Senators Propose Cannabis Descheduling Plan: Five Takeaways for The Cannabis Industry

Last week, Senators Schumer (D-NY), Booker (D-NJ), and Wyden (D-OR) circulated a discussion draft of the Cannabis Administration and Opportunity Act, a legislative proposal to deschedule and legalize cannabis.  In related statements to the Senate, Senator Schumer emphasized that cannabis legislation will be prioritized during this Congress, stating “it’s time to end the federal prohibition on marijuana [a]nd as majority leader, I am going to push this issue forward and make it a priority.”

While there is much to explore in the bill’s 163 pages, here are five immediate takeaways for the cannabis industry.

  • Discussion Draft: The Senators took the unusual step of publicly circulating this discussion draft of legislation before the proposed bill is formally introduced in the Senate, and the Senators’ offices are accepting public comments on the proposal until September 1, 2021. The legislative proposal is meant to promote discussion among stakeholders that will help inform the Senators’ offices as they craft a final bill. This is good news because it is the first time that the cannabis industry will have had an opportunity to comment on cannabis legislation, and the industry will be working hard to identify gaps in the coming weeks.
  • Timing: Given that the Senators are accepting comments until September 2021 and will need time to consider comments received, it may be several months before this proposal is finalized. For now, the Senators have requested comments from stakeholders and members of the public, including social and criminal justice advocates, industry stakeholders, members of the public health and law enforcement communities, members of Congress, federal officials, state and local officials. While the likelihood of passage is slim in the short-term, this is an important mile-marker and thoughtful comments will be critical as the industry takes steps to influence public policy.
  • CBD: Section 505 of the Senators’ proposal permits CBD as a dietary supplement. Specifically, the draft proposal removes the prohibition on marketing CBD as a dietary supplement, but also deems such dietary supplements adulterated if they contain a level of CBD that exceeds a government-set daily recommended serving. That per serving limit of CBD is not specified and will be set by the FDA. The proposal also grants FDA the ability to require safety-related labeling or packaging requirements if needed and give FDA the ability to take enforcement action against any noncompliant CBD-containing products that is inappropriately labeled as a dietary supplement.
  • Gaps: There are some issues with the legislation, including a 25% federal tax rate, a lack of operational clarity around the role of state regulators, and the lack of a transition period prior to allowing interstate commerce to protect public health and safety, burgeoning social equity programs, and American jobs.
  • MORE Act: The Senators’ proposal addresses themes of social equity, criminal justice, and taxation reforms related to cannabis, among other topics. While many of these themes overlap with the MORE Act that was recently re-introduced in the House, the two legislative proposals have significant differences that would need to be addressed as the proposals move through the legislative process.

Perkins Coie’s Cannabis Industry Group is digesting the Senators’ proposal, especially as it relates to the House’s recently-reintroduced and updated MORE Act. With the CEO of Leafy, Perkins Coie attorneys recently authored a call for increased clarity in federal cannabis legislation over at Law360. The Cannabis Industry Group continues to monitor further federal and state legislative developments affecting the cannabis industry.

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