CAPTIONTK
gettyThe Ohio congressman will soon file the STATES 2.0 Act, which seeks to deschedule state-legal cannabis at the federal level, Forbes has learned.
The fight for cannabis legalization in America has a friend from ruby red Ohio: Republican Representative David Joyce. The 66-year-old congressman, who is a co-chair of the Congressional Cannabis Caucus, says he will file a bill “imminently” that, if passed, would amend the Controlled Substances Act to remove state-legal marijuana as a Schedule I drug, the same classification as heroin. Marijuana grown and produced outside of the licensed market would remain illegal at the federal level, allowing states that do not want to legalize pot to keep prohibition in place.
The legislation has not yet been filed, but the draft is being called the “STATES 2.0 Act.” It is a “modernized” version of the STATES Act Joyce introduced in 2019. Joyce’s staff expects the bill to be introduced this week.
“States and [Native American] tribes have had enough with the federal government’s half-in-half-out approach that is applied without rhyme or reason,” Joyce tells Forbes. “Numerous tribes and over 40 states now, including my own, have made it clear that the federal government needs to support their cannabis laws. I’m hopeful this legislation will do just that.”
Cannabis legalization is wildly popular in the U.S. Currently, 38 states, plus Washington, D.C. and Puerto Rico have some form of state-regulated marijuana markets, including 24 that allow adult-use. (On November 7, voters in Joyce’s Ohio passed a ballot measure to legalize adult-use.) Ten additional states permit the use of products containing CBD and small amounts of tetrahydrocannabinol (THC), the psychoactive compound found in marijuana responsible for getting people stoned. Only two states—Idaho and Nebraska—do not allow for any kind of state-sanctioned marijuana.
Joyce’s bill seeks to deschedule state-legal marijuana by amending the Controlled Substances Act. By excluding state-legal cannabis but keeping marijuana produced outside of the regulated market illegal, this nuanced technicality sets the stage for a states-rights-first approach to legalization. Similar to how sports betting was legalized after the federal government removed the national ban and allowed states to make their own laws in 2018, Joyce’s bill seeks to end the current disconnect between federal and state law when it comes to cannabis.
“This legislation would make it the federal government's policy to recognize and legitimize the decisions of each state,” a Joyce spokesperson says. “If the state decides they want to remain prohibitory, the federal government will provide enforcement, if a state decides they want to legalize, the federal government will provide regulation.”
Currently, marijuana prohibition is enforced by the Drug Enforcement Administration. However, the DEA has effectively been ignoring the state markets, creating chaos and a rampant illicit market. Last year, President Joe Biden asked the Department of Health and Human Services and the DEA to consider re-scheduling marijuana. This summer, HHS recommended to the DEA it should be a Schedule III drug, meaning it is considered to have a low to moderate potential for physical or psychological dependence. The DEA has not yet announced its decision.
Under Joyce’s bill, the Alcohol and Tobacco Tax and Trade Bureau (TTB) would regulate cannabis. The Food and Drug Administration would also have authority when it comes to cannabis-infused food and products that make medical claims through the Food, Drug and Cosmetics Act. The TTB would issue permits for state-legal companies, collect taxes, track and trace inventory, and enforce penalties—much as it does for the spirits industry. In turn, the federal regulation of marijuana would be funded by a federal excise tax, although the bill does not provide a number or a range. The bill does say the tax should be low enough so as not to exacerbate state taxes.
The STATES 2.0 Act also eases two of the cannabis industry’s thorniest issues: the federal tax rate applied to marijuana companies and a block on interstate commerce. Under federal law, plant-touching companies are taxed under 280e, a punitive code made for illegal drug traffickers. The tax code applies to Schedule I and II drugs, so if the bill passes 280e would no longer apply to state-legal cannabis.
Joyce’s bill would not outlaw interstate commerce and takes into account that interstate commerce is already happening on a robust level, albeit illegally. Instead, the STATES 2.0 Act kicks the issue back to the states and will allow them to determine how product is sold across and within their borders.
Joyce drafted the bill, but he collaborated with several colleagues in Congress, some of whom will be signing up as co-sponsors. Joyce’s team also worked with industry stakeholders and subject matter experts, including Charles Koch-founded Americans for Prosperity, which has been active in cannabis law reform space for a number of years.
Despite pot’s popularity—70% of Americans now believe cannabis should be legalized—Congress has not passed a substantial reform to the country’s drug laws. Senate Majority Leader Chuck Schumer and Senators Ron Wyden (D-OR) and Cory Booker (D-NJ) introduced a legalization bill in July 2021, but it has not been taken up for a vote. Representative Nancy Mace, a Republican from South Carolina, introduced her own bill to end federal marijuana prohibition in November 2021, but that has also not been brought to a vote. The SAFE Banking Act, which would make it easier for cannabis companies to access mainstream financial services, has not passed both chambers of Congress for several years.
Andrew Freedman, the executive director of the Washington, D.C.-based nonprofit Coalition for Cannabis Policy, Education and Regulation and who collaborated with Joyce’s team on the bill, sees this legislation as a way to get Republicans and stubborn prohibitionists in government to reform federal law.
“Despite cannabis pulling at 70%, it remains extremely divisive,” says Freedman. “If we're going move forward as a country on this, we're going have to acknowledge the realities of the fact that over half of America now has access to adult-use cannabis, while not saying this has to happen everywhere.”
Even in a chaotic House, where Speaker Kevin McCarthy was ousted this year and replaced by conservative Representative Mike Johnson (R-LA), Freedman believes a STATES 2.0 could get Republicans to sign on.
“Because it has something today that is helpful to states that don’t want legalization, it has a political power that potentially no other bill has,” says Freedman. “In theory, this has everything that a Republican should want, while moving away from the nonsensical stance the federal government has had on cannabis.”
MORE FROM FORBES
