Senator Schumer introduces bill to effectively decriminalize cannabis federally

July 15, 2018

Cannabis Alert

Author(s): Lori B. Green, Rudy S. Salo, Robert Fisher

This alert was co-authored by Larry Blocho.

Senate Minority Leader Charles Schumer recently introduced the Marijuana Freedom and Opportunity Act which, if signed in to law, would effectively decriminalize cannabis federally. This alert discusses details of the bill that may be of interest to businesses, investors and entrepreneurs, as well as state and local governments.

On June 27, Senate Minority Leader Charles Schumer (D-NY) introduced a bill entitled the “Marijuana Freedom and Opportunity Act (MFOA)” (S. 3174) in the United States Senate. If signed into law, the MFOA will remove cannabis as a controlled substance under the Controlled Substances Act (CSA) and effectively decriminalize cannabis federally. Additionally, the MFOA would create federal authority to regulate cannabis advertising, just as the federal government presently regulates both alcohol and tobacco advertising. The MFOA also would impose an excise tax on cannabis, a percentage of which would be used to fund the Small Business Administration’s Microloan Program to support women and minority entrepreneurs attempting to break into the cannabis industry. Finally, the MFOA would authorize $750M in funding over five years for highway safety and public health research related to cannabis.

With the removal of cannabis from the list of substances controlled under the CSA, states would have the flexibility to decide whether and to what extent to legalize cannabis use within their borders. Moreover, the MFOA provides that the federal government retains the authority to police cannabis trafficking among the states, further protecting the rights of states which have not legalized cannabis use. State and local governments would also have access to funding, $100M over five years, to create expungement or sealing programs for people previously convicted for cannabis possession prior to recreational cannabis use being decriminalized federally.

The MFOA is now the second bill introduced within the last month seeking to allow states to decide for themselves―consistent with the Tenth Amendment to the Constitution―whether to legalize recreational cannabis use. Senators Gardner (R-CO) and Warren (D-MA) introduced a similar bill earlier in June. At the time, President Trump indicated that he would support a bipartisan effort to address this issue. Senator Schumer is “hopeful that the balanced approach [the MFOA] takes can earn bipartisan support in Congress and across the country.” Currently, the MFOA is before the Senate Judiciary Committee and does not have a counterpart in the House of Representatives.

Nixon Peabody will continue to monitor Senator Schumer’s bill and provide subsequent alerts as developments in the cannabis industry continue.

The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.

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