CAO Main Conclusions

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Cannabis Administration & Opportunity Act

1. Decriminalization

The proposal would delist cannabis as a schedule 1 drug. The proposal would maintain a state’s right to cannabis prohibition.

Diversion of legal cannabis would still be punishable under federal law.

The provision clarifies that a state may not prohibit the interstate commerce of cannabis transported through its borders for lawful delivery into another state.

  1. Research

The proposal would seek to encourage research into the benefits and harms of cannabis as a recreational drug and medicinal substance.

Various federal agencies would be responsible for running evaluations concerned with cannabis-impaired driving, societal effect of adult-use, and possible health impacts and benefits.

The proposal would like to procure robust funding for research into the public health and safety of cannabis. Funding for this research will be pushed towards Historically Black Colleges and Universities.

  1. Small Business

State-compliant cannabis businesses will finally be treated like other businesses and allowed access to essential financial services, like bank accounts and loans.

The proposal would seek to provide greater access to socially and economically disadvantaged business owners via technical assistance and loans.

The bureau of labor statistics shall regularly compile and publicize data on demographics of business owners and employees in the cannabis industry.

  1. Restorative Justice

The proposal would seek to expunge federal convictions and criminal records originating from cannabis-related crimes.

The proposal would seek to assist those communities disproportionately hurt by the war on drugs by providing access to three different types of related grants.

States receiving these grants are contingent on creating a process for the automatic expunging of criminal records for cannabis offenses and violations.

  1. Taxation

The proposed federal tax on cannabis would start at 10% in the first year, increasing 5% a year for five years. In five years the federal tax would be 25%.

Small producers with less than $20 million in sales annually are eligible for 50% tax reduction via a tax credit. Producers with a sales greater than $20 million would be eligible for the tax credit on their first $20 million in sales.

The proposal would require cannabis producers and sellers of cannabis products at wholesale to obtain a permit from the Treasury Department for tax purposes. Producers also have to register with the FDA.  

  1. Public Health

The proposal would transfer cannabis jurisdiction from the DEA to FDA and TTB. These two agencies would enter into a memorandum of understanding regarding their respective responsibilities.

The FAA would act to prohibit unfair competition and unlawful practices in the cannabis industry.  

Cannabis products would not be regulated as dietary supplements, but producers would be authorized to make the claims about the benefits of their products in the same way that dietary supplement manufacturers do today.  

The proposal would establish a federal track and trace regime for cannabis products to prevent diversion as well as federal and state tax evasion.