans to startups, businesses owned by individuals adversely impacted by the War on Drugs, and socially and economically disadvantaged small businesses.
● Establishes expedited FDA review of drugs containing cannabis manufactured by small businesses owned by socially and economically disadvantaged individuals.
● Provides grants to Community Development Financial Institutions and invests in minority depository institutions to expand lending and investment in low- and moderate income areas, especially those harmed by the failed War on Drugs.
● Directs the Secretary of Housing and Urban Development to establish a grant program to provide communities whose residents have been disproportionately affected by the War on Drugs with additional funding to address the housing, economic, and community development needs of such residents.
● Initiates automatic expungement of federal non-violent cannabis offenses and allows an individual currently serving time in federal prison for a nonviolent cannabis offense to petition a court for resentencing.
● Disallows the denial of any benefits or protections under immigration law to any noncitizen based on their use or possession of cannabis.
● Prevents discrimination in the provision of federal benefits against people who use cannabis.
● Removes unnecessary federal employee pre-employment and random drug testing for cannabis, while preserving appropriate drug testing for certain sensitive categories of employees where continued testing is determined necessary, including national security, law enforcement, and commercial transportation.
● Reduces barriers to employment at banks or credit unions based on past minor criminal offenses, including criminal offenses that have been expunged, sealed, or dismissed.
● Ensures worker protections for those employed in the cannabis industry by strengthening requirements that permitted cannabis businesses comply with the National Labor Relations Act, the Fair Labor Standards Act and the Occupational Safety and Health Act.
● Establishes grants for community-based education, outreach and enforcement of workers’ rights in the cannabis industry, and requires the National Institute of Occupational Safety and Health to study how legalization of cannabis impacts the health and safety of workers.