Senate Democrats set to unveil plan to legalise cannabis across the US

The bill goes beyond just legalising cannabis and includes measures like taxation at a federal level

Namita Singh
Wednesday 14 July 2021 09:38 BST
File: Cannabis on display at a dispensary in Los Angeles, California on 27 December 2017
File: Cannabis on display at a dispensary in Los Angeles, California on 27 December 2017 (AFP via Getty Images)

A discussion draft of a bill that aims to legalise cannabis across the US, developed by top Democrat leaders, is set to be unveiled by them at a press conference on Wednesday.

US Senate majority leader Chuck Schumer, finance chairman Ron Wyden and new Jersey Senator Cory Booker plan to unveil the draft, according to Bloomberg.

People familiar with the development told Bloomberg that the Cannabis Administration and Opportunity Act aims to remove cannabis from the federal list of controlled substances.

The bill also aims to go beyond just legalising the substance, according to the report, as it could tax and regulate cannabis at a federal level. States, however, will have the freedom to enforce their own laws regarding sale and purchase.

The three Democrat senators had called for “ending the federal marijuana prohibition” and promised a “comprehensive cannabis reform legislation”, in early February this year.

“The ‘War on Drugs’ has been a war on people — particularly people of colour,” the senators said in the statement.

They argued that “ending the federal marijuana prohibition is necessary to right the wrongs of this failed war and end decades of harm inflicted on communities of colour across the country.”

Continued enforcement of cannabis prohibition laws resulted in over 600,000 arrests in 2017, according to a 2019 report by Human Rights Watch.

The arrests disproportionately affect people of colour as they are “almost four times as likely to be arrested for marijuana possession as their white counterparts, even though the rates of marijuana use have remained equal across races,” said the report.

The bill is expected to tackle this disproportionate targeting and regulate the drug from a health and safety perspective.

It may also include provisions that could encourage banks to work with cannabis companies and assist them in basic requirements like bank loans and accounts.

The draft bill is also expected to clear another hurdle that has reportedly curbed the profitability of companies.

The removal of section 280E, a tax code that prevents businesses dealing with Schedule I or Schedule II controlled substances from claiming standard business deductions, is expected. Schedule I or Schedule II controlled substances include heroin, LSD, cannabis, cocaine, amphetamines and other drugs.

Currently, cannabis companies pay an effective tax rate of anything between 60 to 100 per cent on profit, according to Forbes.

The bill is, however, expected to receive challenges from within the party, according to earlier reports.

Speaking to Politico earlier in April, two Democrats – Senators Jeanne Shaheen and Jon Tester – voiced their opposition against the removal of federal penalties on cannabis. The bill will need 60 votes to stand in the senate.

Recreational use of cannabis is legal in 17 states as of now, with medical use after approval from doctors legal in 36 states.

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