Federal Marijuana Reform Could Be Just Around the Corner

Federal Marijuana Reform Could Be Just Around the Corner

Article by Justin Wheeler

On March 30, 2017, U.S. lawmakers announced the “Path to Marijuana Reform,” a package of three bills aimed at regulating marijuana more like alcohol and tobacco as opposed to heroin. Issues such as taxation, descheduling, banking, civil forfeiture, decriminalization, research and regulation are addressed in an attempt to eliminate the confusing and dangerous overlapping of marijuana laws that currently exists.  The bills were introduced by Senator Ron Wyden and Congressman Earl Blumenauer (both from Oregon). The Executive Summary of the Path to Marijuana Reform provides a brief introduction to the three bills which is restated verbatim below. 

Small Business Tax Equity Act. This legislation would repeal the tax penalty that singles out state-legal marijuana businesses and bars them from claiming deductions and tax credits.

Responsibly Addressing the Marijuana Policy Gap Act. This legislation would reduce the gap between Federal and State law by removing federal criminal penalties and civil asset forfeiture for individuals and businesses acting in compliance with state law. It would also reduce barriers for state-legal marijuana businesses by ensuring access to banking, bankruptcy protection, marijuana research, and advertising. It would protect individual marijuana consumers in states that have legalized marijuana, by providing an expungement process for certain marijuana violations, ensuring access to public housing and federal financial aid for higher education, and ensuring that a person cannot be deported or denied entry to the U.S. solely for consuming marijuana in compliance with state law. Finally, it would remove unfair burdens by ensuring veterans have access to state-legal medical marijuana and protecting Native American tribes from punishment under federal marijuana laws.

Marijuana Revenue and Regulation Act. This legislation would responsibly deschedule, tax, and regulate marijuana. It would impose an excise tax on marijuana products similar to current federal excise taxes on alcohol and tobacco, escalating annually to a top rate equal to 25 percent of the sales price. Marijuana producers, importers and wholesalers would be required to obtain a permit from the Department of Treasury, and the marijuana industry would be regulated in a manner similar to alcohol. Strict rules would prohibit sale or distribution of marijuana in states where it is illegal under state law.

Currently, the Path to Marijuana Reform bills have bi-partisan support in Congress. But even if the bills can make it to the President’s desk (and that is a big if), a veto may be waiting for them.  To date, the President has displayed a fractured view on marijuana law enforcement when it comes to recreational versus medical use. While the Path to Marijuana Reform bills are certainly cause for optimism, a cautious approach should be taken given the current political climate.  

The Path to Marijuana Reform is good news for Michigan businesses looking to enter the medical marijuana industry, but the bills do not provide relief from strict compliance at the state level.  The purpose of these bills is to let states decide whether to legalize, and how to regulate, marijuana. As a result, Michigan medical marijuana businesses need to continue to ensure consistent state law compliance and stay up to date on the ever-evolving marijuana laws by keeping an experienced marijuana law attorney on retainer at all times.

Posted on April 12, 2017
Tagged as Business Law, Tax Law