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The legal cannabis industry received an added boost today in Congress when Senate Majority Leader Chuck Schumer (D-NY), Finance Committee Chair Ron Wyden (D-OR) and Senator Cory Booker (D-NJ) introduced a bill, which if passed, would provide sweeping cannabis policy reforms across the nation.

The legislation, known as the Cannabis Adminstration and Opportunity Act, would deschedule and decriminalize cannabis by removing it from the federal Controlled Substances Act. It would also shift regulatory responsibility from the Drug Enforcement Administration to the Alcohol and Tobacco Tax and Trade Bureau, the Food and Drug Administration and other agencies. Further, the measure would also allow the state-regulated medical and adult-use cannabis industries already in place to operate without federal interference.

However, not every provision in this bill is so rosy. On top of the already hefty state taxes imposed on the industry, the bill would also institute a federal excise tax of 5 to 25% on cannabis. Obviously, this would be problematic for small cannabis businesses.

Yet industry leaders are hailing the measure for what it’s attempting to do, which is “to bring federal law into harmony with the states and the vast majority of voters who have called for an end to prohibition,” said Aaron Smith, co-founder and CEO of the National Cannabis Industry Association, a cannabis trade group, in a statement. “We look forward to working with Senators on both sides of the aisle to improve the tax provisions in this bill on behalf of small cannabis businesses and eventually pass it into law.”

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The CAOA Act was introduced after a draft circulated last year. Based upon feedback provided by NCIA and other advocacy organizations, a number of changes to the legislation were made. Now the bill includes the following:

*Changes to the weight quantity to qualify a person for felony cannabis distribution or possession charge under the section from 10 pounds to 20 pounds;

*Provides that a court shall automatically, after a sentencing review, expunge each federal cannabis conviction, vacate any remaining sentence, and resentence the defendant as if this law had been in place prior to the original sentencing; and,

*Removes the requirement to maintain a bond for any cannabis business that had less than $100,000 in excise tax liability in the prior year and reasonably expects excise tax liability in the current year to be below such amount.

In the meantime, The SAFE Banking Act, which would allow banks to work with legal cannabis businesses without prosecution, has still not be brought up for a vote in the Senate chamber, despite being approved the House of Representatives seven times and enjoying bipartisan support.

Currently, medical marijuana is legal in 37 states while the adult-use market is legal in 19 states as well as D.C.

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