When Vermont independent US Sen. Bernie Sanders signed on as a co-sponsor of the Marijuana Justice Act on April 19, 2018, the announcement was just one of a number of positive indicators in a heady week for legal cannabis in the US.
The bill, introduced in 2017 by New Jersey Democratic US Sen. Cory Booker, would remove cannabis from the Controlled Substances Act.
Sanders joins New York Democratic US Senator Kirsten Gillibrand in sponsoring the legislation. Both are thought to be potential 2020 presidential candidates.
There were also indications last week that a few Republicans are switching their stance on legalizing cannabis. President Donald Trump seemed to indicate he’ll respect the rights of states that have legalized marijuana. Additionally, Republicans such as California Rep. Dana Rohrabacher, who sponsored the Respect State Marijuana Laws Act, and former House Speaker John A. Boehner of Ohio, joined other prominent party members who’ve recently changed their attitude toward the issue.
It all seems to bode well for the proposed act, which suggests several steps to decriminalize cannabis at the state and federal levels, including removing cannabis from the 1970 Controlled Substances Act, and withholding federal funding from states that continue to criminalize marijuana. The act also creates funding that could be used to invest in low-income communities.
Marijuana.com talked to attorney Rachel Gillette, who focuses her practice on cannabis business licensing and regulatory compliance for Greenspoon Marder, a law firm with offices in nine US states, to give her perspective on the proposed legislation.
Q: What would be the most immediate effects of the Marijuana Justice Act if it passed?
A: Removing it from the Controlled Substances Act would be big news and would impact states greatly. The industry itself exists in a very tenuous position. It’s a multi-billion-dollar industry that could literally be shut down at any time by the federal government. There are over 112,000 jobs that are created by this industry. To put this in perspective, the coal industry is roughly half that.
Q: We’ve seen some Republicans as of late change their stance on recreational marijuana, so what are the chances this thing has legs?
A: I think it’s very good news and I’m very optimistic that some Republicans are willing to educate themselves on this issue change their perspective. I think that’s great. The greater support from both parties, the more likely it is to pass. … I’m glad we’re seeing this type of legislation being proposed.
Q: Can you highlight any legal issues presented by the Act?
A: Removing marijuana from the Controlled Substances Act would get rid of 280e [the section of the Internal Revenue Code that forbids businesses from deducting expenses associated with the “trafficking” of Schedule I or II substances], in essence, for these marijuana businesses. That would be a substantial legal impact. I think if we’re going to address and expunge federal convictions for marijuana, that would be huge difference and allow states to do the same. People’s lives have been dramatically impacted by a mere possession charge for a joint in some states. I think that can right some pretty severe wrongs that have gone on over the last 40 years on this war on drugs. Allowing people to be free if they’re in prison for a marijuana conviction would be huge.
Q: Marijuana businesses in states where it’s legal have been operating under a cloud of uncertainty for some time. Does this do anything to embolden businesses that have been on the fence about going full in? Do you think we’ll see more investing in recreational marijuana businesses take place following the introduction of this Act?
A: Absolutely. I think we’ll see more investing. Even though it’s been around for a while, and I’ve been practicing in this area of law since 2010 and people have been running marijuana businesses before that, it’s still a relatively nascent industry. Because of the federal illegality, states have restricted or are putting some very hefty burdens on those who own these businesses or those who want to invest in these businesses. It’s going to open up many doors from an investment perspective. There’s a lot of funds, there’s a lot people, there’s a lot of lenders who really won’t get involved in this industry simply because it remains federally illegal. I would be very excited to see more investments, better investments, coming into this industry, and more funding opportunities. Marijuana businesses could go walk into a bank and get a loan. Wouldn’t it be great if they could get a small business loan and have an actual banking relationship?
Q: How does the federal illegality of cannabis and the federal conflict with state law undermine state regulatory schemes?
A: It undermines them greatly. You have these states that have been trying to convince people who have been operating under a black market, an illegal market, to come out of prohibition. And the federal government just hiding their head in the sand. It causes, first of all, a sense of distrust of the federal government, and the DEA in particular, because it’s all propaganda. And second of all, it incentivizes people to remain in the black market because they can’t fully operate without risk in the federal market, so it does undermine what states are trying to do in creating a transparent market, making laws that protect consumers.
All of these are things that help consumers and are good for communities, to not have that street corner drug dealer not asking for an ID and selling drugs to your kids. The federal government’s prohibition of cannabis basically keeps that black market alive and it’s unnecessarily so, because the evidence is out there. And if they wanted to know it, they could know it.
The war on drugs has failed. Marijuana compared to other substances is relatively safe, and what states like Colorado have proven over the years is it can be regulated in a safe manner and adults will make good choices from a consumer perspective.