In March 2022, the Senate passed the CMRE Act, the Cannabidiol and Marijuana Research Expansion Act) while also scheduling the MORE Act, the Marijuana Opportunity and Expungement Act. These acts are crucial pieces of legislation for the cannabis industry.
This article explores these acts and how they will impact cannabis businesses and individuals. If you have any questions regarding these acts, contact our experienced cannabis lawyers today.
What is the MORE Act?
The Marijuana Opportunity, Reinvestment, and Expungement Act, or MORE Act for short, is a groundbreaking piece of legislation. The Act would ensure the removal of cannabis for adult use from the list of restricted substances under the Controlled Substances Act.
Furthermore, the MORE Act would eliminate associated criminal penalties and make other significant advancements in criminal justice reform, social justice, and economic development that would ultimately result in ending the criminalization of cannabis.
When was the MORE Act first introduced?
The bill was first introduced to Congress in 2019 but was not successfully passed by the House of Representatives until December 2020. Because the Senate chose not to proceed with the bill's hearing, the MORE Act was filed and passed by the House for a second time in April 2022.
It is essential to understand that the Act's passage will allow states to determine their own cannabis laws. Marijuana is already legal for medical use in 37 states and Washington, DC, and adult recreational use in 18 states and the capital.
MORE Act Key Provisions
Some of the other key provisions of the MORE Act include:
- The Controlled Substances Act would no longer have cannabis on its list of prohibited substances.
- The MORE Act would abolish cannabis prohibition at the federal level and apply to past convictions. Cannabis-related federal arrests, accusations, and convictions would all be automatically and permanently expunged. Individual states, however, may decide to keep cannabis illegal.
- The proposal would levy a 5% tax on cannabis retail sales. The proceeds from these taxes will go to a trust fund established to support communities that the war on drugs has adversely impacted. The legislation was changed to have a 5% initial tax rate rise to 8% over three years.
- The Office of Cannabis Justice would be established under the MORE Act to oversee the legal issues about social equality related to the bill.
- The legislation would ensure that no one, including those receiving earned benefits or immigrants who face deportation, may be subjected to discrimination by the federal government because of the use of cannabis.
- The legislation would facilitate research, improve banking and tax regulations, and support economic growth.
Key Concerns of the MORE Act
Although the MORE Act consists of many aspects that would benefit communities and reduce drug-related offenses and convictions, there are a few concerns about the bill that will need to be addressed before successful passage in the US Senate.
As listed in the above key provisions, the MORE Act suggests levying an excise tax on cannabis-related goods. The excise tax would start at a base level of 5% for the first two years and be based on the product's retail price. The rate would then rise by 1% annually for the following four years, up until year five. After year five, the tax would be 8% of the Treasury Department's established prevailing sales price.
MORE Act Potentially Increasing Cannabis Black Market
One primary argument against the proposed excise included in the MORE Act is that it will encourage the growth of the black market because, when combined with state and municipal sales taxes, it will reduce the price of cannabis sold by unlicensed sellers on a relative basis. In other words, cannabis buyers prefer to purchase goods from unlicensed sellers rather than licensed retailers.
Another key concern of the MORE Act is that the bill does not include a provision that will allow for easy access to banks in jurisdictions where the sale of cannabis is legal.
The cannabis industry will continue to run as a primarily cash-based sector until Congress solves the difficulties dispensaries face in accessing the financial system. The availability of large amounts of cash and the products offered to create an environment replete with opportunities for "bad actors," which considerably increases the risk for various crimes like fraud and money laundering.
Status of the MORE Act
Though the bill has failed in the past, the MORE Act passed the House Judiciary Committee in 2021. The bill has now been introduced as HR 3617 and is awaiting further action.
By a vote of 219-202, with the support of Democrats, the MORE Act was approved by the House. Unfortunately, the chances for the MORE Act are unfavorable because there is no Republican support. In the Senate, where 60 votes are required to end a filibuster and bring legislation to a vote, previous House-passed cannabis legislation has a history of failing in the Senate.
The Senate has proposed the Cannabis Administration and Opportunity Act, a bill to legalize cannabis. The likelihood that this proposed law will pass will depend on whether it receives any Republican backing.
What is the CMRE Act?
Under the current version of the Cannabidiol and Marihuana Research Expansion Act, CMRE Act, the Food and Drug Administration (FDA) would be pressured to encourage and promote the development of drugs derived from cannabis which would ease the application procedure for researchers seeking to study the plant.
Cannabis could be grown for research purposes under the CMRE Act by accredited medical and osteopathic schools, doctors, research organizations, and manufacturers possessing a Schedule I registration. Under the proposed legislation, applications from producers of cannabis-derived, FDA-approved medications would be subject to approval by the Drug Enforcement Administration.
Reporting Requirements under the CMRE Act
Per the CMRE Act, the US Department of Health and Human Services (HHS) would also have to provide reports on the possible medical advantages of cannabis use, the obstacles to cannabis research, and strategies for overcoming them. The bill also makes it clear that doctors can discuss with their patients the advantages and risks of cannabis use without breaching the Controlled Substances Act (CSA).
Major mainstream medical organizations, as well as other pro-legalization organizations, support the CMRE Act. Some experts in the sector have expressed concern about the DEA's potential control over the application process and the legislation's ambiguous definitions of cannabidiol and other cannabinoids. The Senate approved an earlier version of the CMRE Act in 2020. Whether this version will pass approval by house legislators is an ongoing question.
Key Concerns of the CMRE Act
One of the major concerns of the CMRE Act is the definition of “cannabidiol.” The Act defines “cannabidiol” as “(a) the substance…derived from marijuana that has a delta-9-tetrahydrocannabinol level that is greater than 0.3 percent; and (b) the synthetic equivalent of the substance described in subparagraph (a);.”
Experts argue that the cannabidiol provisions of the bill make cannabidiol study more complicated than it is now. Cannabidiol would fall under the category of "hemp" and not "marijuana" under federal law because it would not surpass the 0.3% delta-9 THC threshold at that reading. Since hemp is not a banned substance, it is not subject to the same legal restrictions as Schedule I "marijuana"; hence, more accessible for researchers to examine.
Consequently, the "cannabidiol" provisions of the bill, which its proponent claims will boost cannabidiol study, will severely limit such research.
How the CMRE Act Can Affect Marijuana Manufacturers
Another critical concern is that the bill would add a provision to 21 USC 823. This provision would grant the Drug Enforcement Administration (DEA) the unchallengeable authority of refusing to issue any licenses to marijuana manufacturers by refusing to publish a notice in the Federal Register inviting more applications. The provision states:
“As it relates to applications to manufacturing marihuana for research purposes, if the Attorney General places a notice in the Federal to increase the number of entities registered under this Act to manufacture marihuana to supply appropriately registered researchers in the United States, the attorney General shall, not later than 60 days after the date on which the Attorney General receives a completed application: (i) approved the application; or (ii) request supplemental information.”
The Controlled Substances Act, as it is currently written, does not give the DEA that level of control over any registration application.
How the CMRE Act Can Restrict Marijuana Cultivators
Another bill provision would restrict licensed marijuana cultivators from producing the plant solely for FDA research, complicating things further for cannabis manufacturers. The DEA has acknowledged that registered growers may cultivate cannabis for research and product development. However, this means a DEA manufacturing registration is required for anyone who wants to plant, produce, grow, or harvest marijuana for research purposes.
No Solid Deadlines in the CMRE Act
Finally, the bill does not propose solid deadlines for the DEA to review and process manufacturer registration applications. The Act does not specify deadlines or time windows for review, nor does the bill establish the consequences of the DEA's failure to review applications in a reasonable time frame. Though the provision gives a 60-day time limit for the Attorney General to review applications and make a decision, the DEA is not mentioned in the provision. Therefore, the time constraint may not apply to the DEA. These factors contribute to and make production more difficult for cultivators.
Status of the CMRE Act
The Senate unanimously passed the CMRE Act in March of 2022. The bill must now be passed by the House and signed by the President to become law.
The Act passed the Senate, which is notorious for where bills typically die. Therefore, there is a higher chance of passage for the CMRE Act than the MORE Act.
President Biden's Recent Marijuana Announcement
In October 2022, President Biden announced that he was taking steps to overhaul federal law pertaining to cannabis. These steps include:
- Pardoning all previous federal offenses for simple marijuana possession.
- Calling all state governors to do the same at the state level.
Legislation around marijuana is constantly changing and being developed. You should always stay up-to-date on what is happening to ensure you understand how the laws may affect you and your cannabis business.
If you have any questions, contact our legal team today for a free consultation.
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