Despite delay, MJ legislation in Congress worth watching for hemp entrepreneurs
The delay of a U.S. House vote to make all cannabis legal regardless of the THC content is a disappointment to many in the industry – but insiders say it changes little in terms of the momentum of reform.
Industry experts say the Democratic-controlled House is setting a template for reform going forward that would eliminate all legal distinctions between hemp and marijuana.
The House also is setting the stage, they said, for the Senate to take similar action in 2021 or 2022 – if the Senate flips from Republican control to Democratic control.
Michael Bronstein, president of the American Trade Association for Cannabis and Hemp, noted that the current Republican-controlled Senate would make the proposal, called the MORE Act, a longshot. But he said he thinks the discussion around federal cannabis legalization isn’t going away regardless of the election results or measure’s fate.
What the election results will do, Bronstein said, is “influence the type of bill that we might get on the federal legalization front and the type of legislation that might be considered in the next Congress.”
David Mangone, director of policy and government affairs for The Liaison Group, a Washington DC firm that lobbies for the National Cannabis Roundtable, said he thinks the House has “set a new line in the sand” in terms of pushing comprehensive reform that would deschedule marijuana.
“Up to this point, reform has been very piecemeal,” Mangone said.
That piecemeal approach has been exemplified by state-legal medical marijuana programs being protected from federal interference by provisions in annual congressional spending bills.
In a milestone for reform, the full House last year passed a cannabis-banking measure, but that again is a piecemeal approach.
Bronstein said access to banking “continues to remain a large issue” in the hemp industry. But if the MORE Act passes, it would solve some of the barriers hemp businesses face in terms of the full range of financial services businesses need to operate.
MORE would offer a comprehensive solution to the current conflict between state and federal marijuana laws. It would:
- Legalize marijuana similar to how hemp was legalized nationwide. It would take some time for regulations to be developed, with interstate commerce one of the thorniest issues.
- Allow states to continue to choose how to regulate a commercial marijuana industry.
- Implement a 5% federal retail sales tax on marijuana products.
- Direct tax revenues for programs that would benefit individuals and communities most impacted by the war on drugs.
In late August, House leadership set the MORE Act for a full House vote the week of Sept. 21.
But with COVID-19 relief and budget negotiations ongoing, the plan to vote on the MORE Act before the election was scrapped last week.
“This is a good reminder that cannabis is not the top policy priority for Democrats,” Jaret Seiberg, analyst with New York-based Cowen investment firm, werote in a research note. “Yes, legalization has material support in the Democratic party. But it is not important enough that Democratic leaders will risk their majority by forcing at-risk members to vote on it.”
Seiberg added that “Senate Republicans are largely to blame for this delay” because they’ve “hammered” Democrats for pushing cannabis reform in a broader COVID-19 stimulus package.
“The attacks have made moderates nervous.”
House Majority Leader Steny Hoyer, a Maryland Democrat, said in a statement that the House “is focused relentlessly” on addressing COVID-19 concerns but that cannabis legalization will see a floor debate by year’s end.
Sen. Kamala Harris of California, the Democrats’ vice president nominee, is the lead sponsor of the MORE Act in the Senate and could become an important voice for marijuana legalization if elected. The vice president presides over the Senate and can be influential in driving discussion in the upper chamber.