Movers and SHAKERS
Image Credit: @nancymace (Twitter)
The House Now Has Democrat-led and Republican-led Marijuana Bills, the President is Still Opposed
In a positive turn of events for those supporting federal rescheduling of marijuana, a freshman congresswoman, who was the only Republican vote in favor of a cannabis research bill for veterans last Thursday (11/4), has presented a bill that is an alternative to the Democrats bill in The House's Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act.
Like the MORE Act, the Republican draft bill aims to decriminalize marijuana. Both proposals would also work to address previous incarcerations and enact criminal and social justice reforms, including the expungement of prior convictions. However, the Republican proposal has specifically mentioned that only those cannabis-related convictions with no-violent records will be eligible for expungement.
One important difference in what may become competing thoughts between this new bill and the MORE Act is the level of excise tax. The tax on cannabis as envisioned in the Republican-led draft bill is 3.75%. The MORE Act Proposes a 5% tax to start with a final rate of 8% over three years.
In the meantime, cannabis stocks have been outperforming the overall market since last Thursday. As of now, using diversified cannabis ETFs as a proxy (MJ, TOKE), stocks in this industry are up on average over 14%.
The chief regulator in the market under the proposal would be the Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau (TTB). The Food and Drug Administration (FDA) oversight would be limited to advising serving size, certifying designated state medical cannabis products, and approving pharmaceutical derivatives. The FDA would be prevented from banning the use of cannabis products for non-medical use.
Not unlike cigarettes or spirits, advertising could be restricted, and only adults (from 21 years old) will be legally permitted to consume recreational cannabis.
Revenue from taxation would aim to support grant programs for reintegration, law enforcement, and aids for newly licensed businesses and Small Business Administration (SBA) activities, which would need to treat marijuana businesses the same as other regulated markets.
Why it’s Important
The President personally opposes ending marijuana prohibitions. He does; however, support repairing the harm that harsh criminalization has had on individuals and families. This is the first Republican-led bill introduced in the House of Representatives; it could set up a debate over issues in the competing bill rather than just debate as to whether one side is for full decriminalization or against.
As for the President and Congress members who are still opposed to ending prohibition, a new Gallup poll shows that 68% of Americans support legalization. This is the same percentage as one year ago in the previous Gallup Poll. According to the poll, 50% of registered Republicans support legalization and 83% of Democrats support the measure.
Cannabis stocks moved up double digits after a Republican Bill emerged as an alternative to the Democrat’s More Act. This is the first of its kind on the Republican side and could change the discussion from “should we oppose” to, “let’s debate the differences.” One of the major differences is the excise tax level.
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