US House Members Release Memo on Benefits of Cannabis Decriminalization, Descheduling, Propose Reforms

Marijuana Industry News November 15, 2022 MJ Shareholders

Following the announcement of a Nov. 15 U.S. Congressional hearing titled “Developments in State Cannabis Laws and Bipartisan Cannabis Reforms at the Federal Level,”...

Following the announcement of a Nov. 15 U.S. Congressional hearing titled “Developments in State Cannabis Laws and Bipartisan Cannabis Reforms at the Federal Level,” a U.S. House subcommittee has issued a joint memorandum on cannabis.

The memo, from the U.S. House Committee on Oversight and Reform’s Subcommittee on Civil Rights and Civil Liberties, proposes decriminalization, various policy reforms, and the removal of cannabis from the Controlled Substances Act.

Positions on Decriminalization

The report states there are multiple benefits to federal cannabis decriminalization.

Drawing from the American Civil Liberties Union’s 2020 report, “A Tale of Two Countries: Racially Targeted Arrests in the Era of Marijuana Reform,” the memo states that Black people are nearly four times more likely to be arrested for cannabis possession than white people, despite similar consumption rates between Black and white people.

“In many states, marijuana arrests can have life-altering consequences—parents may lose their children in court proceedings, disabled and low-income recipients of public assistance may lose healthcare, immigrants can face deportation, families can be evicted from public housing, and finding a job can be difficult or outright impossible in some cases. Black and Brown people disproportionately face these repercussions,” the memo shares.

Additionally, the memo discusses cannabis as a treatment option for veterans, stating that the “federal prohibition against Veterans Affairs (VA) doctors prescribing or recommending medical cannabis leaves a significant treatment gap.”

“Despite years of limited access to medical cannabis for research, the first Food and Drug Administration (FDA)-regulated study of veterans’ treatment with smoked cannabis was conducted in fall 2021,” according to the report. “The study revealed promising potential for PTSD alleviation. Additional recent research has shown a correlation between cannabis use and reduced recovery timelines and PTSD symptoms.”

The memo cites the VA’s estimate that 13% of veterans taking opioids have an opioid use disorder. Additionally, the memo states that “studies of medical cannabis use by pain patients in multiple states show a significant reduction or outright elimination of opioid use following treatment,” citing research out of Minnesota and New Mexico.

The memo also cites surveys by the American Legion and Iraq and Afghanistan Veterans of America that found more than 80% of veterans support medical cannabis legalization. However, it notes that a 2022 Kansas University study found that service-connected disabled veterans have a fear of losing VA benefits because of consuming cannabis, which has caused them to continue taking traditional medicine, even though traditional medicines can cause detrimental side effects and dependencies.

Addressing federal employment, the report also highlights it is illegal for federal employees to use cannabis, even when it has been prescribed or consumed off duty.

“Earlier this year, the American Federation for Government Employees (AFGE) approved a resolution to ‘[s]upport deleting responsible off-duty marijuana usage from suitability criteria’ for ‘non-safety-sensitive, non-national-security positions,’” the memo states. “AFGE also expressed support for the Marijuana Opportunity Reinvestment and Expungement (MORE) Act.”

Positions on Reforms

The memo also outlines “necessary reforms related to decriminalization.”

On the topic of expungement, the memo cites cannabis advocates who have said federal reforms would right the harms that have been created by the federal war on drugs.

“Some states permit mayors and other officials to issue pardons for marijuana offenses,” per the report. “In Alabama, Birmingham Mayor Randall Woodfin has utilized a 1975 law to establish the Pardons for Progress program, pardoning more than 15,000 city residents for marijuana possession offenses occurring between 1990 and April 20, 2022, and removing barriers to employment for those individuals. Mayor Woodfin continues to issue pardons on a rolling annual basis and has encouraged other mayors in the state to do the same.”

In addition to prohibition, licensing restrictions and exclusion from financial services cause harm to “legal cannabis companies and communities,” according to the report. The memo delves into burglaries that have occurred at cannabis companies across the country, stating “[i]ndustry and government leaders concur that forcing legal companies to operate entirely in cash is generating criminal activity.”

Cannabis employees can be subject to “downstream effects” from a lack of banking and capital access, barriers to entry in the cannabis market, and high tax rates, the report states.

The memo quotes Sen. Sherrod Brown, D-Ohio, who said in a Senate Committee on Banking hearing: “[G]etting paid in cash means it’s difficult to get a credit card, prove your income to get a loan, or even keep your personal bank account. That can force workers to turn to shady outfits like payday lenders and check cashing services … or trap people in a cycle of debt.”

Regulation is necessary to fully decriminalize cannabis, per the memo, which states: “It will be necessary to grandfather existing state regulated products into the federal framework to prevent the wholesale restructuring of existing state-licensed cannabis industries.”

Competitive tax rates for cannabis would also help businesses and encourage consumers to legally purchase cannabis, according to the memo.

“Under current law, most U.S. cannabis businesses face an up-to-90% effective tax rate due to a federal tax provision that expressly disallows Schedule I drug manufacturers from taking business deductions,” the report states, citing The Washington Post. “Further, cannabis products are taxed at a high rate at the state level, often more than alcohol, raising costs to consumers for legal cannabis,” it states, citing Forbes.

Additionally, the memo cites the Minority Cannabis Business Association’s 2022 “National Cannabis Equity Report” in stating that: “The number of states with policies prohibiting individuals convicted of non-violent cannabis possession from participating in the legal marketplace is a substantial concern for social equity and true second chances. Nearly every medical cannabis adult-use program explicitly disqualifies licensure due to certain convictions, while only a handful provide exemptions for qualified cannabis convictions. Over two-thirds of states cap the total number of businesses that can operate in the state, reducing the total number of opportunities to enter the market, and further disadvantaging individuals with cannabis convictions.”

The Federal Schedule

The Nov. 15 hearing and memo come on the heels of President Joe Biden’s plan, announced Oct. 6, to direct Attorney General Merrick Garland to pardon all federal offenses for simple cannabis possession; to urge governors to pardon state-level offenses for simple cannabis possession; and to ask Garland and Secretary of Health and Human Services Xavier Becerra to review the scheduling of cannabis. Cannabis is currently listed under the Controlled Substances Act as a Schedule I drug with no medical use and a high potential for abuse.

The memo states, however, that cannabis “does not meet the criteria of a Schedule I drug, nor Schedule II through V, for that matter.” It quotes the National Organization for the Reform of Marijuana Laws (NORML) in stating cannabis doesn’t have the same potential for abuse as Schedule II and III drugs. Additionally, it cites Harvard Medical School’s findings that it can be used for pain control, managing nausea and weight loss, muscle relaxation, and treating glaucoma.

“Rescheduling marijuana to a lower category would not be sufficient to remediate the many criminal justice and regulatory issues that exist due to the disparities between state and federal law,” the memo states. “Cannabis would still be prohibited at the federal level, and many of the current issues—from the lack of access to veterans, to the barrier to federal employment, to insurmountable banking regulations—would continue to exist. Descheduling is necessary to effectively end the federal prohibition and permit states to oversee their own marijuana policies.”

Witnesses in the hearing include Woodfin; representatives from NORML; the Global Alliance for Cannabis Commerce, the Coalition for Cannabis Policy, Education, and Regulation; the Veterans Cannabis Coalition; Free Hearts; and the R Street Institute.

Watch the hearing live here at 10 a.m. ET on Nov. 15.