Cato Institute: An Encouraging Development for the Cause of Cannabis Legalization

Here’s the Cato Institute’s thoughts on the GOP led bill in the House

Yesterday, U.S. Representative Nancy Mace (R‑S.C.) introduced the States Reform Act that would remove cannabis from the federal government’s list of controlled substances, expunge federal criminal records related to nonviolent cannabis offenses, prevent the Small Business Administration from discriminating against state‐​licensed cannabis businesses, and allow doctors practicing in the Veterans Affairs Health System to prescribe medicinal marijuana.

In those respects, the proposed legislation has much in common with a bill introduced in the U.S. Senate by Majority Leader Chuck Schumer (D‑NY) over the summer, and the Marijuana Opportunity Reinvestment and Expungement (M.O.R.E.) Act that was passed by the House of Representatives in December 2020. The latter garnered only a few Republican votes.

However, this bill, drafted with input and model language from Geoffrey Lawrence of Reason Foundation, locks in place a 3 percent federal excise tax on marijuana for 10 years. In contrast, the Schumer proposal features a 10 percent excise tax that grows to 25 percent in 5 years. The M.O.R.E. Act starts with a 5 percent excise tax increases it to 8 percent over 5 years.

The Mace bill distributes the revenue to existing entities while Schumer’s creates three new grant programs.

Another important distinction of Mace’s bill is that it grants the Food and Drug Administration the authority to regulate cannabis in the same way it regulates alcohol and “no more.” Therefore, the FDA may regulate labeling, prescribe serving sizes, and approve new drugs or medical uses derived from cannabis, but it “may not prohibit the use of cannabis or its derivatives in non‐​drug applications.”

In common with the two previous proposals, the bill defers to the individual states the right to determine the legal status of cannabis.

The regulatory features of the bill are simpler and sparser than the other two proposals. Thus the bill will hopefully gain more Republican support. Here is the “one‐​pager” of Rep. Mace’s bill.

Rep. Mace has drawn a “scathing rebuke” from the Chairman of the South Carolina Republican Party, Drew McKissick, who stated:

Our Party platform is clear: “We support firm enforcement of existing laws against the abuse and distribution of controlled substances, and we oppose any effort to legalize the use of controlled substances,” and that includes marijuana.

Of course, the proposed law would not force South Carolina to legalize cannabis.

Rep. Mace is showing leadership and courage by contributing to the noble effort of ending federal cannabis prohibition and respecting federalism despite pushback from her state’s GOP leadership.


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