Pot stocks soar on latest U.S. legalization rumors
Senate Democrats introduced a bill Thursday that would federally decriminalize, regulate and impose taxes on cannabis products.
Majority Leader Chuck Schumer and Senators Cory Booker of New Jersey and Ron Wyden of Oregon, the sponsors, revised the measure, which faces significant obstacles in the chamber, after circulating a draft version last year and receiving feedback from Senate committees.
Schumer said Thursday that views on legalizing cannabis have changed dramatically and about 90 per cent of Americans live in a state that has legalized it.
“It is time that Congress catches up with the rest of the country,” he said on the floor.
The Cannabis Administration and Opportunity Act would remove marijuana from the list of drugs covered by the Controlled Substances Act and eliminate federal prohibitions in states that have legalized it for individuals age 21 and older. However, states would retain control over whether production and distribution are allowed.
A total of 37 states, three territories and the District of Columbia have authorized the use of marijuana for medicinal purposes. And 19 states, two territories and the District of Columbia have approved it for recreational use. The bill would establish programs and funding to prevent cannabis use by children and adults younger than 21.
Marijuana stocks had rallied since disclosure that the senators planned to introduce their bill, but they slumped Thursday as analysts cast doubt over the bill’s prospects.
“We see little chance that this bill moves forward as is,” Tobin Marcus at Evercore ISI said. “It does not have unified support from Senate Democrats, and Republican leadership does not want a vote on it.”
The bill would create a Center for Cannabis Products within the Food and Drug Administration to regulate production, distribution and retail sales. The FDA also would be directed to establish labeling standards, such as for potency.
An excise tax for small and mid-sized producers beginning at 5 per cent would be imposed on cannabis products and gradually increase to 12.5 per cent. The tax would begin at 10 per cent for larger businesses and increase to 25 per cent.
The tax revenue would be used to finance an Opportunity Trust Fund to invest in communities and individuals most harmed by law enforcement campaigns against drugs. Other grants and programs would be established to further support individuals affected and cannabis businesses.
“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,” Booker said in a statement.
Despite comparable use rates, African Americans are more than 3.6 times more likely than White people to be arrested for marijuana possession, according to a 2020 report by the American Civil Liberties Union. That disparity obtains in every state.
The legislation faces an uphill battle to reach the 60 votes needed for passage in the evenly divided Senate. Many Republicans and even some Democrats, including Jeanne Shaheen of New Hampshire and Jon Tester of Montana, have previously expressed opposition to federal decriminalization.
The House voted to pass a different measure in April that would decriminalize marijuana, expunge federal criminal convictions and impose taxes on cannabis producers and importers.