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[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3617 Engrossed in House (EH)]

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117th CONGRESS
  2d Session
                                H. R. 3617

_______________________________________________________________________

                                 AN ACT

 
 To decriminalize and deschedule cannabis, to provide for reinvestment 
 in certain persons adversely impacted by the War on Drugs, to provide 
 for expungement of certain cannabis offenses, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Marijuana Opportunity Reinvestment 
and Expungement Act'' or the ``MORE Act''.

SEC. 2. FINDINGS.

    The Congress finds as follows:
            (1) The communities that have been most harmed by cannabis 
        prohibition are benefiting the least from the legal marijuana 
        marketplace.
            (2) A legacy of racial and ethnic injustices, compounded by 
        the disproportionate collateral consequences of 80 years of 
        cannabis prohibition enforcement, now limits participation in 
        the industry.
            (3) 37 States, the District of Columbia, Puerto Rico, Guam, 
        and the U.S. Virgin Islands have adopted laws allowing legal 
        access to cannabis, and 15 States, the District of Columbia, 
        the Commonwealth of the Northern Mariana Islands, and Guam have 
        adopted laws legalizing cannabis for adult recreational use.
            (4) A total of 47 States have reformed their laws 
        pertaining to cannabis despite the Schedule I status of 
        marijuana and its Federal criminalization.
            (5) Legal cannabis sales totaled $20,000,000,000 in 2020 
        and are projected to reach $40,500,000,000 by 2025.
            (6) According to the American Civil Liberties Union (ACLU), 
        enforcing cannabis prohibition laws costs taxpayers 
        approximately $3.6 billion a year.
            (7) The continued enforcement of cannabis prohibition laws 
        results in over 600,000 arrests annually, disproportionately 
        impacting people of color who are almost 4 times more likely to 
        be arrested for cannabis possession than their White 
        counterparts, despite equal rates of use across populations.
            (8) People of color have been historically targeted by 
        discriminatory sentencing practices resulting in Black men 
        receiving drug sentences that are 13.1 percent longer than 
        sentences imposed for White men and Latinos being nearly 6.5 
        times more likely to receive a Federal sentence for cannabis 
        possession than non-Hispanic Whites.
            (9) In 2013, simple cannabis possession was the fourth most 
        common cause of deportation for any offense and the most common 
        cause of deportation for drug law violations.
            (10) Fewer than one-fifth of cannabis business owners 
        identify as minorities and only approximately 4 percent are 
        black.
            (11) Applicants for cannabis licenses are limited by 
        numerous laws, regulations, and exorbitant permit applications, 
        licensing fees, and costs in these States, which can require 
        more than $700,000.
            (12) Historically disproportionate arrest and conviction 
        rates make it particularly difficult for people of color to 
        enter the legal cannabis marketplace, as most States bar these 
        individuals from participating.
            (13) Federal law severely limits access to loans and 
        capital for cannabis businesses, disproportionately impacting 
        minority small business owners.
            (14) Some States and municipalities have taken proactive 
        steps to mitigate inequalities in the legal cannabis 
        marketplace and ensure equal participation in the industry.

SEC. 3. DECRIMINALIZATION OF CANNABIS.

    (a) Cannabis Removed From Schedule of Controlled Substances.--
            (1) Removal in statute.--Subsection (c) of schedule I of 
        section 202(c) of the Controlled Substances Act (21 U.S.C. 812) 
        is amended--
                    (A) by striking ``(10) Marihuana.''; and
                    (B) by striking ``(17) Tetrahydrocannabinols, 
                except for tetrahydrocannabinols in hemp (as defined 
                under section 297A of the Agricultural Marketing Act of 
                1946).''.
            (2) Removal from schedule.--Not later than 180 days after 
        the date of the enactment of this Act, the Attorney General 
        shall finalize a rulemaking under section 201(a)(2) removing 
        marihuana and tetrahydrocannabinols from the schedules of 
        controlled substances. For the purposes of the Controlled 
        Substances Act, marihuana and tetrahydrocannabinols shall each 
        be deemed to be a drug or other substance that does not meet 
        the requirements for inclusion in any schedule. A rulemaking 
        under this paragraph shall be considered to have taken effect 
        as of the date of enactment of this Act for purposes of any 
        offense committed, case pending, conviction entered, and, in 
        the case of a juvenile, any offense committed, case pending, 
        and adjudication of juvenile delinquency entered before, on, or 
        after the date of enactment of this Act.
    (b) Conforming Amendments to Controlled Substances Act.--The 
Controlled Substances Act (21 U.S.C. 801 et seq.) is amended--
            (1) in section 102(44) (21 U.S.C. 802(44)), by striking 
        ``marihuana,'';
            (2) in section 401(b) (21 U.S.C. 841(b))--
                    (A) in paragraph (1)--
                            (i) in subparagraph (A)--
                                    (I) in clause (vi), by inserting 
                                ``or'' after the semicolon;
                                    (II) by striking clause (vii); and
                                    (III) by redesignating clause 
                                (viii) as clause (vii);
                            (ii) in subparagraph (B)--
                                    (I) in clause (vi), by inserting 
                                ``or'' after the semicolon;
                                    (II) by striking clause (vii); and
                                    (III) by redesignating clause 
                                (viii) as clause (vii);
                            (iii) in subparagraph (C), in the first 
                        sentence, by striking ``subparagraphs (A), (B), 
                        and (D)'' and inserting ``subparagraphs (A) and 
                        (B)'';
                            (iv) by striking subparagraph (D);
                            (v) by redesignating subparagraph (E) as 
                        subparagraph (D); and
                            (vi) in subparagraph (D)(i), as so 
                        redesignated, by striking ``subparagraphs (C) 
                        and (D)'' and inserting ``subparagraph (C)'';
                    (B) by striking paragraph (4); and
                    (C) by redesignating paragraphs (5), (6), and (7) 
                as paragraphs (4), (5), and (6), respectively;
            (3) in section 402(c)(2)(B) (21 U.S.C. 842(c)(2)(B)), by 
        striking ``, marihuana,'';
            (4) in section 403(d)(1) (21 U.S.C. 843(d)(1)), by striking 
        ``, marihuana,'';
            (5) in section 418(a) (21 U.S.C. 859(a)), by striking the 
        last sentence;
            (6) in section 419(a) (21 U.S.C. 860(a)), by striking the 
        last sentence;
            (7) in section 422(d) (21 U.S.C. 863(d))--
                    (A) in the matter preceding paragraph (1), by 
                striking ``marijuana,''; and
                    (B) in paragraph (5), by striking ``, such as a 
                marihuana cigarette,''; and
            (8) in section 516(d) (21 U.S.C. 886(d)), by striking 
        ``section 401(b)(6)'' each place the term appears and inserting 
        ``section 401(b)(5)''.
    (c) Other Conforming Amendments.--
            (1) National forest system drug control act of 1986.--The 
        National Forest System Drug Control Act of 1986 (16 U.S.C. 559b 
        et seq.) is amended--
                    (A) in section 15002(a) (16 U.S.C. 559b(a)) by 
                striking ``marijuana and other'';
                    (B) in section 15003(2) (16 U.S.C. 559c(2)) by 
                striking ``marijuana and other''; and
                    (C) in section 15004(2) (16 U.S.C. 559d(2)) by 
                striking ``marijuana and other''.
            (2) Interception of communications.--Section 2516 of title 
        18, United States Code, is amended--
                    (A) in subsection (1)(e), by striking 
                ``marihuana,''; and
                    (B) in subsection (2) by striking ``marihuana''.
            (3) FMCSA provisions.--
                    (A) Conforming amendment.--Section 31301(5) of 
                title 49, United States Code, is amended by striking 
                ``section 31306,'' and inserting ``sections 31306, 
                31306a, and subsections (b) and (c) of section 
                31310,''.
                    (B) Definition.--Section 31306(a) of title 49, 
                United States Code, is amended--
                            (i) by striking ``means any substance'' and 
                        inserting the following: ``means--
                    ``(A) any substance''; and
                            (ii) by striking the period at the end and 
                        inserting ``; and
                    ``(B) any substance not covered under subparagraph 
                (A) that was a substance under such section as of 
                December 1, 2018, and specified by the Secretary of 
                Transportation.''.
                    (C) Disqualifications.--Section 31310(b) of title 
                49, United States Code, is amended by adding at the end 
                the following:
    ``(3) In this subsection and subsection (c), the term `controlled 
substance' has the meaning given such term in section 31306(a).''.
            (4) FAA provisions.--Section 45101 of title 49, United 
        States Code, is amended--
                    (A) by striking ``means any substance'' and 
                inserting the following: ``means--
                    ``(A) any substance''; and
                    (B) by striking the period at the end and inserting 
                ``; and
                    ``(B) any substance not covered under subparagraph 
                (A) that was a substance under such section as of 
                December 1, 2018, and specified by the Secretary of 
                Transportation.''.
            (5) FRA provisions.--Section 20140(a) of title 49, United 
        States Code, is amended--
                    (A) by striking ``means any substance'' and 
                inserting the following: ``means--
                    ``(A) any substance''; and
                    (B) by striking the period at the end and inserting 
                ``; and
                    ``(B) any substance not covered under subparagraph 
                (A) that was a substance under such section as of 
                December 1, 2018, and specified by the Secretary of 
                Transportation.''.
            (6) FTA provisions.--Section 5331(a)(1) of title 49, United 
        States Code, is amended--
                    (A) by striking ``means any substance'' and 
                inserting the following: ``means--
                    ``(A) any substance''; and
                    (B) by striking the period at the end and inserting 
                ``; and
                    ``(B) any substance not covered under subparagraph 
                (A) that was a substance under such section as of 
                December 1, 2018, and whose use the Secretary of 
                Transportation decides has a risk to transportation 
                safety.''.
    (d) Retroactivity.--The amendments made by this section to the 
Controlled Substances Act (21 U.S.C. 801 et seq.) are retroactive and 
shall apply to any offense committed, case pending, conviction entered, 
and, in the case of a juvenile, any offense committed, case pending, or 
adjudication of juvenile delinquency entered before, on, or after the 
date of enactment of this Act.
    (e) Effect on Other Law.--Nothing in this subtitle shall affect or 
modify--
            (1) the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 
        et seq.);
            (2) section 351 of the Public Health Service Act (42 U.S.C. 
        262); or
            (3) the authority of the Commissioner of Food and Drugs and 
        the Secretary of Health and Human Services--
                    (A) under--
                            (i) the Federal Food, Drug, and Cosmetic 
                        Act (21 U.S. 301 et seq.); or
                            (ii) section 351 of the Public Health 
                        Service Act (42 U.S.C. 262); or
                    (B) to promulgate Federal regulations and 
                guidelines that relate to products containing cannabis 
                or cannabis-derived compounds under the Act described 
                in subparagraph (A)(i) or the section described in 
                subparagraph (A)(ii).
    (f) Public Meetings.--Not later than one year after the date of 
enactment of this Act, the Secretary of Health and Human Services, 
acting through the Commissioner of Food and Drugs, shall hold not less 
than one public meeting to address the regulation, safety, 
manufacturing, product quality, marketing, labeling, and sale of 
products containing cannabis or cannabis-derived compounds.
    (g) Special Rule for Federal Employee Testing.--Section 503 of the 
Supplemental Appropriations Act, 1987 (5 U.S.C. 7301 note) is amended 
by adding at the end the following:
    ``(h) Marijuana.--
            ``(1) Continued testing.--Notwithstanding the Marijuana 
        Opportunity Reinvestment and Expungement Act and the amendments 
        made thereby, the Secretary of Health and Human Services may 
        continue to include marijuana for purposes of drug testing of 
        Federal employees subject to this section, Executive Order 
        12564, or other applicable Federal laws and orders.
            ``(2) Definition.--The term `marijuana' has the meaning 
        given to the term `marihuana' in section 102 of the Controlled 
        Substances Act (21 6 U.S.C. 802) on the day before the date of 
        enactment of the Marijuana Opportunity Reinvestment and 
        Expungement Act.''.
    (h) Special Rule for Certain Regulations.--
            (1) In general.--The amendments made by this section may 
        not be construed to abridge the authority of the Secretary of 
        Transportation, or the Secretary of the department in which the 
        Coast Guard is operating, to regulate and screen for the use of 
        a controlled substance.
            (2) Controlled substance defined.--In this subsection, the 
        term ``controlled substance'' means--
                    (A) any substance covered under section 102 of the 
                Controlled Substances Act (21 U.S.C. 802) on the day 
                before the date of enactment of this Act; and
                    (B) any substance not covered under subparagraph 
                (A) that was a substance covered under section 102 of 
                the Controlled Substances Act (21 U.S.C. 802) on 
                December 1, 2018, and specified by the Secretary of 
                Transportation.

SEC. 4. DEMOGRAPHIC DATA OF CANNABIS BUSINESS OWNERS AND EMPLOYEES.

    (a) In General.--The Bureau of Labor Statistics shall regularly 
compile, maintain, and make public data on the demographics of--
            (1) individuals who are business owners in the cannabis 
        industry; and
            (2) individuals who are employed in the cannabis industry.
    (b) Demographic Data.--The data collected under subsection (a) 
shall include data regarding--
            (1) age;
            (2) certifications and licenses;
            (3) disability status;
            (4) educational attainment;
            (5) family and marital status;
            (6) nativity;
            (7) race and Hispanic ethnicity;
            (8) school enrollment;
            (9) veteran status; and
            (10) sex.
    (c) Confidentiality.--The name, address, and other identifying 
information of individuals employed in the cannabis industry shall be 
kept confidential by the Bureau and not be made available to the 
public.
    (d) Definitions.--In this section:
            (1) Cannabis.--The term ``cannabis'' means either marijuana 
        or cannabis as defined under the State law authorizing the sale 
        or use of cannabis in which the individual or entity is 
        located.
            (2) Cannabis industry.--The term ``cannabis industry'' 
        means an individual or entity that is licensed or permitted 
        under a State or local law to engage in commercial cannabis-
        related activity.
            (3) Owner.--The term ``owner'' means an individual or 
        entity that is defined as an owner under the State or local law 
        where the individual or business is licensed or permitted.

SEC. 5. CREATION OF OPPORTUNITY TRUST FUND AND IMPOSITION OF TAXES WITH 
              RESPECT TO CANNABIS PRODUCTS.

    (a) Establishment of Opportunity Trust Fund.--Subchapter A of 
chapter 98 of the Internal Revenue Code of 1986 is amended by adding at 
the end the following new section:

``SEC. 9512. ESTABLISHMENT OF OPPORTUNITY TRUST FUND.

    ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the `Opportunity Trust 
Fund' (referred to in this section as the `Trust Fund'), consisting of 
such amounts as may be appropriated or credited to such fund as 
provided in this section or section 9602(b).
    ``(b) Transfers to Trust Fund.--There are hereby appropriated to 
the Trust Fund amounts equivalent to the net revenues received in the 
Treasury from the taxes imposed under chapter 56.
    ``(c) Expenditures.--Amounts in the Trust Fund shall be available, 
without further appropriation, only as follows:
            ``(1) 50 percent to the Attorney General to carry out 
        section 3052(a) of part OO of the Omnibus Crime Control and 
        Safe Streets Act of 1968.
            ``(2) 10 percent to the Attorney General to carry out 
        section 3052(b) of part OO of the Omnibus Crime Control and 
        Safe Streets Act of 1968.
            ``(3) 20 percent to the Administrator of the Small Business 
        Administration to carry out section 6(b)(1) of the Marijuana 
        Opportunity Reinvestment and Expungement Act.
            ``(4) 20 percent to the Administrator of the Small Business 
        Administration to carry out section 6(b)(2) of the Marijuana 
        Opportunity Reinvestment and Expungement Act.''.
    (b) Cannabis Revenue and Regulation Act.--Subtitle E of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new chapter:

                    ``CHAPTER 56--CANNABIS PRODUCTS

                ``subchapter a. tax on cannabis products

                    ``subchapter b. occupational tax

                    ``subchapter c. bond and permits

                       ``subchapter d. operations

                       ``subchapter e. penalties

                ``Subchapter A--Tax on Cannabis Products

``Sec. 5901. Imposition of tax.
``Sec. 5902. Definitions.
``Sec. 5903. Liability and method of payment.
``Sec. 5904. Exemption from tax; transfers in bond.
``Sec. 5905. Credit, refund, or drawback of tax.

``SEC. 5901. IMPOSITION OF TAX.

    ``(a) Imposition of Tax.--There is hereby imposed on any cannabis 
product produced in or imported into the United States a tax equal to--
            ``(1) for any such product removed during the first 5 
        calendar years ending after the date on which this chapter 
        becomes effective, the applicable percentage of such product's 
        removal price, and
            ``(2) for any product removed during any calendar year 
        after the calendar years described in paragraph (1), the 
        applicable equivalent amount.
    ``(b) Applicable Percentage.--For purposes of subsection (a)(1), 
the applicable percentage shall be determined as follows:
            ``(1) For any cannabis product removed during the first 2 
        calendar years ending after the date on which this chapter 
        becomes effective, 5 percent.
            ``(2) For any cannabis product removed during the calendar 
        year after the last calendar year to which paragraph (1) 
        applies, 6 percent.
            ``(3) For any cannabis product removed during the calendar 
        year after the calendar year to which paragraph (2) applies, 7 
        percent.
            ``(4) For any cannabis product removed during the calendar 
        year after the calendar year to which paragraph (3) applies, 8 
        percent.
    ``(c) Applicable Equivalent Amount.--
            ``(1) In general.--For purposes of subsection (a)(2), the 
        term `applicable equivalent amount' means, with respect to any 
        cannabis product removed during any calendar year, an amount 
        equal to--
                    ``(A) in the case of any cannabis product not 
                described in subparagraph (B), the product of the 
                applicable rate per ounce multiplied by the number of 
                ounces of such product (and a proportionate tax at the 
                like rate on all fractional parts of an ounce of such 
                product), and
                    ``(B) in the case of any THC-measurable cannabis 
                product, the product of the applicable rate per gram 
                multiplied by the number of grams of 
                tetrahydrocannabinol in such product (and a 
                proportionate tax at the like rate on all fractional 
                parts of a gram of tetrahydrocannabinol in such 
                product).
            ``(2) Applicable rates.--
                    ``(A) In general.--For purposes of paragraph 
                (1)(A), the term `applicable rate per ounce' means, 
                with respect to any cannabis product removed during any 
                calendar year, 8 percent of the prevailing sales price 
                of cannabis flowers sold in the United States during 
                the 12-month period ending one calendar quarter before 
                such calendar year, expressed on a per ounce basis, as 
                determined by the Secretary.
                    ``(B) THC-measurable cannabis products.--For 
                purposes of paragraph (1)(B), the term `applicable rate 
                per gram' means, with respect to any cannabis product 
                removed during any calendar year, 8 percent of the 
                prevailing sales price of tetrahydrocannabinol sold in 
                the United States during the 12-month period ending one 
                calendar quarter before such calendar year, expressed 
                on a per gram basis, as determined by the Secretary.
    ``(d) Time of Attachment on Cannabis Products.--The tax under this 
section shall attach to any cannabis product as soon as such product is 
in existence as such, whether it be subsequently separated or 
transferred into any other substance, either in the process of original 
production or by any subsequent process.

``SEC. 5902. DEFINITIONS.

    ``(a) Definitions Related to Cannabis Products.--For purposes of 
this chapter--
            ``(1) Cannabis product.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `cannabis product' means any 
                article which contains (or consists of) cannabis.
                    ``(B) Exceptions.--The term `cannabis product' 
                shall not include an FDA-approved article or industrial 
                hemp.
                    ``(C) FDA-approved article.--The term `FDA-approved 
                article' means any article if the producer or importer 
                thereof demonstrates to the satisfaction of the 
                Secretary of Health and Human Services that such 
                article is--
                            ``(i) a drug--
                                    ``(I) that is approved under 
                                section 505 of the Federal Food, Drug, 
                                and Cosmetic Act or licensed under 
                                section 351 of the Public Health 
                                Service Act, or
                                    ``(II) for which an investigational 
                                use exemption has been authorized under 
                                section 505(i) of the Federal Food, 
                                Drug, and Cosmetic Act or under section 
                                351(a) of the Public Health Service 
                                Act, or
                            ``(ii) a combination product (as described 
                        in section 503(g) of the Federal Food, Drug, 
                        and Cosmetic Act), the constituent parts of 
                        which were approved or cleared under section 
                        505, 510(k), or 515 of such Act.
                    ``(D) Industrial hemp.--The term `industrial hemp' 
                means the plant Cannabis sativa L. and any part of such 
                plant, whether growing or not, with a delta-9 
                tetrahydrocannabinol concentration of not more than 0.3 
                percent on a dry weight basis.
            ``(2) THC-measurable cannabis product.--The term `THC-
        measurable cannabis product' means any cannabis product--
                    ``(A) with respect to which the Secretary has made 
                a determination that the amount of tetrahydrocannabinol 
                in such product can be measured with a high degree of 
                accuracy, or
                    ``(B) which is not cannabis flower and the 
                concentration of tetrahydrocannabinol in which is 
                significantly higher than the average such 
                concentration in cannabis flower.
            ``(3) Cannabis.--The term `cannabis' has the meaning given 
        such term under section 102(16) of the Controlled Substances 
        Act (21 U.S.C. 802(16)).
    ``(b) Definitions Related to Cannabis Enterprises.--For purposes of 
this chapter--
            ``(1) Cannabis enterprise.--The term `cannabis enterprise' 
        means a producer, importer, or export warehouse proprietor.
            ``(2) Producer.--
                    ``(A) In general.--The term `producer' means any 
                person who plants, cultivates, harvests, grows, 
                manufactures, produces, compounds, converts, processes, 
                prepares, or packages any cannabis product.
                    ``(B) Personal use exception.--Subject to 
                regulation prescribed by the Secretary, the term 
                `producer' shall not include any individual otherwise 
                described in subparagraph (A) if the only cannabis 
                product described in such subparagraph with respect to 
                such individual is for personal or family use and not 
                for sale.
            ``(3) Importer.--The term `importer' means any person who--
                    ``(A) is in the United States and to whom non-tax-
                paid cannabis products, produced in a foreign country 
                or a possession of the United States, are shipped or 
                consigned,
                    ``(B) removes cannabis products for sale or 
                consumption in the United States from a customs bonded 
                warehouse, or
                    ``(C) smuggles or otherwise unlawfully brings any 
                cannabis product into the United States.
            ``(4) Export warehouse proprietor.--
                    ``(A) In general.--The term `export warehouse 
                proprietor' means any person who operates an export 
                warehouse.
                    ``(B) Export warehouse.--The term `export 
                warehouse' means a bonded internal revenue warehouse 
                for the storage of cannabis products, upon which the 
                internal revenue tax has not been paid--
                            ``(i) for subsequent shipment to a foreign 
                        country or a possession of the United States, 
                        or
                            ``(ii) for consumption beyond the 
                        jurisdiction of the internal revenue laws of 
                        the United States.
            ``(5) Cannabis production facility.--The term `cannabis 
        production facility' means an establishment which is qualified 
        under subchapter C to perform any operation for which such 
        qualification is required under such subchapter.
    ``(c) Other Definitions.--For purposes of this chapter--
            ``(1) Produce.--The term `produce' includes any activity 
        described in subsection (b)(2)(A).
            ``(2) Removal; remove.--The terms `removal' or `remove' 
        means--
                    ``(A) the transfer of cannabis products from the 
                premises of a producer (or the transfer of such 
                products from the bonded premises of a producer to a 
                non-bonded premises of such producer),
                    ``(B) release of such products from customs 
                custody, or
                    ``(C) smuggling or other unlawful importation of 
                such products into the United States.
            ``(3) Removal price.--The term `removal price' means--
                    ``(A) except as otherwise provided in this 
                paragraph, the price for which the cannabis product is 
                sold in the sale which occurs in connection with the 
                removal of such product,
                    ``(B) in the case of any such sale which is 
                described in section 5903(c), the price determined 
                under such section, and
                    ``(C) if there is no sale which occurs in 
                connection with such removal, the price which would be 
                determined under section 5903(c) if such product were 
                sold at a price which cannot be determined.

``SEC. 5903. LIABILITY AND METHOD OF PAYMENT.

    ``(a) Liability for Tax.--
            ``(1) Original liability.--The producer or importer of any 
        cannabis product shall be liable for the taxes imposed thereon 
        by section 5901.
            ``(2) Transfer of liability.--
                    ``(A) In general.--When cannabis products are 
                transferred, without payment of tax, pursuant to 
                subsection (b) or (c) of section 5904--
                            ``(i) except as provided in clause (ii), 
                        the transferee shall become liable for the tax 
                        upon receipt by the transferee of such 
                        articles, and the transferor shall thereupon be 
                        relieved of their liability for such tax, and
                            ``(ii) in the case of cannabis products 
                        which are released in bond from customs custody 
                        for transfer to the bonded premises of a 
                        producer, the transferee shall become liable 
                        for the tax on such articles upon release from 
                        customs custody, and the importer shall 
                        thereupon be relieved of their liability for 
                        such tax.
                    ``(B) Returned to bond.--All provisions of this 
                chapter applicable to cannabis products in bond shall 
                be applicable to such articles returned to bond upon 
                withdrawal from the market or returned to bond after 
                previous removal for a tax-exempt purpose.
    ``(b) Method of Payment of Tax.--
            ``(1) In general.--
                    ``(A) Taxes paid on basis of return.--The taxes 
                imposed by section 5901 shall be paid on the basis of 
                return. The Secretary shall, by regulations, prescribe 
                the period or the event to be covered by such return 
                and the information to be furnished on such return.
                    ``(B) Application to transferees.--In the case of 
                any transfer to which subsection (a)(2)(A) applies, the 
                tax under section 5901 on the transferee shall (if not 
                otherwise relieved by reason of a subsequent transfer 
                to which such subsection applies) be imposed with 
                respect to the removal of the cannabis product from the 
                bonded premises of the transferee.
                    ``(C) Postponement.--Any postponement under this 
                subsection of the payment of taxes determined at the 
                time of removal shall be conditioned upon the filing of 
                such additional bonds, and upon compliance with such 
                requirements, as the Secretary may prescribe for the 
                protection of the revenue. The Secretary may, by 
                regulations, require payment of tax on the basis of a 
                return prior to removal of the cannabis products where 
                a person defaults in the postponed payment of tax on 
                the basis of a return under this subsection or 
                regulations prescribed thereunder.
                    ``(D) Administration and penalties.--All 
                administrative and penalty provisions of this title, 
                insofar as applicable, shall apply to any tax imposed 
                by section 5901.
            ``(2) Time for payment of taxes.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, in the case of taxes on cannabis 
                products removed during any semimonthly period under 
                bond for deferred payment of tax, the last day for 
                payment of such taxes shall be the 14th day after the 
                last day of such semimonthly period.
                    ``(B) Imported articles.--In the case of cannabis 
                products which are imported into the United States, the 
                following provisions shall apply:
                            ``(i) In general.--The last day for payment 
                        of tax shall be the 14th day after the last day 
                        of the semimonthly period during which the 
                        article is entered into the customs territory 
                        of the United States.
                            ``(ii) Special rule for entry of 
                        warehousing.--Except as provided in clause 
                        (iv), in the case of an entry for warehousing, 
                        the last day for payment of tax shall not be 
                        later than the 14th day after the last day of 
                        the semimonthly period during which the article 
                        is removed from the first such warehouse.
                            ``(iii) Foreign trade zones.--Except as 
                        provided in clause (iv) and in regulations 
                        prescribed by the Secretary, articles brought 
                        into a foreign trade zone shall, 
                        notwithstanding any other provision of law, be 
                        treated for purposes of this subsection as if 
                        such zone were a single customs warehouse.
                            ``(iv) Exception for articles destined for 
                        export.--Clauses (ii) and (iii) shall not apply 
                        to any article which is shown to the 
                        satisfaction of the Secretary to be destined 
                        for export.
                    ``(C) Cannabis products brought into the united 
                states from puerto rico.--In the case of cannabis 
                products which are brought into the United States from 
                Puerto Rico and subject to tax under section 7652, the 
                last day for payment of tax shall be the 14th day after 
                the last day of the semimonthly period during which the 
                article is brought into the United States.
                    ``(D) Special rule where due date falls on 
                saturday, sunday, or holiday.--Notwithstanding section 
                7503, if, but for this subparagraph, the due date under 
                this paragraph would fall on a Saturday, Sunday, or a 
                legal holiday (as defined in section 7503), such due 
                date shall be the immediately preceding day which is 
                not a Saturday, Sunday, or such a holiday.
                    ``(E) Special rule for unlawfully produced cannabis 
                products.--In the case of any cannabis products 
                produced in the United States at any place other than 
                the premises of a producer that has filed the bond and 
                obtained the permit required under this chapter, tax 
                shall be due and payable immediately upon production.
            ``(3) Payment by electronic fund transfer.--Any person who 
        in any 12-month period, ending December 31, was liable for a 
        gross amount equal to or exceeding $5,000,000 in taxes imposed 
        on cannabis products by section 5901 (or section 7652) shall 
        pay such taxes during the succeeding calendar year by 
        electronic fund transfer (as defined in section 5061(e)(2)) to 
        a Federal Reserve Bank. Rules similar to the rules of section 
        5061(e)(3) shall apply to the $5,000,000 amount specified in 
        the preceding sentence.
    ``(c) Determination of Price.--
            ``(1) Constructive sale price.--
                    ``(A) In general.--If an article is sold directly 
                to consumers, sold on consignment, or sold (otherwise 
                than through an arm's length transaction) at less than 
                the fair market price, or if the price for which the 
                article sold cannot be determined, the tax under 
                section 5901(a) shall be computed on the price for 
                which such articles are sold, in the ordinary course of 
                trade, by producers thereof, as determined by the 
                Secretary.
                    ``(B) Arm's length.--
                            ``(i) In general.--For purposes of this 
                        section, a sale is considered to be made under 
                        circumstances otherwise than at arm's length 
                        if--
                                    ``(I) the parties are members of 
                                the same controlled group, whether or 
                                not such control is actually exercised 
                                to influence the sale price,
                                    ``(II) the parties are members of a 
                                family, as defined in section 
                                267(c)(4), or
                                    ``(III) the sale is made pursuant 
                                to special arrangements between a 
                                producer and a purchaser.
                            ``(ii) Controlled groups.--
                                    ``(I) In general.--The term 
                                `controlled group' has the meaning 
                                given to such term by subsection (a) of 
                                section 1563, except that `more than 50 
                                percent' shall be substituted for `at 
                                least 80 percent' each place it appears 
                                in such subsection.
                                    ``(II) Controlled groups which 
                                include nonincorporated persons.--Under 
                                regulations prescribed by the 
                                Secretary, principles similar to the 
                                principles of subclause (I) shall apply 
                                to a group of persons under common 
                                control where one or more of such 
                                persons is not a corporation.
            ``(2) Containers, packing and transportation charges.--In 
        determining, for the purposes of this chapter, the price for 
        which an article is sold, there shall be included any charge 
        for coverings and containers of whatever nature, and any charge 
        incident to placing the article in condition packed ready for 
        shipment, but there shall be excluded the amount of tax imposed 
        by this chapter, whether or not stated as a separate charge. A 
        transportation, delivery, insurance, installation, or other 
        charge (not required by the preceding sentence to be included) 
        shall be excluded from the price only if the amount thereof is 
        established to the satisfaction of the Secretary in accordance 
        with regulations.
            ``(3) Determination of applicable equivalent amounts.--
        Paragraphs (1) and (2) shall apply for purposes of section 
        5901(c) only to the extent that the Secretary determines 
        appropriate.
    ``(d) Partial Payments and Installment Accounts.--
            ``(1) Partial payments.--In the case of--
                    ``(A) a contract for the sale of an article wherein 
                it is provided that the price shall be paid by 
                installments and title to the article sold does not 
                pass until a future date notwithstanding partial 
                payment by installments,
                    ``(B) a conditional sale, or
                    ``(C) a chattel mortgage arrangement wherein it is 
                provided that the sales price shall be paid in 
                installments,
        there shall be paid upon each payment with respect to the 
        article a percentage of such payment equal to the rate of tax 
        in effect on the date such payment is due.
            ``(2) Sales of installment accounts.--If installment 
        accounts, with respect to payments on which tax is being 
        computed as provided in paragraph (1), are sold or otherwise 
        disposed of, then paragraph (1) shall not apply with respect to 
        any subsequent payments on such accounts (other than subsequent 
        payments on returned accounts with respect to which credit or 
        refund is allowable by reason of section 6416(b)(5)), but 
        instead--
                    ``(A) there shall be paid an amount equal to the 
                difference between--
                            ``(i) the tax previously paid on the 
                        payments on such installment accounts, and
                            ``(ii) the total tax which would be payable 
                        if such installment accounts had not been sold 
                        or otherwise disposed of (computed as provided 
                        in paragraph (1)), except that
                    ``(B) if any such sale is pursuant to the order of, 
                or subject to the approval of, a court of competent 
                jurisdiction in a bankruptcy or insolvency proceeding, 
                the amount computed under subparagraph (A) shall not 
                exceed the sum of the amounts computed by multiplying--
                            ``(i) the proportionate share of the amount 
                        for which such accounts are sold which is 
                        allocable to each unpaid installment payment, 
                        by
                            ``(ii) the rate of tax under this chapter 
                        in effect on the date such unpaid installment 
                        payment is or was due.
                The sum of the amounts payable under this subsection in 
                respect of the sale of any article shall not exceed the 
                total tax.

``SEC. 5904. EXEMPTION FROM TAX; TRANSFERS IN BOND.

    ``(a) Exemption From Tax.--Cannabis products on which the internal 
revenue tax has not been paid or determined may, subject to such 
regulations as the Secretary shall prescribe, be withdrawn from the 
bonded premises of any producer in approved containers free of tax and 
not for resale for use--
            ``(1) exclusively in scientific research by a laboratory,
            ``(2) by a proprietor of a cannabis production facility in 
        research, development, or testing (other than consumer testing 
        or other market analysis) of processes, systems, materials, or 
        equipment, relating to cannabis or cannabis operations, under 
        such limitations and conditions as to quantities, use, and 
        accountability as the Secretary may by regulations require for 
        the protection of the revenue, or
            ``(3) by the United States or any governmental agency 
        thereof, any State, any political subdivision of a State, or 
        the District of Columbia, for nonconsumption purposes.
    ``(b) Cannabis Products Transferred or Removed in Bond From 
Domestic Factories and Export Warehouses.--
            ``(1) In general.--Subject to such regulations and under 
        such bonds as the Secretary shall prescribe, a producer or 
        export warehouse proprietor may transfer cannabis products, 
        without payment of tax, to the bonded premises of another 
        producer or export warehouse proprietor, or remove such 
        articles, without payment of tax, for shipment to a foreign 
        country or a possession of the United States, or for 
        consumption beyond the jurisdiction of the internal revenue 
        laws of the United States.
            ``(2) Labeling.--Cannabis products may not be transferred 
        or removed under this subsection unless such products bear such 
        marks, labels, or notices as the Secretary shall by regulations 
        prescribe.
    ``(c) Cannabis Products Released in Bond From Customs Custody.--
Cannabis products imported or brought into the United States may be 
released from customs custody, without payment of tax, for delivery to 
a producer or export warehouse proprietor if such articles are not put 
up in packages, in accordance with such regulations and under such bond 
as the Secretary shall prescribe.
    ``(d) Cannabis Products Exported and Returned.--Cannabis products 
classifiable under item 9801.00.10 of the Harmonized Tariff Schedule of 
the United States (relating to duty on certain articles previously 
exported and returned), as in effect on the date of the enactment of 
the Marijuana Opportunity Reinvestment and Expungement Act, may be 
released from customs custody, without payment of that part of the duty 
attributable to the internal revenue tax for delivery to the original 
producer of such cannabis products or to the export warehouse 
proprietor authorized by such producer to receive such products, in 
accordance with such regulations and under such bond as the Secretary 
shall prescribe. Upon such release such products shall be subject to 
this chapter as if they had not been exported or otherwise removed from 
internal revenue bond.

``SEC. 5905. CREDIT, REFUND, OR DRAWBACK OF TAX.

    ``(a) Credit or Refund.--
            ``(1) In general.--Credit or refund of any tax imposed by 
        this chapter or section 7652 shall be allowed or made (without 
        interest) to the cannabis enterprise on proof satisfactory to 
        the Secretary that the claimant cannabis enterprise has paid 
        the tax on--
                    ``(A) cannabis products withdrawn from the market 
                by the claimant, or
                    ``(B) such products lost (otherwise than by theft) 
                or destroyed, by fire, casualty, or act of God, while 
                in the possession or ownership of the claimant.
            ``(2) Cannabis products lost or destroyed in bond.--
                    ``(A) Extent of loss allowance.--No tax shall be 
                collected in respect of cannabis products lost or 
                destroyed while in bond, except that such tax shall be 
                collected--
                            ``(i) in the case of loss by theft, unless 
                        the Secretary finds that the theft occurred 
                        without connivance, collusion, fraud, or 
                        negligence on the part of the proprietor of the 
                        cannabis production facility, owner, consignor, 
                        consignee, bailee, or carrier, or their 
                        employees or agents,
                            ``(ii) in the case of voluntary 
                        destruction, unless such destruction is carried 
                        out as provided in paragraph (3), and
                            ``(iii) in the case of an unexplained 
                        shortage of cannabis products.
                    ``(B) Proof of loss.--In any case in which cannabis 
                products are lost or destroyed, whether by theft or 
                otherwise, the Secretary may require the proprietor of 
                a cannabis production facility or other person liable 
                for the tax to file a claim for relief from the tax and 
                submit proof as to the cause of such loss. In every 
                case where it appears that the loss was by theft, the 
                burden shall be upon the proprietor of the cannabis 
                production facility or other person responsible for the 
                tax under section 5901 to establish to the satisfaction 
                of the Secretary that such loss did not occur as the 
                result of connivance, collusion, fraud, or negligence 
                on the part of the proprietor of the cannabis 
                production facility, owner, consignor, consignee, 
                bailee, or carrier, or their employees or agents.
                    ``(C) Refund of tax.--In any case where the tax 
                would not be collectible by virtue of subparagraph (A), 
                but such tax has been paid, the Secretary shall refund 
                such tax.
                    ``(D) Limitations.--Except as provided in 
                subparagraph (E), no tax shall be abated, remitted, 
                credited, or refunded under this paragraph where the 
                loss occurred after the tax was determined. The 
                abatement, remission, credit, or refund of taxes 
                provided for by subparagraphs (A) and (C) in the case 
                of loss of cannabis products by theft shall only be 
                allowed to the extent that the claimant is not 
                indemnified against or recompensed in respect of the 
                tax for such loss.
                    ``(E) Applicability.--The provisions of this 
                paragraph shall extend to and apply in respect of 
                cannabis products lost after the tax was determined and 
                before completion of the physical removal of the 
                cannabis products from the bonded premises.
            ``(3) Voluntary destruction.--The proprietor of a cannabis 
        production facility or other persons liable for the tax imposed 
        by this chapter or by section 7652 with respect to any cannabis 
        product in bond may voluntarily destroy such products, but only 
        if such destruction is under such supervision and under such 
        regulations as the Secretary may prescribe.
            ``(4) Limitation.--Any claim for credit or refund of tax 
        under this subsection shall be filed within 6 months after the 
        date of the withdrawal from the market, loss, or destruction of 
        the products to which the claim relates, and shall be in such 
        form and contain such information as the Secretary shall by 
        regulations prescribe.
    ``(b) Drawback of Tax.--There shall be an allowance of drawback of 
tax paid on cannabis products, when shipped from the United States, in 
accordance with such regulations and upon the filing of such bond as 
the Secretary shall prescribe.

                    ``Subchapter B--Occupational Tax

``Sec. 5911. Imposition and rate of tax.
``Sec. 5912. Payment of tax.
``Sec. 5913. Provisions relating to liability for occupational taxes.
``Sec. 5914. Application to State laws.

``SEC. 5911. IMPOSITION AND RATE OF TAX.

    ``(a) In General.--Any person engaged in business as a producer or 
an export warehouse proprietor shall pay a tax of $1,000 per year 
(referred to in this subchapter as an `occupational tax') in respect of 
each premises at which such business is carried on.
    ``(b) Penalty for Failure To Register.--Any person engaged in 
business as a producer or an export warehouse proprietor who willfully 
fails to pay the occupation tax shall be fined not more than $5,000, or 
imprisoned not more than 2 years, or both, for each such offense.

``SEC. 5912. PAYMENT OF TAX.

    ``(a) Condition Precedent to Carrying on Business.--No person shall 
be engaged in or carry on any trade or business subject to the 
occupational tax until such person has paid such tax.
    ``(b) Computation.--
            ``(1) In general.--The occupational tax shall be imposed--
                    ``(A) as of on the first day of July in each year, 
                or
                    ``(B) on commencing any trade or business on which 
                such tax is imposed.
            ``(2) Period.--In the case of a tax imposed under 
        subparagraph (A) of paragraph (1), the occupational tax shall 
        be reckoned for 1 year, and in the case of subparagraph (B) of 
        such paragraph, it shall be reckoned proportionately, from the 
        first day of the month in which the liability to such tax 
        commenced, to and including the 30th day of June following.
    ``(c) Method of Payment.--
            ``(1) Payment by return.--The occupational tax shall be 
        paid on the basis of a return under such regulations as the 
        Secretary shall prescribe.
            ``(2) Stamp denoting payment of tax.--After receiving a 
        properly executed return and remittance of any occupational 
        tax, the Secretary shall issue to the taxpayer an appropriate 
        stamp as a receipt denoting payment of the tax. This paragraph 
        shall not apply in the case of a return covering liability for 
        a past period.

``SEC. 5913. PROVISIONS RELATING TO LIABILITY FOR OCCUPATIONAL TAXES.

    ``(a) Partners.--Any number of persons doing business in 
partnership at any one place shall be required to pay a single 
occupational tax.
    ``(b) Different Businesses of Same Ownership and Location.--
Whenever more than one of the pursuits or occupations described in this 
subchapter are carried on in the same place by the same person at the 
same time, except as otherwise provided in this subchapter, the 
occupational tax shall be paid for each according to the rates 
severally prescribed.
    ``(c) Businesses in More Than One Location.--
            ``(1) Liability for tax.--The payment of the occupational 
        tax shall not exempt from an additional occupational tax the 
        person carrying on a trade or business in any other place than 
        that stated in the records of the Internal Revenue Service.
            ``(2) Storage.--Nothing contained in paragraph (1) shall 
        require imposition of an occupational tax for the storage of 
        cannabis products at a location other than the place where such 
        products are sold or offered for sale.
            ``(3) Place.--
                    ``(A) In general.--For purposes of this section, 
                the term `place' means the entire office, plant or area 
                of the business in any one location under the same 
                proprietorship.
                    ``(B) Divisions.--For purposes of this paragraph, 
                any passageways, streets, highways, rail crossings, 
                waterways, or partitions dividing the premises shall 
                not be deemed sufficient separation to require an 
                additional occupational tax, if the various divisions 
                are otherwise contiguous.
    ``(d) Death or Change of Location.--
            ``(1) In general.--In addition to the person who has paid 
        the occupational tax for the carrying on of any business at any 
        place, any person described in paragraph (2) may secure the 
        right to carry on, without incurring any additional 
        occupational tax, the same business at the same place for the 
        remainder of the taxable period for which the occupational tax 
        was paid.
            ``(2) Eligible persons.--The persons described in this 
        paragraph are the following:
                    ``(A) The surviving spouse or child, or executor or 
                administrator or other legal representative, of a 
                deceased taxpayer.
                    ``(B) A husband or wife succeeding to the business 
                of his or her living spouse.
                    ``(C) A receiver or trustee in bankruptcy, or an 
                assignee for benefit of creditors.
                    ``(D) The partner or partners remaining after death 
                or withdrawal of a member of a partnership.
            ``(3) Change of location.--When any person moves to any 
        place other than the place for which occupational tax was paid 
        for the carrying on of any business, such person may secure the 
        right to carry on, without incurring additional occupational 
        tax, the same business at the new location for the remainder of 
        the taxable period for which the occupational tax was paid. To 
        secure the right to carry on the business without incurring 
        additional occupational tax, the successor, or the person 
        relocating their business, must register the succession or 
        relocation with the Secretary in accordance with regulations 
        prescribed by the Secretary.
    ``(e) Federal Agencies or Instrumentalities.--Any tax imposed by 
this subchapter shall apply to any agency or instrumentality of the 
United States unless such agency or instrumentality is granted by 
statute a specific exemption from such tax.

``SEC. 5914. APPLICATION TO STATE LAWS.

    ``The payment of any tax imposed by this subchapter for carrying on 
any trade or business shall not be held to--
            ``(1) exempt any person from any penalty or punishment 
        provided by the laws of any State for carrying on such trade or 
        business within such State, or in any manner to authorize the 
        commencement or continuance of such trade or business contrary 
        to the laws of such State or in places prohibited by municipal 
        law, or
            ``(2) prohibit any State from placing a duty or tax on the 
        same trade or business, for State or other purposes.

                    ``Subchapter C--Bond and Permits

``Sec. 5921. Establishment and bond.
``Sec. 5922. Application for permit.
``Sec. 5923. Permit.

``SEC. 5921. ESTABLISHMENT AND BOND.

    ``(a) Prohibition on Production Outside of Bonded Cannabis 
Production Facility.--
            ``(1) In general.--Except as authorized by the Secretary or 
        on the bonded premises of a cannabis production facility duly 
        authorized to produce cannabis products according to law, no 
        cannabis product may planted, cultivated, harvested, grown, 
        manufactured, produced, compounded, converted, processed, 
        prepared, or packaged in any building or on any premises.
            ``(2) Authorized producers only.--No person other than a 
        producer which has filed the bond required under subsection (b) 
        and received a permit described in section 5923 may produce any 
        cannabis product.
            ``(3) Personal use exception.--This subsection shall not 
        apply with respect the activities of an individual who is not 
        treated as a producer by reason of section 5902(b)(2)(B).
    ``(b) Bond.--
            ``(1) When required.--Every person, before commencing 
        business as a producer or an export warehouse proprietor, shall 
        file such bond, conditioned upon compliance with this chapter 
        and regulations issued thereunder, in such form, amount, and 
        manner as the Secretary shall by regulation prescribe. A new or 
        additional bond may be required whenever the Secretary 
        considers such action necessary for the protection of the 
        revenue.
            ``(2) Approval or disapproval.--No person shall engage in 
        such business until he receives notice of approval of such 
        bond. A bond may be disapproved, upon notice to the principal 
        on the bond, if the Secretary determines that the bond is not 
        adequate to protect the revenue.
            ``(3) Cancellation.--Any bond filed hereunder may be 
        canceled, upon notice to the principal on the bond, whenever 
        the Secretary determines that the bond no longer adequately 
        protects the revenue.

``SEC. 5922. APPLICATION FOR PERMIT.

    ``(a) In General.--Every person, before commencing business as a 
cannabis enterprise, and at such other time as the Secretary shall by 
regulation prescribe, shall make application for the permit provided 
for in section 5923. The application shall be in such form as the 
Secretary shall prescribe and shall set forth, truthfully and 
accurately, the information called for on the form. Such application 
may be rejected and the permit denied if the Secretary, after notice 
and opportunity for hearing, finds that--
            ``(1) the premises on which it is proposed to conduct the 
        cannabis enterprise will not be adequate to protect the revenue 
        after commencing operations, or
            ``(2) such person (including, in the case of a corporation, 
        any officer, director, or principal stockholder and, in the 
        case of a partnership, any partner) has failed to disclose any 
        material information required or made any materially false 
        statement in the application therefor.

``SEC. 5923. PERMIT.

    ``(a) Issuance.--A person shall not engage in business as a 
cannabis enterprise without a permit to engage in such business. Such 
permit, conditioned upon compliance with this chapter and regulations 
issued thereunder, shall be issued in such form and in such manner as 
the Secretary shall by regulation prescribe. A new permit may be 
required at such other time as the Secretary shall by regulation 
prescribe.
    ``(b) Suspension or Revocation.--
            ``(1) Show cause hearing.--If the Secretary has reason to 
        believe that any person holding a permit--
                    ``(A) has not in good faith complied with this 
                chapter, or with any other provision of this title 
                involving intent to defraud,
                    ``(B) has violated the conditions of such permit,
                    ``(C) has failed to disclose any material 
                information required or made any material false 
                statement in the application for such permit, or
                    ``(D) has failed to maintain their premises in such 
                manner as to protect the revenue,
        the Secretary shall issue an order, stating the facts charged, 
        citing such person to show cause why their permit should not be 
        suspended or revoked.
            ``(2) Action following hearing.--If, after hearing, the 
        Secretary finds that such person has not shown cause why their 
        permit should not be suspended or revoked, such permit shall be 
        suspended for such period as the Secretary deems proper or 
        shall be revoked.
    ``(c) Information Reporting.--The Secretary may require--
            ``(1) information reporting by any person issued a permit 
        under this section, and
            ``(2) information reporting by such other persons as the 
        Secretary deems necessary to carry out this chapter.
    ``(d) Inspection or Disclosure of Information.--For rules relating 
to inspection and disclosure of returns and return information, see 
section 6103(o).

                       ``Subchapter D--Operations

``Sec. 5931. Inventories, reports, and records.
``Sec. 5932. Packaging and labeling.
``Sec. 5933. Purchase, receipt, possession, or sale of cannabis 
                            products after removal.
``Sec. 5934. Restrictions relating to marks, labels, notices, and 
                            packages.
``Sec. 5935. Restriction on importation of previously exported cannabis 
                            products.

``SEC. 5931. INVENTORIES, REPORTS, AND RECORDS.

    ``Every cannabis enterprise shall--
            ``(1) make a true and accurate inventory at the time of 
        commencing business, at the time of concluding business, and at 
        such other times, in such manner and form, and to include such 
        items, as the Secretary shall by regulation prescribe, with 
        such inventories to be subject to verification by any internal 
        revenue officer,
            ``(2) make reports containing such information, in such 
        form, at such times, and for such periods as the Secretary 
        shall by regulation prescribe, and
            ``(3) keep such records in such manner as the Secretary 
        shall by regulation prescribe, with such records to be 
        available for inspection by any internal revenue officer during 
        business hours.

``SEC. 5932. PACKAGING AND LABELING.

    ``(a) Packages.--All cannabis products shall, before removal, be 
put up in such packages as the Secretary shall by regulation prescribe.
    ``(b) Marks, Labels, and Notices.--Every package of cannabis 
products shall, before removal, bear the marks, labels, and notices if 
any, that the Secretary by regulation prescribes.
    ``(c) Lottery Features.--No certificate, coupon, or other device 
purporting to be or to represent a ticket, chance, share, or an 
interest in, or dependent on, the event of a lottery shall be contained 
in, attached to, or stamped, marked, written, or printed on any package 
of cannabis products.
    ``(d) Indecent or Immoral Material Prohibited.--No indecent or 
immoral picture, print, or representation shall be contained in, 
attached to, or stamped, marked, written, or printed on any package of 
cannabis products.
    ``(e) Exceptions.--Subject to regulations prescribed by the 
Secretary, cannabis products may be exempted from subsections (a) and 
(b) if such products are--
            ``(1) for experimental purposes, or
            ``(2) transferred to the bonded premises of another 
        producer or export warehouse proprietor or released in bond 
        from customs custody for delivery to a producer.

``SEC. 5933. PURCHASE, RECEIPT, POSSESSION, OR SALE OF CANNABIS 
              PRODUCTS AFTER REMOVAL.

    ``(a) Restriction.--No person shall--
            ``(1) with intent to defraud the United States, purchase, 
        receive, possess, offer for sale, or sell or otherwise dispose 
        of, after removal, any cannabis products--
                    ``(A) upon which the tax has not been paid or 
                determined in the manner and at the time prescribed by 
                this chapter or regulations thereunder, or
                    ``(B) which, after removal without payment of tax 
                pursuant to section 5904(a), have been diverted from 
                the applicable purpose or use specified in that 
                section,
            ``(2) with intent to defraud the United States, purchase, 
        receive, possess, offer for sale, or sell or otherwise dispose 
        of, after removal, any cannabis products which are not put up 
        in packages as required under section 5932 or which are put up 
        in packages not bearing the marks, labels, and notices, as 
        required under such section, or
            ``(3) otherwise than with intent to defraud the United 
        States, purchase, receive, possess, offer for sale, or sell or 
        otherwise dispose of, after removal, any cannabis products 
        which are not put up in packages as required under section 5932 
        or which are put up in packages not bearing the marks, labels, 
        and notices, as required under such section.
    ``(b) Exception.--Paragraph (3) of subsection (a) shall not prevent 
the sale or delivery of cannabis products directly to consumers from 
proper packages, nor apply to such articles when so sold or delivered.
    ``(c) Liability to Tax.--Any person who possesses cannabis products 
in violation of paragraph (1) or (2) of subsection (a) shall be liable 
for a tax equal to the tax on such articles.

``SEC. 5934. RESTRICTIONS RELATING TO MARKS, LABELS, NOTICES, AND 
              PACKAGES.

    ``No person shall, with intent to defraud the United States, 
destroy, obliterate, or detach any mark, label, or notice prescribed or 
authorized, by this chapter or regulations thereunder, to appear on, or 
be affixed to, any package of cannabis products before such package is 
emptied.

``SEC. 5935. RESTRICTION ON IMPORTATION OF PREVIOUSLY EXPORTED CANNABIS 
              PRODUCTS.

    ``(a) Export Labeled Cannabis Products.--
            ``(1) In general.--Cannabis products produced in the United 
        States and labeled for exportation under this chapter--
                    ``(A) may be transferred to or removed from the 
                premises of a producer or an export warehouse 
                proprietor only if such articles are being transferred 
                or removed without tax in accordance with section 5904,
                    ``(B) may be imported or brought into the United 
                States, after their exportation, only if such articles 
                either are eligible to be released from customs custody 
                with the partial duty exemption provided in section 
                5904(d) or are returned to the original producer of 
                such article as provided in section 5904(c), and
                    ``(C) may not be sold or held for sale for domestic 
                consumption in the United States unless such articles 
                are removed from their export packaging and repackaged 
                by the original producer into new packaging that does 
                not contain an export label.
            ``(2) Alterations by persons other than original 
        producer.--This section shall apply to articles labeled for 
        export even if the packaging or the appearance of such 
        packaging to the consumer of such articles has been modified or 
        altered by a person other than the original producer so as to 
        remove or conceal or attempt to remove or conceal (including by 
        the placement of a sticker over) any export label.
            ``(3) Exports include shipments to puerto rico.--For 
        purposes of this section, section 5904(d), section 5941, and 
        such other provisions as the Secretary may specify by 
        regulations, references to exportation shall be treated as 
        including a reference to shipment to the Commonwealth of Puerto 
        Rico.
    ``(b) Export Label.--For purposes of this section, an article is 
labeled for export or contains an export label if it bears the mark, 
label, or notice required under section 5904(b).

                       ``Subchapter E--Penalties

``Sec. 5941. Civil penalties.
``Sec. 5942. Criminal penalties.

``SEC. 5941. CIVIL PENALTIES.

    ``(a) Omitting Things Required or Doing Things Forbidden.--Whoever 
willfully omits, neglects, or refuses to comply with any duty imposed 
upon them by this chapter, or to do, or cause to be done, any of the 
things required by this chapter, or does anything prohibited by this 
chapter, shall in addition to any other penalty provided in this title, 
be liable to a penalty of $10,000, to be recovered, with costs of suit, 
in a civil action, except where a penalty under subsection (b) or (c) 
or under section 6651 or 6653 or part II of subchapter A of chapter 68 
may be collected from such person by assessment.
    ``(b) Failure To Pay Tax.--Whoever fails to pay any tax imposed by 
this chapter at the time prescribed by law or regulations, shall, in 
addition to any other penalty provided in this title, be liable to a 
penalty of 10 percent of the tax due but unpaid.
    ``(c) Sale of Cannabis or Cannabis Products for Export.--
            ``(1) Every person who sells, relands, or receives within 
        the jurisdiction of the United States any cannabis products 
        which have been labeled or shipped for exportation under this 
        chapter,
            ``(2) every person who sells or receives such relanded 
        cannabis products, and
            ``(3) every person who aids or abets in such selling, 
        relanding, or receiving,
shall, in addition to the tax and any other penalty provided in this 
title, be liable for a penalty equal to the greater of $10,000 or 10 
times the amount of the tax imposed by this chapter. All cannabis 
products relanded within the jurisdiction of the United States shall be 
forfeited to the United States and destroyed. All vessels, vehicles, 
and aircraft used in such relanding or in removing such cannabis 
products from the place where relanded, shall be forfeited to the 
United States.
    ``(d) Applicability of Section 6665.--The penalties imposed by 
subsections (b) and (c) shall be assessed, collected, and paid in the 
same manner as taxes, as provided in section 6665(a).
    ``(e) Cross References.--For penalty for failure to make deposits 
or for overstatement of deposits, see section 6656.

``SEC. 5942. CRIMINAL PENALTIES.

    ``(a) Fraudulent Offenses.--Whoever, with intent to defraud the 
United States--
            ``(1) engages in business as a cannabis enterprise without 
        filing the application and obtaining the permit where required 
        by this chapter or regulations thereunder,
            ``(2) fails to keep or make any record, return, report, or 
        inventory, or keeps or makes any false or fraudulent record, 
        return, report, or inventory, required by this chapter or 
        regulations thereunder,
            ``(3) refuses to pay any tax imposed by this chapter, or 
        attempts in any manner to evade or defeat the tax or the 
        payment thereof,
            ``(4) sells or otherwise transfers, contrary to this 
        chapter or regulations thereunder, any cannabis products 
        subject to tax under this chapter, or
            ``(5) purchases, receives, or possesses, with intent to 
        redistribute or resell, any cannabis product--
                    ``(A) upon which the tax has not been paid or 
                determined in the manner and at the time prescribed by 
                this chapter or regulations thereunder, or
                    ``(B) which, without payment of tax pursuant to 
                section 5904, have been diverted from the applicable 
                purpose or use specified in that section,
shall, for each such offense, be fined not more than $10,000, or 
imprisoned not more than 5 years, or both.
    ``(b) Liability to Tax.--Any person who possesses cannabis products 
in violation of subsection (a) shall be liable for a tax equal to the 
tax on such articles.''.
    (c) Study.--Not later than 2 years after the date of the enactment 
of this Act, and every 5 years thereafter, the Secretary of the 
Treasury, or the Secretary's delegate, shall--
            (1) conduct a study concerning the characteristics of the 
        cannabis industry, including the number of persons operating 
        cannabis enterprises at each level of such industry, the volume 
        of sales, the amount of tax collected each year, and the areas 
        of evasion, and
            (2) submit to Congress recommendations to improve the 
        regulation of the industry and the administration of the 
        related tax.
    (d) Annual Reports Regarding Determination of Applicable Rates.--
Not later than 6 months before the beginning of each calendar year to 
which section 5901(a)(2) of the Internal Revenue Code of 1986 (as added 
by this section) applies, the Secretary of the Treasury, or the 
Secretary's delegate, shall make publicly available a detailed 
description of the methodology which the Secretary anticipates using to 
determine the applicable rate per ounce and the applicable rate per 
gram which will apply for such calendar year under section 5901(c)(2) 
of such Code.
    (e) Conforming Amendments.--
            (1) Section 6103(o)(1)(A) of the Internal Revenue Code of 
        1986 is amended by striking ``and firearms'' and inserting 
        ``firearms, and cannabis products''.
            (2) The table of chapters for subtitle E of such Code is 
        amended by adding at the end the following new item:

                   ``Chapter 56. Cannabis Products''.

            (3) The table of sections for subchapter A of chapter 98 of 
        such Code is amended by adding at the end the following new 
        item:

``Sec. 9512. Establishment of Opportunity Trust Fund.''.
    (f) Effective Date.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by this section shall apply to 
        removals, and applications for permits under section 5922 of 
        the Internal Revenue Code of 1986 (as added by subsection (b)), 
        after 180 days after the date of the enactment of this Act.
            (2) Establishment of opportunity trust fund.--The amendment 
        made by subsection (a) shall take effect on the date of the 
        enactment of this Act.

SEC. 6. OPPORTUNITY TRUST FUND PROGRAMS.

    (a) Cannabis Justice Office; Community Reinvestment Grant 
Program.--
            (1) Cannabis justice office.--Part A of title I of the 
        Omnibus Crime Control and Safe Streets Act of 1968 (34 U.S.C. 
        10101 et seq.) is amended by inserting after section 109 the 
        following:

``SEC. 110. CANNABIS JUSTICE OFFICE.

    ``(a) Establishment.--There is established within the Office of 
Justice Programs a Cannabis Justice Office.
    ``(b) Director.--The Cannabis Justice Office shall be headed by a 
Director who shall be appointed by the Assistant Attorney General for 
the Office of Justice Programs. The Director shall report to the 
Assistant Attorney General for the Office of Justice Programs. The 
Director shall award grants and may enter into compacts, cooperative 
agreements, and contracts on behalf of the Cannabis Justice Office. The 
Director may not engage in any employment other than that of serving as 
the Director, nor may the Director hold any office in, or act in any 
capacity for, any organization, agency, or institution with which the 
Office makes any contract or other arrangement.
    ``(c) Employees.--
            ``(1) In general.--The Director shall employ as many full-
        time employees as are needed to carry out the duties and 
        functions of the Cannabis Justice Office under subsection (d). 
        Such employees shall be exclusively assigned to the Cannabis 
        Justice Office.
            ``(2) Initial hires.--Not later than 6 months after the 
        date of enactment of this section, the Director shall--
                    ``(A) hire no less than one-third of the total 
                number of employees of the Cannabis Justice Office; and
                    ``(B) no more than one-half of the employees 
                assigned to the Cannabis Justice Office by term 
                appointment that may after 2 years be converted to 
                career appointment.
            ``(3) Legal counsel.--At least one employee hired for the 
        Cannabis Justice Office shall serve as legal counsel to the 
        Director and shall provide counsel to the Cannabis Justice 
        Office.
    ``(d) Duties and Functions.--The Cannabis Justice Office is 
authorized to--
            ``(1) administer the Community Reinvestment Grant Program; 
        and
            ``(2) perform such other functions as the Assistant 
        Attorney General for the Office of Justice Programs may 
        delegate, that are consistent with the statutory obligations of 
        this section.''.
            (2) Community reinvestment grant program.--Title I of the 
        Omnibus Crime Control and Safe Streets Act of 1968 (34 U.S.C. 
        et seq.) is amended by adding at the end the following:

            ``PART PP--COMMUNITY REINVESTMENT GRANT PROGRAM

``SEC. 3056. AUTHORIZATION.

    ``(a) In General.--The Director of the Cannabis Justice Office 
shall establish and carry out a grant program, known as the `Community 
Reinvestment Grant Program', to provide eligible entities with funds to 
administer services for individuals adversely impacted by the War on 
Drugs, including--
            ``(1) job training;
            ``(2) reentry services;
            ``(3) legal aid for civil and criminal cases, including 
        expungement of cannabis convictions;
            ``(4) literacy programs;
            ``(5) youth recreation or mentoring programs; and
            ``(6) health education programs.
    ``(b) Substance Use Disorder Services.--The Director, in 
consultation with the Secretary of Health and Human Services, shall 
provide eligible entities with funds to administer substance use 
disorder services for individuals adversely impacted by the War on 
Drugs or connect patients with substance use disorder services. Also 
eligible for such services are individuals who have been arrested for 
or convicted of the sale, possession, use, manufacture, or cultivation 
of a controlled substance other than cannabis (except for a conviction 
involving distribution to a minor).

``SEC. 3057. FUNDING FROM OPPORTUNITY TRUST FUND.

    ``The Director shall carry out the program under this part using 
funds made available under section 9512(c)(1) and (2) of the Internal 
Revenue Code.

``SEC. 3058. DEFINITIONS.

    ``In this part:
            ``(1) The term `cannabis conviction' means a conviction, or 
        adjudication of juvenile delinquency, for a cannabis offense 
        (as such term is defined in section 13 of the Marijuana 
        Opportunity Reinvestment and Expungement Act).
            ``(2) The term `eligible entity' means a nonprofit 
        organization, as defined in section 501(c)(3) of the Internal 
        Revenue Code, that is representative of a community or a 
        significant segment of a community with experience in providing 
        relevant services to individuals adversely impacted by the War 
        on Drugs in that community.
            ``(3) The term `individuals adversely impacted by the War 
        on Drugs' has the meaning given that term in section 6 of the 
        Marijuana Opportunity Reinvestment and Expungement Act.''.
    (b) Cannabis Restorative Opportunity Program; Equitable Licensing 
Grant Program.--
            (1) Cannabis restorative opportunity program.--The 
        Administrator of the Small Business Administration shall 
        establish and carry out a program, to be known as the 
        ``Cannabis Restorative Opportunity Program'', to provide loans 
        and technical assistance under section 7(m) of the Small 
        Business Act (15 U.S.C. 636(m)) to assist small business 
        concerns owned and controlled by socially and economically 
        disadvantaged individuals that operate in eligible States or 
        localities.
            (2) Equitable licensing grant program.--The Administrator 
        of the Small Business Administration shall establish and carry 
        out a grant program, to be known as the ``Equitable Licensing 
        Grant Program'', to provide any eligible State or locality 
        funds to develop and implement equitable cannabis licensing 
        programs that minimize barriers to cannabis licensing and 
        employment for individuals adversely impacted by the War on 
        Drugs, provided that each grantee includes in its cannabis 
        licensing program at least four of the following elements:
                    (A) A waiver of cannabis license application fees 
                for individuals who report an income below 250 percent 
                of the Federal Poverty Level for at least 5 of the past 
                10 years and who are first-time applicants for a 
                cannabis license.
                    (B) A prohibition on the denial of a cannabis 
                license based on a conviction for a cannabis offense 
                that took place prior to State legalization of cannabis 
                or the date of enactment of this Act, as appropriate.
                    (C) A prohibition on restrictions for licensing 
                relating to criminal convictions except with respect to 
                a criminal conviction related to owning and operating a 
                business.
                    (D) A prohibition on cannabis license holders 
                engaging in suspicionless cannabis drug testing of 
                their prospective or current employees, except with 
                respect to drug testing for safety-sensitive positions 
                required under part 40 of title 49, Code of Federal 
                Regulations.
                    (E) The establishment of a cannabis licensing board 
                that is reflective of the racial, ethnic, economic, and 
                gender composition of the eligible State or locality, 
                to serve as an oversight body of the equitable 
                licensing program.
            (3) Definitions.--In this subsection:
                    (A) Eligible state or locality.--The term 
                ``eligible State or locality'' means a State or 
                locality that has taken steps to--
                            (i) create an automatic process, at no cost 
                        to the individual, for the expungement, 
                        destruction, or sealing of criminal records for 
                        cannabis offenses; and
                            (ii) eliminate violations or other 
                        penalties for persons under parole, probation, 
                        pre-trial, or other State or local criminal 
                        supervision for a cannabis offense.
                    (B) Individual adversely impacted by the war on 
                drugs.--The term ``individual adversely impacted by the 
                War on Drugs'' means an individual--
                            (i) who reports an income below 250 percent 
                        of the Federal Poverty Level for at least 5 of 
                        the past 10 years; and
                            (ii) who has been arrested for or convicted 
                        of the sale, possession, use, manufacture, or 
                        cultivation of cannabis (except for a 
                        conviction involving distribution to a minor), 
                        or whose parent, sibling, spouse, or child has 
                        been arrested for or convicted of such an 
                        offense.
                    (C) Small business concern owned and controlled by 
                socially and economically disadvantaged individuals.--
                The term ``small business concern owned and controlled 
                by socially and economically disadvantaged 
                individuals'' has the meaning given in section 
                8(d)(3)(C) of the Small Business Act (15 U.S.C. 
                637(d)(3)(C)).
                    (D) State.--The term ``State'' means each of the 
                several States, the District of Columbia, Puerto Rico, 
                any territory or possession of the United States, and 
                any Indian Tribe (as defined in section 201 of Public 
                Law 90-294 (25 U.S.C. 1301) (commonly known as the 
                ``Indian Civil Rights Act of 1968'')).
    (c) Study on Programs.--
            (1) GAO study.--The Comptroller General of the United 
        States, in consultation with the Administrator of the Small 
        Business Administration, shall conduct an annual study on the 
        individuals and entities receiving assistance under the 
        Cannabis Restorative Opportunity and Equitable Licensing 
        Programs. This study shall include the types of assistance by 
        state, and a description of the efforts by the Small Business 
        Administration to increase access to capital for cannabis-
        related small business concerns owned and controlled by 
        socially and economically disadvantaged individuals, 
        individuals adversely impacted by the War on Drugs, as well as 
        the racial, ethnic, economic and gender composition of the 
        eligible State or locality.
            (2) Report.--Not later than 1 year after the date of 
        enactment of this Act, the Comptroller General of the United 
        States shall submit a report on the results of the study 
        conducted under paragraph (1) to--
                    (A) the Committee on Small Business of the House of 
                Representatives;
                    (B) the Committee on Small Business and 
                Entrepreneurship of the Senate;
                    (C) the Committee on the Judiciary of the House of 
                Representatives; and
                    (D) the Committee on the Judiciary of the Senate.

SEC. 7. AVAILABILITY OF SMALL BUSINESS ADMINISTRATION PROGRAMS AND 
              SERVICES TO CANNABIS-RELATED LEGITIMATE BUSINESSES AND 
              SERVICE PROVIDERS.

    (a) Definitions Relating to Cannabis-Related Legitimate Businesses 
and Service Providers.--Section 3 of the Small Business Act (15 U.S.C. 
632) is amended by adding at the end the following new subsection:
    ``(gg) Cannabis-Related Legitimate Businesses and Service 
Providers.--In this Act:
            ``(1) Cannabis.--The term `cannabis'--
                    ``(A) means--
                            ``(i) all parts of the plant Cannabis 
                        sativa L., whether growing or not;
                            ``(ii) the seeds thereof;
                            ``(iii) the resin extracted from any part 
                        of such plant; and
                            ``(iv) every compound, manufacture, salt, 
                        derivative, mixture, or preparation of such 
                        plant, its seeds or resin; and
                    ``(B) does not include--
                            ``(i) hemp, as defined in section 297A of 
                        the Agricultural Marketing Act of 1946;
                            ``(ii) the mature stalks of such plant, 
                        fiber produced from such stalks, oil or cake 
                        made from the seeds of such plant, any other 
                        compound, manufacture, salt, derivative, 
                        mixture, or preparation of such mature stalks 
                        (except the resin extracted therefrom), fiber, 
                        oil, or cake, or the sterilized seed of such 
                        plant which is incapable of germination; or
                            ``(iii) any drug product approved under 
                        section 505 of the Federal Food, Drug, and 
                        Cosmetic Act, or biological product licensed 
                        under section 351 of the Public Health Service 
                        Act.
            ``(2) Cannabis-related legitimate business.--The term 
        `cannabis-related legitimate business' means a manufacturer, 
        producer, or any person or company that is a small business 
        concern and that--
                    ``(A) engages in any activity described in 
                subparagraph (B) pursuant to a law established by a 
                State or a political subdivision of a State, as 
                determined by such State or political subdivision; and
                    ``(B) participates in any business or organized 
                activity that involves handling cannabis or cannabis 
                products, including cultivating, producing, 
                manufacturing, selling, transporting, displaying, 
                dispensing, distributing, or purchasing cannabis or 
                cannabis products.
            ``(3) Service provider.--The term `service provider'--
                    ``(A) means a business, organization, or other 
                person that--
                            ``(i) sells goods or services to a 
                        cannabis-related legitimate business; or
                            ``(ii) provides any business services, 
                        including the sale or lease of real or any 
                        other property, legal or other licensed 
                        services, or any other ancillary service, 
                        relating to cannabis; and
                    ``(B) does not include a business, organization, or 
                other person that participates in any business or 
                organized activity that involves handling cannabis or 
                cannabis products, including cultivating, producing, 
                manufacturing, selling, transporting, displaying, 
                dispensing, distributing, or purchasing cannabis or 
                cannabis products.''.
    (b) Small Business Development Centers.--Section 21(c) of the Small 
Business Act (15 U.S.C. 648(c)) is amended by adding at the end the 
following new paragraph:
            ``(9) Services for cannabis-related legitimate businesses 
        and service providers.--A small business development center may 
        not decline to provide services to an otherwise eligible small 
        business concern under this section solely because such concern 
        is a cannabis-related legitimate business or service 
        provider.''.
    (c) Women's Business Centers.--Section 29 of the Small Business Act 
(15 U.S.C. 656) is amended by adding at the end the following new 
subsection:
    ``(p) Services for Cannabis-Related Legitimate Businesses and 
Service Providers.--A women's business center may not decline to 
provide services to an otherwise eligible small business concern under 
this section solely because such concern is a cannabis-related 
legitimate business or service provider.''.
    (d) Score.--Section 8(b)(1)(B) of the Small Business Act (15 U.S.C. 
637(b)(1)(B)) is amended by adding at the end the following new 
sentence: ``The head of the SCORE program established under this 
subparagraph may not decline to provide services to an otherwise 
eligible small business concern solely because such concern is a 
cannabis-related legitimate business or service provider.''.
    (e) Veteran Business Outreach Centers.--Section 32 of the Small 
Business Act (15 U.S.C. 657b) is amended by adding at the end the 
following new subsection:
    ``(h) Services for Cannabis-Related Legitimate Businesses and 
Service Providers.--A Veteran Business Outreach Center may not decline 
to provide services to an otherwise eligible small business concern 
under this section solely because such concern is a cannabis-related 
legitimate business or service provider.''.
    (f) Section 7(a) Loans.--Section 7(a) of the Small Business Act (15 
U.S.C. 636(a)) is amended by adding at the end the following new 
paragraph:
            ``(38) Loans to cannabis-related legitimate businesses and 
        service providers.--The Administrator may not decline to 
        provide a guarantee for a loan under this subsection, and a 
        lender may not decline to make a loan under this subsection, to 
        an otherwise eligible small business concern solely because 
        such concern is a cannabis-related legitimate business or 
        service provider.''.
    (g) Disaster Loans.--Section 7(b) of the Small Business Act (15 
U.S.C. 636(b)) is amended by inserting after paragraph (15) the 
following new paragraph:
            ``(16) Assistance to cannabis-related legitimate businesses 
        and service providers.--The Administrator may not decline to 
        provide assistance under this subsection to an otherwise 
        eligible small business concern solely because such concern is 
        a cannabis-related legitimate business or service provider.''.
    (h) Microloans.--Section 7(m) of the Small Business Act (15 U.S.C. 
636(m)) is amended by adding at the end the following new paragraph:
            ``(14) Assistance to cannabis-related legitimate businesses 
        and service providers.--The Administrator may not decline to 
        make a loan or a grant under this subsection, and an eligible 
        intermediary may not decline to provide assistance under this 
        subsection to an otherwise eligible borrower, eligible 
        intermediary, or eligible nonprofit entity (as applicable) 
        solely because such borrower, intermediary, or nonprofit entity 
        is a cannabis-related legitimate business or service 
        provider.''.
    (i) Small Business Investment Company Debentures to Finance 
Cannabis-Related Legitimate Businesses and Service Providers.--Part A 
of title III of the Small Business Investment Act of 1958 (15 U.S.C. 
681 et seq.) is amended by adding at the end the following new section:

``SEC. 321. DEBENTURES TO FINANCE CANNABIS-RELATED LEGITIMATE 
              BUSINESSES AND SERVICE PROVIDERS.

    ``(a) Guarantees.--The Administrator may not decline to purchase or 
guarantee a debenture made under this title to an otherwise eligible 
small business investment company solely because such small business 
investment company provides financing to an entity that is a cannabis-
related legitimate business or service provider (as defined in section 
7(a)(38) of the Small Business Act).
    ``(b) Other Assistance.--A small business investment company may 
not decline to provide assistance under this title to an otherwise 
eligible small business concern solely because such small business 
concern is a cannabis-related legitimate business or service provider 
(as defined in section 7(a)(38) of the Small Business Act).''.
    (j) State or Local Development Company Loans.--Title V of the Small 
Business Investment Act of 1958 (15 U.S.C. 695 et seq.) is amended by 
adding at the end the following new section:

``SEC. 511. LOANS TO FINANCE CANNABIS-RELATED LEGITIMATE BUSINESSES AND 
              SERVICE PROVIDERS.

    ``(a) Loans and Loan Guarantees.--The Administrator may not decline 
to make or provide a guarantee for a loan under this title to an 
otherwise eligible qualified State or local development company solely 
because such qualified State or local development company provides 
financing to an entity that is a cannabis-related legitimate business 
or service provider (as defined in section 7(a)(38) of the Small 
Business Act).
    ``(b) Other Assistance.--A qualified State or local development 
company may not decline to provide assistance under this title to an 
otherwise eligible small business concern solely because such small 
business concern is a cannabis-related legitimate business or service 
provider (as defined in section 7(a)(38) of the Small Business Act).''.

SEC. 8. NO DISCRIMINATION IN THE PROVISION OF A FEDERAL PUBLIC BENEFIT 
              ON THE BASIS OF CANNABIS.

    (a) In General.--No person may be denied any Federal public benefit 
(as such term is defined in section 401(c) of the Personal 
Responsibility and Work Opportunity Reconciliation Act of 1996 (8 
U.S.C. 1611(c))) on the basis of any use or possession of cannabis, or 
on the basis of a conviction or adjudication of juvenile delinquency 
for a cannabis offense, by that person.
    (b) Security Clearances.--Federal agencies may not use past or 
present cannabis or marijuana use as criteria for granting, denying, or 
rescinding a security clearance.

SEC. 9. NO ADVERSE EFFECT FOR PURPOSES OF THE IMMIGRATION LAWS.

    (a) In General.--For purposes of the immigration laws (as such term 
is defined in section 101 of the Immigration and Nationality Act), 
cannabis may not be considered a controlled substance, and an alien may 
not be denied any benefit or protection under the immigration laws 
based on any event, including conduct, a finding, an admission, 
addiction or abuse, an arrest, a juvenile adjudication, or a 
conviction, relating to the possession or use of cannabis that is no 
longer prohibited pursuant to this Act or an amendment made by this 
Act, regardless of whether the event occurred before, on, or after the 
effective date of this Act.
    (b) Cannabis Defined.--The term ``cannabis''--
            (1) means all parts of the plant Cannabis sativa L., 
        whether growing or not; the seeds thereof; the resin extracted 
        from any part of such plant; and every compound, manufacture, 
        salt, derivative, mixture, or preparation of such plant, its 
        seeds or resin; and
            (2) does not include--
                    (A) hemp, as defined in section 297A of the 
                Agricultural Marketing Act of 1946;
                    (B) the mature stalks of such plant, fiber produced 
                from such stalks, oil or cake made from the seeds of 
                such plant, any other compound, manufacture, salt, 
                derivative, mixture, or preparation of such mature 
                stalks (except the resin extracted therefrom), fiber, 
                oil, or cake, or the sterilized seed of such plant 
                which is incapable of germination; or
                    (C) any drug product approved under section 505 of 
                the Federal Food, Drug, and Cosmetic Act, or biological 
                product licensed under section 351 of the Public Health 
                Service Act.
    (c) Conforming Amendments to Immigration and Nationality Act.--The 
Immigration and Nationality Act (8 U.S.C. 1101 et seq.) is amended--
            (1) in section 212(h), by striking ``and subparagraph 
        (A)(i)(II) of such subsection insofar as it relates to a single 
        offense of simple possession of 30 grams or less of 
        marijuana'';
            (2) in section 237(a)(2)(B)(i), by striking ``other than a 
        single offense involving possession for one's own use of 30 
        grams or less of marijuana'';
            (3) in section 101(f)(3), by striking ``(except as such 
        paragraph relates to a single offense of simple possession of 
        30 grams or less of marihuana)'';
            (4) in section 244(c)(2)(A)(iii)(II) by striking ``except 
        for so much of such paragraph as relates to a single offense of 
        simple possession of 30 grams or less of marijuana'';
            (5) in section 245(h)(2)(B) by striking ``(except for so 
        much of such paragraph as related to a single offense of simple 
        possession of 30 grams or less of marijuana)'';
            (6) in section 210(c)(2)(B)(ii)(III) by striking ``, except 
        for so much of such paragraph as relates to a single offense of 
        simple possession of 30 grams or less of marihuana''; and
            (7) in section 245A(d)(2)(B)(ii)(II) by striking ``, except 
        for so much of such paragraph as relates to a single offense of 
        simple possession of 30 grams or less of marihuana''.

SEC. 10. RESENTENCING AND EXPUNGEMENT.

    (a) Expungement of Non-Violent Federal Cannabis Offense Convictions 
for Individuals Not Under a Criminal Justice Sentence.--
            (1) In general.--Not later than 1 year after the date of 
        the enactment of this Act, each Federal district shall conduct 
        a comprehensive review and issue an order expunging each 
        conviction or adjudication of juvenile delinquency for a non-
        violent Federal cannabis offense entered by each Federal court 
        in the district before the date of enactment of this Act and on 
        or after May 1, 1971. Each Federal court shall also issue an 
        order expunging any arrests associated with each expunged 
        conviction or adjudication of juvenile delinquency.
            (2) Notification.--To the extent practicable, each Federal 
        district shall notify each individual whose arrest, conviction, 
        or adjudication of delinquency has been expunged pursuant to 
        this subsection that their arrest, conviction, or adjudication 
        of juvenile delinquency has been expunged, and the effect of 
        such expungement.
            (3) Right to petition court for expungement.--At any point 
        after the date of enactment of this Act, any individual with a 
        prior conviction or adjudication of juvenile delinquency for a 
        non-violent Federal cannabis offense, who is not under a 
        criminal justice sentence, may file a motion for expungement. 
        If the expungement of such a conviction or adjudication of 
        juvenile delinquency is required pursuant to this Act, the 
        court shall expunge the conviction or adjudication, and any 
        associated arrests. If the individual is indigent, counsel 
        shall be appointed to represent the individual in any 
        proceedings under this subsection.
            (4) Sealed record.--The court shall seal all records 
        related to a conviction or adjudication of juvenile delinquency 
        that has been expunged under this subsection. Such records may 
        only be made available by further order of the court.
    (b) Sentencing Review for Individuals Under a Criminal Justice 
Sentence.--
            (1) In general.--For any individual who is under a criminal 
        justice sentence for a non-violent Federal cannabis offense, 
        the court that imposed the sentence shall, on motion of the 
        individual, the Director of the Bureau of Prisons, the attorney 
        for the Government, or the court, conduct a sentencing review 
        hearing. If the individual is indigent, counsel shall be 
        appointed to represent the individual in any sentencing review 
        proceedings under this subsection.
            (2) Potential reduced resentencing.--After a sentencing 
        hearing under paragraph (1), a court shall--
                    (A) expunge each conviction or adjudication of 
                juvenile delinquency for a non-violent Federal cannabis 
                offense entered by the court before the date of 
                enactment of this Act, and any associated arrest;
                    (B) vacate the existing sentence or disposition of 
                juvenile delinquency and, if applicable, impose any 
                remaining sentence or disposition of juvenile 
                delinquency on the individual as if this Act, and the 
                amendments made by this Act, were in effect at the time 
                the offense was committed; and
                    (C) order that all records related to a conviction 
                or adjudication of juvenile delinquency that has been 
                expunged or a sentence or disposition of juvenile 
                delinquency that has been vacated under this Act be 
                sealed and only be made available by further order of 
                the court.
    (c) Effect of Expungement.--An individual who has had an arrest, a 
conviction, or juvenile delinquency adjudication expunged under this 
section--
            (1) may treat the arrest, conviction, or adjudication as if 
        it never occurred; and
            (2) shall be immune from any civil or criminal penalties 
        related to perjury, false swearing, or false statements, for a 
        failure to disclose such arrest, conviction, or adjudication.
    (d) Exception.--An individual who at sentencing received an 
aggravating role adjustment pursuant to United States Sentencing 
Guideline 3B1.1(a) in relation to a Federal cannabis offense conviction 
shall not be eligible for expungement of that Federal cannabis offense 
conviction under this section.
    (e) Definitions.--In this section:
            (1) The term ``Federal cannabis offense'' means an offense 
        that is no longer punishable pursuant to this Act or the 
        amendments made under this Act.
            (2) The term ``expunge'' means, with respect to an arrest, 
        a conviction, or a juvenile delinquency adjudication, the 
        removal of the record of such arrest, conviction, or 
        adjudication from each official index or public record.
            (3) The term ``under a criminal justice sentence'' means, 
        with respect to an individual, that the individual is serving a 
        term of probation, parole, supervised release, imprisonment, 
        official detention, pre-release custody, or work release, 
        pursuant to a sentence or disposition of juvenile delinquency 
        imposed on or after the effective date of the Controlled 
        Substances Act (May 1, 1971).
    (f) Study.--The Comptroller General of the United States, in 
consultation with the Secretary of Health and Human Services, shall 
conduct a demographic study of individuals convicted of a Federal 
cannabis offense. Such study shall include information about the age, 
race, ethnicity, sex, and gender identity of those individuals, the 
type of community such users dwell in, and such other demographic 
information as the Comptroller General determines should be included.
    (g) Report.--Not later than 2 years after the date of the enactment 
of this Act, the Comptroller General of the United States shall report 
to Congress the results of the study conducted under subsection (f).

SEC. 11. REFERENCES IN EXISTING LAW TO MARIJUANA OR MARIHUANA.

    Wherever, in the statutes of the United States or in the rulings, 
regulations, or interpretations of various administrative bureaus and 
agencies of the United States--
            (1) there appears or may appear the term ``marihuana'' or 
        ``marijuana'', that term shall be struck and the term 
        ``cannabis'' shall be inserted; and
            (2) there appears or may appear the term ``Marihuana'' or 
        ``Marijuana'', that term shall be struck and the term 
        ``Cannabis'' shall be inserted.

SEC. 12. SEVERABILITY.

    If any provision of this Act or an amendment made by this Act, or 
any application of such provision to any person or circumstance, is 
held to be unconstitutional, the remainder of this Act, the amendments 
made by this Act, and the application of this Act and the amendments 
made by this Act to any other person or circumstance shall not be 
affected.

SEC. 13. CANNABIS OFFENSE DEFINED.

    For purposes of this Act, the term ``cannabis offense'' means a 
criminal offense related to cannabis--
            (1) that, under Federal law, is no longer punishable 
        pursuant to this Act or the amendments made under this Act; or
            (2) that, under State law, is no longer an offense or that 
        was designated a lesser offense or for which the penalty was 
        reduced under State law pursuant to or following the adoption 
        of a State law authorizing the sale or use of cannabis.

SEC. 14. RULEMAKING.

    Unless otherwise provided in this Act, not later than 1 year after 
the date of enactment of this Act, the Department of the Treasury, the 
Department of Justice, and the Small Business Administration shall 
issue or amend any rules, standard operating procedures, and other 
legal or policy guidance necessary to carry out implementation of this 
Act. After the 1-year period, any publicly issued sub-regulatory 
guidance, including any compliance guides, manuals, advisories and 
notices, may not be issued without 60-day notice to appropriate 
congressional committees. Notice shall include a description and 
justification for additional guidance.

SEC. 15. SOCIETAL IMPACT OF MARIJUANA LEGALIZATION STUDY.

    The Comptroller General of the United States shall, not later than 
2 years after the date of enactment of this Act, provide to Congress a 
study that addresses the societal impact of the legalization of 
recreational cannabis by States, including--
            (1) sick days reported to employers;
            (2) workers compensations claims;
            (3) tax revenue remitted to States resulting from legal 
        marijuana sales;
            (4) changes in government spending related to enforcement 
        actions and court proceedings;
            (5) Federal welfare assistance applications;
            (6) rate of arrests related to methamphetamine possession;
            (7) hospitalization rates related to methamphetamine and 
        narcotics use;
            (8) uses of marijuana and its byproducts for medical 
        purposes;
            (9) uses of marijuana and its byproducts for purposes 
        relating to the health, including the mental health, of 
        veterans;
            (10) arrest rates of individuals driving under the 
        influence or driving while intoxicated by marijuana;
            (11) traffic-related deaths and injuries where the driver 
        is impaired by marijuana;
            (12) arrest of minors for marijuana-related charges;
            (13) violent crime rates;
            (14) school suspensions, expulsions, and law enforcement 
        referrals that are marijuana-related;
            (15) high school dropout rates;
            (16) changes in district-wide and State-wide standardized 
        test scores;
            (17) marijuana-related hospital admissions and poison 
        control calls;
            (18) marijuana-related juvenile admittances into substance 
        rehabilitation facilities and mental health clinics;
            (19) diversion of marijuana into neighboring States and 
        drug seizures in neighboring States;
            (20) marijuana plants grown on public lands in 
        contravention to Federal and State laws; and
            (21) court filings under a State's organized crime 
        statutes.

SEC. 16. STUDY ON MARIJUANA IMPAIRMENT.

    (a) In General.--Not later than 1 year after the date of enactment 
of this Act, the Secretary of Transportation shall conduct a study on 
technologies and methods that law enforcement may use to determine 
whether a driver is impaired by marijuana.
    (b) Requirements.--The study conducted under subsection (a) shall 
be carried out by the National Highway Traffic Safety Administration, 
in consultation with any other agency the Secretary determines 
appropriate.
    (c) Authorization of Appropriations.--There is authorized to be 
appropriated $10,000,000 to carry out this section.

SEC. 17. WORKPLACE IMPACT OF MARIJUANA LEGALIZATION STUDY.

    Not later than one year after the date of enactment of this Act, 
the National Institute for Occupational Safety and Health shall--
            (1) conduct a study and submit to Congress a report on the 
        impact of the legalization of recreational cannabis by States 
        on the workplace; and
            (2) develop best practices for use by employers that are 
        transitioning their policies related to the use of recreational 
        cannabis, prioritizing the development of best practices for 
        employers engaged in Federal infrastructure projects, 
        transportation, public safety, and national security.

SEC. 18. SCHOOL IMPACT OF MARIJUANA LEGALIZATION STUDY.

    Not later than one year after the date of enactment of this Act, 
the Secretary of Education shall--
            (1) conduct a study and submit to Congress a report on the 
        impact of the legalization of recreational cannabis by States 
        on schools and school-aged children; and
            (2) develop best practices for use by educators and 
        administrators to protect school-aged children from any 
        negative impacts of such legalization.

            Passed the House of Representatives April 1, 2022.

            Attest:

                                                                 Clerk.
117th CONGRESS

  2d Session

                               H. R. 3617

_______________________________________________________________________

                                 AN ACT

 To decriminalize and deschedule cannabis, to provide for reinvestment 
 in certain persons adversely impacted by the War on Drugs, to provide 
 for expungement of certain cannabis offenses, and for other purposes.
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