Study Questions Proposed Federal Marijuana Legislation

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Despite good intentions, legislation to make marijuana legal on the federal level would impose strict tax rules and increase retail costs, according to a report released Wednesday. 

U.S. Senators Charles Schumer (D-NY), Cory Booker (D-NJ), and Ron Wyden (D-OR) introduced the measure dubbed The Cannabis Administration and Opportunity Act (CAOA) on July 14. Their intent was to reverse decades of harm inflicted on communities of color being impacted the most through laws that had marijuana being illegal.

But New Frontier Data (NFD), a firm specializing in the cannabis industry worldwide, issued the report revealing that because of these tax rules in the bill, the result would be a less competitive market.

“Once the costs of regulatory compliance and operational expenses are factored in, the environment for cannabis businesses under the proposed legislation would be encumbered, especially for small or under-capitalized businesses,” noted NFD Founder and Executive Director Giadha A. DeCarcer.  

The three lawmakers in their legislation highlighted key components of the bill that would right the wrongs to communities of color.

“By ending the failed federal prohibition of cannabis, the Cannabis Administration and Opportunity Act will ensure that Americans – especially Black and Brown Americans – no longer have to fear arrest or be barred from public housing or federal financial aid for higher education for using cannabis in states where it’s legal,” they said. 

The bill would automatically eradicate federal non-violent marijuana crimes and allows an individual currently serving time in federal prison for non-violent marijuana crimes to petition a court for resentencing, while also creating an Opportunity Trust Fund, funded by federal cannabis tax revenue to reinvest in the communities most impacted by the failed War on Drugs. 

The bill would also help to level the playing field for entrepreneurs of color who continue to face barriers of access to the industry. Importantly, the legislation also ends discrimination in federal public benefits for medical marijuana patients and adult use consumers. 

NFD, in addition to addressing federal taxes in its report, discussed the social and political impact of the bill as well. The report said that although the bill proposes record expungement of more than 500,000 cannabis-related arrests annually, and funds business incentives for those most impacted by cannabis prohibition, state participation in this is not yet mandated. 

The report also emphasized that the legislation will most likely face opposition from both progressive Democrats and Republicans without significant changes.

But Wyden said the legislation brings common sense to the federal government, ends prohibition and restores the lives of those hurt most and sets them up for opportunity. 

Booker added that the legislation will finally turn the page on this dark chapter in American history and begin righting these wrongs.

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