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Federal Cannabis Legislation Updates – October 2022

Posted by Ryan M. Newburn | Nov 01, 2022 | 0 Comments

President Biden's announcement in October 2022 on steps to make changes to the federal treatment of marijuana came as a sort of surprise for most Americans. Many people wonder what this announcement means, how big of an impact it has, and what other things are being done to change the cannabis and legal landscape in this area. 

This article will address some of those topics, dive into federal cannabis legislation, and discuss how these can affect the legal cannabis industry. Many Americans are unaware that there has been extensive movement on both the Democratic and Republican sides for cannabis-related legislation in recent years.

Biden's Cannabis Announcement

At the beginning of October, the President announced that he was officially pardoning every prior conviction of “simple possession” of marijuana at the federal level via an executive order, but he didn't stop there. He also called on state governors to consider taking steps to do the same in their jurisdictions. Further, he made a point to favor an administrative review of the federal scheduling of cannabis as a Schedule 1 substance as it is currently defined by the Controlled Substance Act (CSA). 

In his written statement announcing these measures, he noted the incongruence with marijuana being classified as more dangerous than fentanyl and on the same level as heroin, saying that "[i]t makes no sense.” 

However, it is important to note that, without removing THC from the CSA scheduling system, there still cannot be a path to federal legalization. If THC is re-scheduled to a different number, it will still be federally criminalized and regulated in some way.

How much impact does the order have?

But how much sense does his executive order pardoning possession convictions make? Or, a better question might be, how much impact does the order have? The fact that the federal government considers marijuana and tetrahydrocannabinol in cannabis (THC) to be Schedule I substances means that possessing it, using it, and (certainly) selling it are all criminal offenses at the federal level. 

Substance Categories

The CSA categorizes various substances into five schedules based on different characteristics, such as potential abuse, medical use, and safety. The schedule from one (I) to five (V) labels substances as progressively safer, with one (I) being the most dangerous. 

This classification of marijuana as a Schedule I substance also allows states to criminalize it, which, historically, most have. It wasn't until fairly recently that about half the states decriminalized or legalized it for recreational and/or medical use. 

The CSA has classified marijuana in this manner since the federal law was enacted in 1970. Because states have mostly had criminal laws regarding marijuana at one time or another, most cannabis-related arrests and convictions have been at the state and local levels. The federal agencies focus more on charging marijuana-related offenses as conspiracies to manufacture, sell, or distribute. 

How many people will be pardoned?

Recently, the New York Times reported that this executive pardoning would only apply to about 6,500 people. To put that into perspective, there were approximately 7.2 million arrests between 2001 and 2010 for simple possession, the vast majority being non-federal. Keep in mind that these are people who "simply" had some small amount of marijuana on their person or in their possession. These people were not determined to be selling or manufacturing it or transporting it across state lines. 

Whether or not those arrests translated into convictions for possession doesn't matter because the executive order does not extend to them. While the federal government takes its time deciding what to do about the CSA classification, several other pieces of legislation address cannabis and its regulation that are worth a closer look at.

Cannabis Administration and Opportunity Act

The Cannabis Administration and Opportunity Act (S.4591/CAOA) is a bill introduced and sponsored by Senator Cory Booker, introduced by Senate Majority Leader Chuck Schumer and Senate Finance Committee Chair Ron Wyden in July 2022. This Act would remove marijuana and THC from the Controlled Substance Act altogether, removing its federal prohibition. 

As mentioned, as long as THC remains classified under any of the CSA's schedules, it will not be eligible for decriminalization or legalization. The other problem with keeping cannabis listed under the CSA is that its existence there prevents any federal regulation of its safe use. Nearly all 50 states allow some cannabis use at varying levels and for various purposes, and not having any centralized federal oversight of such a widely used substance is potentially problematic. 

Additionally, this comprehensive legislation would reform banking and criminal justice regulations related to cannabis, such as:

  • Taxation
  • Market competition rules
  • Reinvestment into communities harmed by the failed war on drugs
  • Lending and grant opportunities for cannabis entrepreneurs.

This Act also establishes workers' rights to privacy about what they do in their personal time (eliminates federal pre-employment drug screening) and ensures cannabis employees aren't discriminated against.    

Secure and Fair Enforcement Banking Act

The House of Representatives passed the Secure and Fair Enforcement (SAFE) Banking Act six times since it was first introduced in 2013. This Act would prevent federal penalties against banks that do business with licensed cannabis retailers. Without its passage, banks are subject to being fined by federal regulators for providing even the most basic of banking services to these types of businesses, including something as benign as opening a checking account. 

The protections this bill offers would allow cannabis businesses to finally accept credit or debit cards from their customers, as many are currently unable to do so because of banks' unwillingness to be penalized. This means that, in many states, even medical patients are forced to rely on cash to obtain their prescriptions, and the same goes for recreational users.

Marijuana Opportunity, Reinvestment and Expungement Act

One bill that has also passed in the House more than once since its inception, but has failed to move through the senate, is the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act. It was voted to pass through the House of Representatives for the second time this past April 2022. 

Like CAOA, this bill also de-schedules marijuana, removing its classification from the CSA and ending federal prohibition. It would also:

  • Expunge certain marijuana convictions and resentence others,
  • Reinvest cannabis-generated tax revenue into social services, and
  • Add protections for people with certain prior marijuana convictions on their records to prevent discrimination in areas such as employment and housing.

Cannabidiol and Marihuana Research Expansion (CMRE) Act

Democratic Senator Diane Feinstein from California sponsored the Cannabidiol and Marihuana Research Expansion (CMRE) Act, which has already passed the senate and was making its way to the House as of March 28, 2022. This bill effectively streamlines the registration process for accredited researchers who want to apply to participate in marijuana research to help advance medical understanding and use. 

Expanding cannabis research opportunities will make legalization and oversight of THC much easier and safer since there is a widespread lack of federal scientific understanding of marijuana's medicinal benefits and properties. It would also promote developing new pharmaceuticals and improving existing ones. 

However, this bill does not consider the possibility of the passage of other bills that would remove cannabis from the DEA's jurisdiction since the CMRE Act would involve the DEA in the research registration process, giving them sole approval authority over the research applications.

It is unclear how this bill would be treated if other bills that create FDA authority over cannabis manufacture and distribution become law since the DEA is a central actor in this bill the way it is currently written. It is possible that all the bills could co-exist, leaving research regulation to the DEA and manufacture and distribution oversight to the FDA, but doing so could cause potential inconsistency and bureaucratic delay.

States Reform Act

The States Reform Act, advanced by Republican Senator Nancy Mace, is the republican's attempt at bi-partisan cannabis legislation and has many similarities to the other bills favored by congressional Democrats. 

For one, it would end federal prohibition outright and transfer federal regulation of marijuana from the Drug Enforcement Administration (DEA) to the Food and Drug Administration (FDA) and the federal Agricultural Department, which the CAOA also does. 

Additionally, it “fully defers” to states to create or maintain their own regulations pertaining to in-state commerce and other aspects of use or legalization. An element of this legislation common to most other legislative efforts is that it seeks to "ensure that cannabis products are treated like alcohol."

Cannabis Legislation Future in the United States

No matter the outcomes of all these proposed marijuana bills, there is also the 2023 Fiscal Year to prepare for, and Senate Democrats have many pieces of legislation they are trying to push through. Still, they have provided hefty reports to consider when making changes to the Congressional Spending Bill Rider for next year. 

As introduced, the Senate Appropriations Committee Chairman Patrick Leahy (D-VT) revealed that the proposed rider maintains language that continues to prevent the Justice Department funds from interfering with the medical cannabis program. It does not go further to add protections for those in that industry. It does, however, encourage federal agencies to promote the research of psychedelic substances for therapeutic benefits, similar to Sen. Feinstein's CMRE Act. This would encompass THC and could be a huge win for expanding its manufacturing and use if such use could be backed up by additional scientific research.   


If you are a part of the cannabis industry and want to learn more about how these various pieces of legislation may affect you, contact our cannabis attorneys today for a free consultation.

About the Author

Ryan M. Newburn

Ryan Newburn is a business and legal expert trusted by Executive Teams and Boards of Directors to apply sound business principals to solve legal and financial problems. Ryan's practice focuses on mergers and acquisitions, financings, corporate formations and corporate governance in a broad range of industries including energy, distribution services, healthcare, medical devices, and technology. Leveraging his formal business training and years of practical experience, including as an executive at public and private companies, Ryan has advised hundreds of companies in dozens of industries of unique legal and financial issues.


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