The States Act
June 11, 2018
Last week, Sen. Elizabeth Warren (D-Mass.) and Sen. Cory Gardner (R-Colo.) unveiled bipartisan legislation aimed at protecting state-legal marijuana programs from federal interference. The Bill, known as the States Act, seeks to amend the Controlled Substances Act (CSA) to permit the cultivation, distribution and dispensation of cannabis if done in compliance with state law, or the laws of a federally recognized Indian tribe. If enacted, the bill could drastically accelerate the growth of the nascent U.S. cannabis industry.
Significantly, the new law would give state-legal marijuana businesses access to traditional banking tools and tax deductions currently available to all legal businesses. Exempting marijuana-related activities from the CSA will decrease the risk of investing in, and doing business with, state-legal marijuana companies. Currently, financial institutions, insurance carriers, accountants and even law firms have turned away state-legal marijuana businesses due to the risk of violating federal law. The States Act, if enacted, will give a boost to an industry that is already experiencing unprecedented growth. According to estimates published in the newly released Marijuana Business Factbook, the total economic impact of legal marijuana is expected to reach $63 billion-$77 billion by 2022 – a 223% increase. By comparison, the $77 billion figure is similar to the 2017 gross domestic product of New Hampshire, which stands at $81 billion, according to the U.S. Bureau of Economic Analysis.
Late last week while addressing reporters on his way to the G-7 Summit in Canada, President Trump said he likely will support a congressional effort to end the federal ban on marijuana, which puts him sharply at odds with Atty. Gen. Jeff Sessions who remains opposed to legalization of marijuana and has lobbied Congress to reduce current protections for medical marijuana.
The Regulated Substances Blog is intended to keep readers current on developments regarding medical cannabis legalization and regulation and is not intended to be legal advice. If you have any questions, please contact Dan Clearfield at dclearfield@eckertseamans.com or any other member of our Regulated Substances Group.