We typically think of cannabis as a liberal political issue, as historically we have seen a push from Democrats in support of cannabis use, with seventeen blue states now legalizing recreational and medicinal cannabis use. However, over 70 percent of Americans support cannabis use—including nearly half of the Republican voters. What’s even more surprising is while only a couple of red states currently have legalized recreational and medicinal cannabis use, a growing number of Republican senators and representatives are beginning to rally behind cannabis legislation. Some of these elected officials have also been medical cannabis patients.
Of the twenty states that have legalized the use of medical but not adult-use cannabis, thirteen of them are red states. Far from the days of “Reefer Madness,” Republicans are starting to introduce cannabis legislation with a desire to keep the federal government from creating an overly-burdensome tax structure or over-regulated products. Potentially, this could reduce the barrier to entry, as well as give legal businesses the opportunity to thrive—not just live month to month hoping to survive.
Bryan Buckley of Helmand Valley Growers Company, who has been working with Congress on both sides of the aisle, says Senator Chuck Schumer’s (D-NY) recently released plans will further cripple the cannabis industry and help the illicit market thrive. According to Buckley, Schumer’s recent bill, the Cannabis Administration and Opportunity Act (CAOA), is committing the same mistakes California did when Prop 64 was implemented—heavy federal taxation with new regulation. The bill proposes a 10-percent federal tax that will grow into a 25-percent federal tax over the course of five years. That tax will then be imposed on state and local taxes, which are already incredibly high. In California, consumers are paying a 40-to-60-percent tax on their cannabis products depending on where they live. Los Angeles consumers pay a 15-percent state excise tax, a 10-percent local business tax, and a 9.5-percent state and local sales tax for a combined total of a 45-percent tax. Now, think about the implications of adding another 10 percent that will slowly mature into 25 percent.
With extra costs coming in that high, it is estimated that two-thirds of all cannabis sales in California come from the illicit market. That could get worse if Schumer’s bill is passed. The CAOA implements even more regulations including: calling on the Food and Drug Administration (FDA) to register cannabis business, set product standards, establish label requirements, police “adulterated” and “misbranded” products, regulate advertising and promotion, and impose “restrictions on sale and distribution.” This bill also calls on the FDA to impose any restrictions it deems “appropriate for the protection of the public health.” Many manufacturers believe this bill will do nothing more than destroy the legal cannabis market and allow the illicit market to dominate market share. If we’re hoping for the Democrats to lead the way in regards to federal legalization, the new even stricter regulations might not be the route.
Meanwhile, members of the GOP are beginning to push the envelope for their own legislation. People like Sen. David Joyce (R-OH), the Co-Chair of the Bipartisan Congressional Cannabis Caucus, and States Reform Act author Rep. Nancy Mace (R-SC), who was formerly a medical cannabis patient, are working to harmonize federal laws with state-level rules and regulations. According to HVGC’s Bryan Buckley, “Republicans are introducing common-sense legislation that will not only allow the legal cannabis industry to grow but thrive. Representative Nancy Mace’s State Reform Act is an example of that.” The States Reform Act, a GOP-introduced bill aimed at decriminalizing cannabis, looks to implement a ten-year moratorium on a 3-percent tax to ensure competitive footing in the market, and requires the SBA to treat cannabis businesses like alcohol or similar businesses and not illegal entities. Recently, Missouri lawmakers proposed a bill that would allow adults twenty-one and over to possess, consume, and cultivate cannabis, as well as allowing those convicted of nonviolent cannabis crimes to petition to expunge their records and/or be released from prison.
The GOP and Democrats seemingly come together in acknowledging the medical benefits of the plant and perhaps even the failure of the War on Drugs. Both parties are pushing to deschedule cannabis, which would change the game for medical research in a positive way. By descheduling the plant, it will allow for more efficient access to research the benefits of cannabis, would essentially kill Tax Code 208e, and be a cost-saver for legal cannabis organizations. Tax Code 208e currently labels cannabis as a Schedule I Substance—meaning that legal businesses are not able to deduct otherwise ordinary business expenses from gross income associated with the trafficking of Schedule I or II substances. Though it primarily affects retailers, plenty of businesses within the cannabis industry are affected, in some form or another.
Descheduling the plant would also be beneficial when it comes to incarceration. From 2001 to 2010, there were 8.2 million cannabis arrests, 88 percent of those for mere possession. While both parties have come up with different bills and policies to aid those who are incarcerated, descheduling cannabis could help lead to the discussion of social equity programs, aiding communities heavily affected by decades of “Reefer Madness,” and help prevent further incarceration in our prison system that is already at its limits.
Midterms are approaching quickly and the discussion of some type of reform is more prevalent in multiple states. While both parties have ideas as to how to approach cannabis reform, it is unexpected to see the Democrats start to backslide on their ideas and leave room for the GOP to step in with ideas for more lax regulations. At the very least, the rise in GOP support for cannabis is proof we have moved into a society that no longer views it in the same way we did forty years ago. While surprising that it is now the GOP making the push, it only makes sense that the government moves forward with the times and works to decriminalize cannabis sooner rather than later. There is a race between both parties to try to pass some form of legislation by the midterms. It is only a matter of time before we see which party emerges as the victor and passes the bills that will help legalize and deschedule cannabis.
