IB 

Union Calendar No. 203 

117TH CONGRESS 

2D SESSION H. R. 3617 

[Report No. 117–276, Part I] 

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. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 28, 2021 

Mr. NADLER (for himself, Ms. LEE of California, Mr. BLUMENAUER, Ms. 

JACKSON LEE, Mr. JEFFRIES, and Ms. VELA ́ZQUEZ) introduced the following bill; which was referred to the Committee on the Judiciary, and 

in addition to the Committees on Energy and Commerce, Agriculture, 

Education and Labor, Ways and Means, Small Business, Natural Resources, Oversight and Reform, and Transportation and Infrastructure, 

for a period to be subsequently determined by the Speaker, in each case 

for consideration of such provisions as fall within the jurisdiction of the 

committee concerned 

MARCH 24, 2022 

Additional sponsors: Ms. DEAN, Ms. LOFGREN, Mr. COHEN, Mr. JOHNSON of 

Georgia, Mr. DEUTCH, Mr. SWALWELL, Mr. LIEU, Mr. RASKIN, Ms. 

JAYAPAL, Mr. CORREA, Ms. SCANLON, Mr. NEGUSE, Ms. ESCOBAR, Mr. 

JONES, Ms. BUSH, Mr. MCGOVERN, Ms. STRICKLAND, Mr. MICHAEL F. 

DOYLE of Pennsylvania, Mr. POCAN, Mr. PERLMUTTER, Mrs. CAROLYN

B. MALONEY of New York, Mr. PAYNE, Ms. NORTON, Mr. SMITH of 

Washington, Mrs. LAWRENCE, Mr. ESPAILLAT, Ms. DELBENE, Ms. 

TITUS, Mr. BRENDAN F. BOYLE of Pennsylvania, Ms. SCHAKOWSKY, Ms. 

WILLIAMS of Georgia, Ms. DEGETTE, Ms. OMAR, Mr. GRIJALVA, Ms. 

NEWMAN, Mr. WELCH, Mrs. HAYES, Mr. RUSH, Ms. BONAMICI, Mr. 

HUFFMAN, Ms. PRESSLEY, Mr. CARBAJAL, Mr. TONKO, Ms. CASTOR of 

Florida, Ms. CRAIG, Mrs. LURIA, Mr. BEYER, Mr. LOWENTHAL, Ms. 

STANSBURY, Mr. KILDEE, Mr. KAHELE, Mr. MOULTON, Ms. MCCOLLUM, 

Mr. SCOTT of Virginia, Mr. GALLEGO, Mr. CA ́RDENAS, Mr. GARCI ́A of 

Illinois, Mr. TORRES of New York, Ms. LEGER FERNANDEZ, Mr. SHERMAN, Mr. LEVIN of California, Mr. TAKANO, Mrs. KIRKPATRICK, Ms. 


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CLARK of Massachusetts, Mr. DANNY K. DAVIS of Illinois, Mr. GAETZ, 

Ms. MENG, Mr. LARSON of Connecticut, Mrs. WATSON COLEMAN, Mr. 

CICILLINE, Mr. FOSTER, Ms. OCASIO-CORTEZ, Mr. EVANS, Mr. PHILLIPS, Mr. MORELLE, Mr. COURTNEY, Mr. CASTRO of Texas, Mr. BROWN

of Maryland, Ms. WATERS, Ms. WILSON of Florida, Mr. BUTTERFIELD, 

Mr. TRONE, Mr. DOGGETT, Mr. CARTER of Louisiana, Mr. KHANNA, Mr. 

PRICE of North Carolina, Mr. CRIST, Mr. VEASEY, Ms. TLAIB, Mrs. 

TRAHAN, Mr. CONNOLLY, Mr. DAVID SCOTT of Georgia, Mr. GOMEZ, Mr. 

PETERS, Mr. BOWMAN, Mr. HORSFORD, Mr. DEFAZIO, Mr. CROW, Ms. 

ADAMS, Mr. GREEN of Texas, Ms. BOURDEAUX, Ms. BROWN of Ohio, Mr. 

AGUILAR, Mr. RYAN, Mr. PANETTA, Mr. MEEKS, Mr. LEVIN of Michigan, 

Ms. PINGREE, and Mr. CLEAVER

MARCH 24, 2022 

Reported from the Committee on the Judiciary with an amendment 

[Strike out all after the enacting clause and insert the part printed in italic] 

MARCH 24, 2022 

Committees on Energy and Commerce, Agriculture, Education and Labor, 

Ways and Means, Small Business, Natural Resources, Oversight and Reform, and Transportation and Infrastructure discharged; committed to 

the Committee of the Whole House on the State of the Union and ordered to be printed 

[For text of introduced bill, see copy of bill as introduced on May 28, 2021] 

A BILL 

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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1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Marijuana Opportunity 

5 Reinvestment and Expungement Act’’ or the ‘‘MORE Act’’. 

6 SEC. 2. FINDINGS. 

7 The Congress finds as follows: 

8 (1) The communities that have been most 

9 harmed by cannabis prohibition are benefiting the 

10 least from the legal marijuana marketplace. 

11 (2) A legacy of racial and ethnic injustices, com12 pounded by the disproportionate collateral con13 sequences of 80 years of cannabis prohibition enforce14 ment, now limits participation in the industry. 

15 (3) 37 States, the District of Columbia, Puerto 

16 Rico, Guam, and the U.S. Virgin Islands have adopt17 ed laws allowing legal access to cannabis, and 15 

18 States, the District of Columbia, the Commonwealth 

19 of the Northern Mariana Islands, and Guam have 

20 adopted laws legalizing cannabis for adult rec21 reational use. 

22 (4) A total of 47 States have reformed their laws 

23 pertaining to cannabis despite the Schedule I status 

24 of marijuana and its Federal criminalization. 


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1 (5) Legal cannabis sales totaled $20,000,000,000 

2 in 2020 and are projected to reach $40,500,000,000 

3 by 2025. 

4 (6) According to the American Civil Liberties 

5 Union (ACLU), enforcing cannabis prohibition laws 

6 costs taxpayers approximately $3.6 billion a year. 

7 (7) The continued enforcement of cannabis prohi8 bition laws results in over 600,000 arrests annually, 

9 disproportionately impacting people of color who are 

10 almost 4 times more likely to be arrested for cannabis 

11 possession than their White counterparts, despite 

12 equal rates of use across populations. 

13 (8) People of color have been historically targeted 

14 by discriminatory sentencing practices resulting in 

15 Black men receiving drug sentences that are 13.1 per16 cent longer than sentences imposed for White men and 

17 Latinos being nearly 6.5 times more likely to receive 

18 a Federal sentence for cannabis possession than non19 Hispanic Whites. 

20 (9) In 2013, simple cannabis possession was the 

21 fourth most common cause of deportation for any of22 fense and the most common cause of deportation for 

23 drug law violations. 


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1 (10) Fewer than one-fifth of cannabis business 

2 owners identify as minorities and only approximately 

3 4 percent are black. 

4 (11) Applicants for cannabis licenses are limited 

5 by numerous laws, regulations, and exorbitant permit 

6 applications, licensing fees, and costs in these States, 

7 which can require more than $700,000. 

8 (12) Historically disproportionate arrest and 

9 conviction rates make it particularly difficult for peo10 ple of color to enter the legal cannabis marketplace, 

11 as most States bar these individuals from partici12 pating. 

13 (13) Federal law severely limits access to loans 

14 and capital for cannabis businesses, disproportion15 ately impacting minority small business owners. 

16 (14) Some States and municipalities have taken 

17 proactive steps to mitigate inequalities in the legal 

18 cannabis marketplace and ensure equal participation 

19 in the industry. 

20 SEC. 3. DECRIMINALIZATION OF CANNABIS. 

21 (a) CANNABIS REMOVED FROM SCHEDULE OF CON22 TROLLED SUBSTANCES.— 

23 (1) REMOVAL IN STATUTE.—Subsection (c) of 

24 schedule I of section 202(c) of the Controlled Sub25 stances Act (21 U.S.C. 812) is amended— 


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1 (A) by striking ‘‘(10) Marihuana.’’; and 

2 (B) by striking ‘‘(17) 

3 Tetrahydrocannabinols, except for 

4 tetrahydrocannabinols in hemp (as defined 

5 under section 297A of the Agricultural Mar6 keting Act of 1946).’’. 

7 (2) REMOVAL FROM SCHEDULE.—Not later than 

8 180 days after the date of the enactment of this Act, 

9 the Attorney General shall finalize a rulemaking 

10 under section 201(a)(2) removing marihuana and 

11 tetrahydrocannabinols from the schedules of controlled 

12 substances. For the purposes of the Controlled Sub13 stances Act, marihuana and tetrahydrocannabinols 

14 shall each be deemed to be a drug or other substance 

15 that does not meet the requirements for inclusion in 

16 any schedule. A rulemaking under this paragraph 

17 shall be considered to have taken effect as of the date 

18 of enactment of this Act for purposes of any offense 

19 committed, case pending, conviction entered, and, in 

20 the case of a juvenile, any offense committed, case 

21 pending, and adjudication of juvenile delinquency en22 tered before, on, or after the date of enactment of this 

23 Act. 


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1 (b) CONFORMING AMENDMENTS TO CONTROLLED SUB2 STANCES ACT.—The Controlled Substances Act (21 U.S.C. 

3 801 et seq.) is amended— 

4 (1) in section 102(44) (21 U.S.C. 802(44)), by 

5 striking ‘‘marihuana,’’; 

6 (2) in section 401(b) (21 U.S.C. 841(b))— 

7 (A) in paragraph (1)— 

8 (i) in subparagraph (A)— 

9 (I) in clause (vi), by inserting 

10 ‘‘or’’ after the semicolon; 

11 (II) by striking clause (vii); and 

12 (III) by redesignating clause 

13 (viii) as clause (vii); 

14 (ii) in subparagraph (B)— 

15 (I) in clause (vi), by inserting 

16 ‘‘or’’ after the semicolon; 

17 (II) by striking clause (vii); and 

18 (III) by redesignating clause 

19 (viii) as clause (vii); 

20 (iii) in subparagraph (C), in the first 

21 sentence, by striking ‘‘subparagraphs (A), 

22 (B), and (D)’’ and inserting ‘‘subpara23 graphs (A) and (B)’’; 

24 (iv) by striking subparagraph (D); 


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1 (v) by redesignating subparagraph (E) 

2 as subparagraph (D); and 

3 (vi) in subparagraph (D)(i), as so re4 designated, by striking ‘‘subparagraphs (C) 

5 and (D)’’ and inserting ‘‘subparagraph 

6 (C)’’; 

7 (B) by striking paragraph (4); and 

8 (C) by redesignating paragraphs (5), (6), 

9 and (7) as paragraphs (4), (5), and (6), respec10 tively; 

11 (3) in section 402(c)(2)(B) (21 U.S.C. 

12 842(c)(2)(B)), by striking ‘‘, marihuana,’’; 

13 (4) in section 403(d)(1) (21 U.S.C. 843(d)(1)), 

14 by striking ‘‘, marihuana,’’; 

15 (5) in section 418(a) (21 U.S.C. 859(a)), by 

16 striking the last sentence; 

17 (6) in section 419(a) (21 U.S.C. 860(a)), by 

18 striking the last sentence; 

19 (7) in section 422(d) (21 U.S.C. 863(d))— 

20 (A) in the matter preceding paragraph (1), 

21 by striking ‘‘marijuana,’’; and 

22 (B) in paragraph (5), by striking ‘‘, such as 

23 a marihuana cigarette,’’; and 


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1 (8) in section 516(d) (21 U.S.C. 886(d)), by 

2 striking ‘‘section 401(b)(6)’’ each place the term ap3 pears and inserting ‘‘section 401(b)(5)’’. 

4 (c) OTHER CONFORMING AMENDMENTS.— 

5 (1) NATIONAL FOREST SYSTEM DRUG CONTROL

6 ACT OF 1986.—The National Forest System Drug Con7 trol Act of 1986 (16 U.S.C. 559b et seq.) is amend8 ed— 

9 (A) in section 15002(a) (16 U.S.C. 559b(a)) 

10 by striking ‘‘marijuana and other’’; 

11 (B) in section 15003(2) (16 U.S.C. 559c(2)) 

12 by striking ‘‘marijuana and other’’; and 

13 (C) in section 15004(2) (16 U.S.C. 559d(2)) 

14 by striking ‘‘marijuana and other’’. 

15 (2) INTERCEPTION OF COMMUNICATIONS.—Sec16 tion 2516 of title 18, United States Code, is amend17 ed— 

18 (A) in subsection (1)(e), by striking ‘‘mari19 huana,’’; and 

20 (B) in subsection (2) by striking ‘‘mari21 huana’’. 

22 (3) FMCSA PROVISIONS.— 

23 (A) CONFORMING AMENDMENT.—Section 

24 31301(5) of title 49, United States Code, is 

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1 serting ‘‘sections 31306, 31306a, and subsections 

2 (b) and (c) of section 31310,’’. 

3 (B) DEFINITION.—Section 31306(a) of title 

4 49, United States Code, is amended— 

5 (i) by striking ‘‘means any substance’’ 

6 and inserting the following: ‘‘means— 

7 ‘‘(A) any substance’’; and 

8 (ii) by striking the period at the end 

9 and inserting ‘‘; and 

10 ‘‘(B) any substance not covered under sub11 paragraph (A) that was a substance under such 

12 section as of December 1, 2018, and specified by 

13 the Secretary of Transportation.’’. 

14 (C) DISQUALIFICATIONS.—Section 31310(b) 

15 of title 49, United States Code, is amended by 

16 adding at the end the following: 

17 ‘‘(3) In this subsection and subsection (c), the term 

18 ‘controlled substance’ has the meaning given such term in 

19 section 31306(a).’’. 

20 (4) FAA PROVISIONS.—Section 45101 of title 49, 

21 United States Code, is amended— 

22 (A) by striking ‘‘means any substance’’ and 

23 inserting the following: ‘‘means— 

24 ‘‘(A) any substance’’; and 


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1 (B) by striking the period at the end and 

2 inserting ‘‘; and 

3 ‘‘(B) any substance not covered under sub4 paragraph (A) that was a substance under such 

5 section as of December 1, 2018, and specified by 

6 the Secretary of Transportation.’’. 

7 (5) FRA PROVISIONS.—Section 20140(a) of title 

8 49, United States Code, is amended— 

9 (A) by striking ‘‘means any substance’’ and 

10 inserting the following: ‘‘means— 

11 ‘‘(A) any substance’’; and 

12 (B) by striking the period at the end and 

13 inserting ‘‘; and 

14 ‘‘(B) any substance not covered under sub15 paragraph (A) that was a substance under such 

16 section as of December 1, 2018, and specified by 

17 the Secretary of Transportation.’’. 

18 (6) FTA PROVISIONS.—Section 5331(a)(1) of 

19 title 49, United States Code, is amended— 

20 (A) by striking ‘‘means any substance’’ and 

21 inserting the following: ‘‘means— 

22 ‘‘(A) any substance’’; and 

23 (B) by striking the period at the end and 

24 inserting ‘‘; and 


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1 ‘‘(B) any substance not covered under sub2 paragraph (A) that was a substance under such 

3 section as of December 1, 2018, and whose use 

4 the Secretary of Transportation decides has a 

5 risk to transportation safety.’’. 

6 (d) RETROACTIVITY.—The amendments made by this 

7 section to the Controlled Substances Act (21 U.S.C. 801 et 

8 seq.) are retroactive and shall apply to any offense com9 mitted, case pending, conviction entered, and, in the case 

10 of a juvenile, any offense committed, case pending, or adju11 dication of juvenile delinquency entered before, on, or after 

12 the date of enactment of this Act. 

13 (e) EFFECT ON OTHER LAW.—Nothing in this subtitle 

14 shall affect or modify— 

15 (1) the Federal Food, Drug, and Cosmetic Act 

16 (21 U.S.C. 301 et seq.); 

17 (2) section 351 of the Public Health Service Act 

18 (42 U.S.C. 262); or 

19 (3) the authority of the Commissioner of Food 

20 and Drugs and the Secretary of Health and Human 

21 Services— 

22 (A) under— 

23 (i) the Federal Food, Drug, and Cos24 metic Act (21 U.S. 301 et seq.); or 


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1 (ii) section 351 of the Public Health 

2 Service Act (42 U.S.C. 262); or 

3 (B) to promulgate Federal regulations and 

4 guidelines that relate to products containing 

5 cannabis or cannabis-derived compounds under 

6 the Act described in subparagraph (A)(i) or the 

7 section described in subparagraph (A)(ii). 

8 (f) PUBLIC MEETINGS.—Not later than one year after 

9 the date of enactment of this Act, the Secretary of Health 

10 and Human Services, acting through the Commissioner of 

11 Food and Drugs, shall hold not less than one public meeting 

12 to address the regulation, safety, manufacturing, product 

13 quality, marketing, labeling, and sale of products con14 taining cannabis or cannabis-derived compounds. 

15 (g) SPECIAL RULE FOR FEDERAL EMPLOYEE TEST16 ING.—Section 503 of the Supplemental Appropriations Act, 

17 1987 (5 U.S.C. 7301 note) is amended by adding at the 

18 end the following: 

19 ‘‘(h) MARIJUANA.— 

20 ‘‘(1) CONTINUED TESTING.—Notwithstanding the 

21 Marijuana Opportunity Reinvestment and 

22 Expungement Act and the amendments made thereby, 

23 the Secretary of Health and Human Services may 

24 continue to include marijuana for purposes of drug 

25 testing of Federal employees subject to this section, 


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1 Executive Order 12564, or other applicable Federal 

2 laws and orders. 

3 ‘‘(2) DEFINITION.—The term ‘marijuana’ has the 

4 meaning given to the term ‘marihuana’ in section 102 

5 of the Controlled Substances Act (21 6 U.S.C. 802) on 

6 the day before the date of enactment of the Marijuana 

7 Opportunity Reinvestment and Expungement Act.’’. 

8 (h) SPECIAL RULE FOR CERTAIN REGULATIONS.— 

9 (1) IN GENERAL.—The amendments made by 

10 this section may not be construed to abridge the au11 thority of the Secretary of Transportation, or the Sec12 retary of the department in which the Coast Guard 

13 is operating, to regulate and screen for the use of a 

14 controlled substance. 

15 (2) CONTROLLED SUBSTANCE DEFINED.—In this 

16 subsection, the term ‘‘controlled substance’’ means— 

17 (A) any substance covered under section 102 

18 of the Controlled Substances Act (21 U.S.C. 802) 

19 on the day before the date of enactment of this 

20 Act; and 

21 (B) any substance not covered under sub22 paragraph (A) that was a substance covered 

23 under section 102 of the Controlled Substances 

24 Act (21 U.S.C. 802) on December 1, 2018, and 

25 specified by the Secretary of Transportation. 


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1 SEC. 4. DEMOGRAPHIC DATA OF CANNABIS BUSINESS OWN2 ERS AND EMPLOYEES. 

3 (a) IN GENERAL.—The Bureau of Labor Statistics 

4 shall regularly compile, maintain, and make public data 

5 on the demographics of— 

6 (1) individuals who are business owners in the 

7 cannabis industry; and 

8 (2) individuals who are employed in the can9 nabis industry. 

10 (b) DEMOGRAPHIC DATA.—The data collected under 

11 subsection (a) shall include data regarding— 

12 (1) age; 

13 (2) certifications and licenses; 

14 (3) disability status; 

15 (4) educational attainment; 

16 (5) family and marital status; 

17 (6) nativity; 

18 (7) race and Hispanic ethnicity; 

19 (8) school enrollment; 

20 (9) veteran status; and 

21 (10) sex. 

22 (c) CONFIDENTIALITY.—The name, address, and other 

23 identifying information of individuals employed in the can24 nabis industry shall be kept confidential by the Bureau and 

25 not be made available to the public. 

26 (d) DEFINITIONS.—In this section: 


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1 (1) CANNABIS.—The term ‘‘cannabis’’ means ei2 ther marijuana or cannabis as defined under the 

3 State law authorizing the sale or use of cannabis in 

4 which the individual or entity is located. 

5 (2) CANNABIS INDUSTRY.—The term ‘‘cannabis 

6 industry’’ means an individual or entity that is li7 censed or permitted under a State or local law to en8 gage in commercial cannabis-related activity. 

9 (3) OWNER.—The term ‘‘owner’’ means an indi10 vidual or entity that is defined as an owner under the 

11 State or local law where the individual or business is 

12 licensed or permitted. 

13 SEC. 5. CREATION OF OPPORTUNITY TRUST FUND AND IM14 POSITION OF TAXES WITH RESPECT TO CAN15 NABIS PRODUCTS. 

16 (a) ESTABLISHMENT OF TRUST FUND.—Subchapter A 

17 of chapter 98 of the Internal Revenue Code of 1986 is 

18 amended by adding at the end the following new section: 

19 ‘‘SEC. 9512. ESTABLISHMENT OF OPPORTUNITY TRUST 

20 FUND. 

21 ‘‘(a) CREATION OF TRUST FUND.—There is established 

22 in the Treasury of the United States a trust fund to be 

23 known as the ‘Opportunity Trust Fund’ (referred to in this 

24 section as the ‘Trust Fund’), consisting of such amounts as 


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1 may be appropriated or credited to such fund as provided 

2 in this section or section 9602(b). 

3 ‘‘(b) TRANSFERS TO TRUST FUND.—There are hereby 

4 appropriated to the Trust Fund amounts equivalent to the 

5 net revenues received in the Treasury from the taxes im6 posed under chapter 56. 

7 ‘‘(c) EXPENDITURES.—Amounts in the Trust Fund 

8 shall be available, without further appropriation, only as 

9 follows: 

10 ‘‘(1) 50 percent to the Attorney General to carry 

11 out section 3052(a) of part OO of the Omnibus Crime 

12 Control and Safe Streets Act of 1968. 

13 ‘‘(2) 10 percent to the Attorney General to carry 

14 out section 3052(b) of part OO of the Omnibus Crime 

15 Control and Safe Streets Act of 1968. 

16 ‘‘(3) 20 percent to the Administrator of the 

17 Small Business Administration to carry out section 

18 6(b)(1) of the Marijuana Opportunity Reinvestment 

19 and Expungement Act. 

20 ‘‘(4) 20 percent to the Administrator of the 

21 Small Business Administration to carry out section 

22 6(b)(2) of the Marijuana Opportunity Reinvestment 

23 and Expungement Act.’’. 


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1 (b) CANNABIS REVENUE AND REGULATION ACT.—Sub2 title E of the Internal Revenue Code of 1986 is amended 

3 by adding at the end the following new chapter: 

4 ‘‘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

5 ‘‘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. 

6 ‘‘SEC. 5901. IMPOSITION OF TAX. 

7 ‘‘(a) IMPOSITION OF TAX.—There is hereby imposed on 

8 any cannabis product produced in or imported into the 

9 United States a tax equal to— 

10 ‘‘(1) for any such product removed during the 

11 first 5 calendar years ending after the date on which 

12 this chapter becomes effective, the applicable percent13 age of such product’s removal price, and 

14 ‘‘(2) for any product removed during any cal15 endar year after the calendar years described in para16 graph (1), the applicable equivalent amount. 


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1 ‘‘(b) APPLICABLE PERCENTAGE.—For purposes of sub2 section (a)(1), the applicable percentage shall be determined 

3 as follows: 

4 ‘‘(1) For any cannabis product removed during 

5 the first 2 calendar years ending after the date on 

6 which this chapter becomes effective, 5 percent. 

7 ‘‘(2) For any cannabis product removed during 

8 the calendar year after the last calendar year to 

9 which paragraph (1) applies, 6 percent. 

10 ‘‘(3) For any cannabis product removed during 

11 the calendar year after the calendar year to which 

12 paragraph (2) applies, 7 percent. 

13 ‘‘(4) For any cannabis product removed during 

14 the calendar year after the calendar year to which 

15 paragraph (3) applies, 8 percent. 

16 ‘‘(c) APPLICABLE EQUIVALENT AMOUNT.— 

17 ‘‘(1) IN GENERAL.—For purposes of subsection 

18 (a)(2), the term ‘applicable equivalent amount’ 

19 means, with respect to any cannabis product removed 

20 during any calendar year, an amount equal to— 

21 ‘‘(A) in the case of any cannabis product 

22 not described in subparagraph (B), the product 

23 of the applicable rate per ounce multiplied by the 

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1 tionate tax at the like rate on all fractional parts 

2 of an ounce of such product), and 

3 ‘‘(B) in the case of any THC-measurable 

4 cannabis product, the product of the applicable 

5 rate per gram multiplied by the number of 

6 grams of tetrahydrocannabinol in such product 

7 (and a proportionate tax at the like rate on all 

8 fractional parts of a gram of 

9 tetrahydrocannabinol in such product). 

10 ‘‘(2) APPLICABLE RATES.— 

11 ‘‘(A) IN GENERAL.—For purposes of para12 graph (1)(A), the term ‘applicable rate per 

13 ounce’ means, with respect to any cannabis 

14 product removed during any calendar year, 8 

15 percent of the prevailing sales price of cannabis 

16 flowers sold in the United States during the 12- 

17 month period ending one calendar quarter before 

18 such calendar year, expressed on a per ounce 

19 basis, as determined by the Secretary. 

20 ‘‘(B) THC-MEASURABLE CANNABIS PROD21 UCTS.—For purposes of paragraph (1)(B), the 

22 term ‘applicable rate per gram’ means, with re23 spect to any cannabis product removed during 

24 any calendar year, 8 percent of the prevailing 

25 sales price of tetrahydrocannabinol sold in the 


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1 United States during the 12-month period end2 ing one calendar quarter before such calendar 

3 year, expressed on a per gram basis, as deter4 mined by the Secretary. 

5 ‘‘(d) TIME OF ATTACHMENT ON CANNABIS PROD6 UCTS.—The tax under this section shall attach to any can7 nabis product as soon as such product is in existence as 

8 such, whether it be subsequently separated or transferred 

9 into any other substance, either in the process of original 

10 production or by any subsequent process. 

11 ‘‘SEC. 5902. DEFINITIONS. 

12 ‘‘(a) DEFINITIONS RELATED TO CANNABIS PROD13 UCTS.—For purposes of this chapter— 

14 ‘‘(1) CANNABIS PRODUCT.— 

15 ‘‘(A) IN GENERAL.—Except as provided in 

16 subparagraph (B), the term ‘cannabis product’ 

17 means any article which contains (or consists of) 

18 cannabis. 

19 ‘‘(B) EXCEPTIONS.—The term ‘cannabis 

20 product’ shall not include an FDA-approved ar21 ticle or industrial hemp. 

22 ‘‘(C) FDA-APPROVED ARTICLE.—The term 

23 ‘FDA-approved article’ means any article if the 

24 producer or importer thereof demonstrates to the 


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1 satisfaction of the Secretary of Health and 

2 Human Services that such article is— 

3 ‘‘(i) a drug— 

4 ‘‘(I) that is approved under sec5 tion 505 of the Federal Food, Drug, 

6 and Cosmetic Act or licensed under 

7 section 351 of the Public Health Serv8 ice Act, or 

9 ‘‘(II) for which an investigational 

10 use exemption has been authorized 

11 under section 505(i) of the Federal 

12 Food, Drug, and Cosmetic Act or 

13 under section 351(a) of the Public 

14 Health Service Act, or 

15 ‘‘(ii) a combination product (as de16 scribed in section 503(g) of the Federal 

17 Food, Drug, and Cosmetic Act), the con18 stituent parts of which were approved or 

19 cleared under section 505, 510(k), or 515 of 

20 such Act. 

21 ‘‘(D) INDUSTRIAL HEMP.—The term ‘indus22 trial hemp’ means the plant Cannabis sativa L. 

23 and any part of such plant, whether growing or 

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1 centration of not more than 0.3 percent on a dry 

2 weight basis. 

3 ‘‘(2) THC-MEASURABLE CANNABIS PRODUCT.— 

4 The term ‘THC-measurable cannabis product’ means 

5 any cannabis product— 

6 ‘‘(A) with respect to which the Secretary has 

7 made a determination that the amount of 

8 tetrahydrocannabinol in such product can be 

9 measured with a high degree of accuracy, or 

10 ‘‘(B) which is not cannabis flower and the 

11 concentration of tetrahydrocannabinol in which 

12 is significantly higher than the average such con13 centration in cannabis flower. 

14 ‘‘(3) CANNABIS.—The term ‘cannabis’ has the 

15 meaning given such term under section 102(16) of the 

16 Controlled Substances Act (21 U.S.C. 802(16)). 

17 ‘‘(b) DEFINITIONS RELATED TO CANNABIS ENTER18 PRISES.—For purposes of this chapter— 

19 ‘‘(1) CANNABIS ENTERPRISE.—The term ‘can20 nabis enterprise’ means a producer, importer, or ex21 port warehouse proprietor. 

22 ‘‘(2) PRODUCER.— 

23 ‘‘(A) IN GENERAL.—The term ‘producer’ 

24 means any person who plants, cultivates, har25 vests, grows, manufactures, produces, compounds, 


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1 converts, processes, prepares, or packages any 

2 cannabis product. 

3 ‘‘(B) PERSONAL USE EXCEPTION.—Subject 

4 to regulation prescribed by the Secretary, the 

5 term ‘producer’ shall not include any individual 

6 otherwise described in subparagraph (A) if the 

7 only cannabis product described in such sub8 paragraph with respect to such individual is for 

9 personal or family use and not for sale. 

10 ‘‘(3) IMPORTER.—The term ‘importer’ means 

11 any person who— 

12 ‘‘(A) is in the United States and to whom 

13 non-tax-paid cannabis products, produced in a 

14 foreign country or a possession of the United 

15 States, are shipped or consigned, 

16 ‘‘(B) removes cannabis products for sale or 

17 consumption in the United States from a cus18 toms bonded warehouse, or 

19 ‘‘(C) smuggles or otherwise unlawfully 

20 brings any cannabis product into the United 

21 States. 

22 ‘‘(4) EXPORT WAREHOUSE PROPRIETOR.— 

23 ‘‘(A) IN GENERAL.—The term ‘export ware24 house proprietor’ means any person who operates 

25 an export warehouse. 


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1 ‘‘(B) EXPORT WAREHOUSE.—The term ‘ex2 port warehouse’ means a bonded internal revenue 

3 warehouse for the storage of cannabis products, 

4 upon which the internal revenue tax has not been 

5 paid— 

6 ‘‘(i) for subsequent shipment to a for7 eign country or a possession of the United 

8 States, or 

9 ‘‘(ii) for consumption beyond the juris10 diction of the internal revenue laws of the 

11 United States. 

12 ‘‘(5) CANNABIS PRODUCTION FACILITY.—The 

13 term ‘cannabis production facility’ means an estab14 lishment which is qualified under subchapter C to 

15 perform any operation for which such qualification is 

16 required under such subchapter. 

17 ‘‘(c) OTHER DEFINITIONS.—For purposes of this chap18 ter— 

19 ‘‘(1) PRODUCE.—The term ‘produce’ includes 

20 any activity described in subsection (b)(2)(A). 

21 ‘‘(2) REMOVAL; REMOVE.—The terms ‘removal’ 

22 or ‘remove’ means— 

23 ‘‘(A) the transfer of cannabis products from 

24 the premises of a producer (or the transfer of 

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1 ducer to a non-bonded premises of such pro2 ducer), 

3 ‘‘(B) release of such products from customs 

4 custody, or 

5 ‘‘(C) smuggling or other unlawful importa6 tion of such products into the United States. 

7 ‘‘(3) REMOVAL PRICE.—The term ‘removal price’ 

8 means— 

9 ‘‘(A) except as otherwise provided in this 

10 paragraph, the price for which the cannabis 

11 product is sold in the sale which occurs in con12 nection with the removal of such product, 

13 ‘‘(B) in the case of any such sale which is 

14 described in section 5903(c), the price deter15 mined under such section, and 

16 ‘‘(C) if there is no sale which occurs in con17 nection with such removal, the price which 

18 would be determined under section 5903(c) if 

19 such product were sold at a price which cannot 

20 be determined. 

21 ‘‘SEC. 5903. LIABILITY AND METHOD OF PAYMENT. 

22 ‘‘(a) LIABILITY FOR TAX.— 

23 ‘‘(1) ORIGINAL LIABILITY.—The producer or im24 porter of any cannabis product shall be liable for the 

25 taxes imposed thereon by section 5901. 


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1 ‘‘(2) TRANSFER OF LIABILITY.— 

2 ‘‘(A) IN GENERAL.—When cannabis prod3 ucts are transferred, without payment of tax, 

4 pursuant to subsection (b) or (c) of section 

5 5904— 

6 ‘‘(i) except as provided in clause (ii), 

7 the transferee shall become liable for the tax 

8 upon receipt by the transferee of such arti9 cles, and the transferor shall thereupon be 

10 relieved of their liability for such tax, and 

11 ‘‘(ii) in the case of cannabis products 

12 which are released in bond from customs 

13 custody for transfer to the bonded premises 

14 of a producer, the transferee shall become 

15 liable for the tax on such articles upon re16 lease from customs custody, and the im17 porter shall thereupon be relieved of their li18 ability for such tax. 

19 ‘‘(B) RETURNED TO BOND.—All provisions 

20 of this chapter applicable to cannabis products 

21 in bond shall be applicable to such articles re22 turned to bond upon withdrawal from the mar23 ket or returned to bond after previous removal 

24 for a tax-exempt purpose. 

25 ‘‘(b) METHOD OF PAYMENT OF TAX.— 


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1 ‘‘(1) IN GENERAL.— 

2 ‘‘(A) TAXES PAID ON BASIS OF RETURN.— 

3 The taxes imposed by section 5901 shall be paid 

4 on the basis of return. The Secretary shall, by 

5 regulations, prescribe the period or the event to 

6 be covered by such return and the information to 

7 be furnished on such return. 

8 ‘‘(B) APPLICATION TO TRANSFEREES.—In 

9 the case of any transfer to which subsection 

10 (a)(2)(A) applies, the tax under section 5901 on 

11 the transferee shall (if not otherwise relieved by 

12 reason of a subsequent transfer to which such 

13 subsection applies) be imposed with respect to the 

14 removal of the cannabis product from the bonded 

15 premises of the transferee. 

16 ‘‘(C) POSTPONEMENT.—Any postponement 

17 under this subsection of the payment of taxes de18 termined at the time of removal shall be condi19 tioned upon the filing of such additional bonds, 

20 and upon compliance with such requirements, as 

21 the Secretary may prescribe for the protection of 

22 the revenue. The Secretary may, by regulations, 

23 require payment of tax on the basis of a return 

24 prior to removal of the cannabis products where 

25 a person defaults in the postponed payment of 


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1 tax on the basis of a return under this subsection 

2 or regulations prescribed thereunder. 

3 ‘‘(D) ADMINISTRATION AND PENALTIES.— 

4 All administrative and penalty provisions of this 

5 title, insofar as applicable, shall apply to any 

6 tax imposed by section 5901. 

7 ‘‘(2) TIME FOR PAYMENT OF TAXES.— 

8 ‘‘(A) IN GENERAL.—Except as otherwise 

9 provided in this paragraph, in the case of taxes 

10 on cannabis products removed during any semi11 monthly period under bond for deferred payment 

12 of tax, the last day for payment of such taxes 

13 shall be the 14th day after the last day of such 

14 semimonthly period. 

15 ‘‘(B) IMPORTED ARTICLES.—In the case of 

16 cannabis products which are imported into the 

17 United States, the following provisions shall 

18 apply: 

19 ‘‘(i) IN GENERAL.—The last day for 

20 payment of tax shall be the 14th day after 

21 the last day of the semimonthly period dur22 ing which the article is entered into the cus23 toms territory of the United States. 

24 ‘‘(ii) SPECIAL RULE FOR ENTRY OF

25 WAREHOUSING.—Except as provided in 


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1 clause (iv), in the case of an entry for 

2 warehousing, the last day for payment of 

3 tax shall not be later than the 14th day 

4 after the last day of the semimonthly period 

5 during which the article is removed from 

6 the first such warehouse. 

7 ‘‘(iii) FOREIGN TRADE ZONES.—Ex8 cept as provided in clause (iv) and in regu9 lations prescribed by the Secretary, articles 

10 brought into a foreign trade zone shall, not11 withstanding any other provision of law, be 

12 treated for purposes of this subsection as if 

13 such zone were a single customs warehouse. 

14 ‘‘(iv) EXCEPTION FOR ARTICLES DES15 TINED FOR EXPORT.—Clauses (ii) and (iii) 

16 shall not apply to any article which is 

17 shown to the satisfaction of the Secretary to 

18 be destined for export. 

19 ‘‘(C) CANNABIS PRODUCTS BROUGHT INTO

20 THE UNITED STATES FROM PUERTO RICO.—In 

21 the case of cannabis products which are brought 

22 into the United States from Puerto Rico and 

23 subject to tax under section 7652, the last day 

24 for payment of tax shall be the 14th day after the 


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1 last day of the semimonthly period during which 

2 the article is brought into the United States. 

3 ‘‘(D) SPECIAL RULE WHERE DUE DATE

4 FALLS ON SATURDAY, SUNDAY, OR HOLIDAY.— 

5 Notwithstanding section 7503, if, but for this 

6 subparagraph, the due date under this para7 graph would fall on a Saturday, Sunday, or a 

8 legal holiday (as defined in section 7503), such 

9 due date shall be the immediately preceding day 

10 which is not a Saturday, Sunday, or such a hol11 iday. 

12 ‘‘(E) SPECIAL RULE FOR UNLAWFULLY PRO13 DUCED CANNABIS PRODUCTS.—In the case of any 

14 cannabis products produced in the United States 

15 at any place other than the premises of a pro16 ducer that has filed the bond and obtained the 

17 permit required under this chapter, tax shall be 

18 due and payable immediately upon production. 

19 ‘‘(3) PAYMENT BY ELECTRONIC FUND TRANS20 FER.—Any person who in any 12-month period, end21 ing December 31, was liable for a gross amount equal 

22 to or exceeding $5,000,000 in taxes imposed on can23 nabis products by section 5901 (or section 7652) shall 

24 pay such taxes during the succeeding calendar year 

25 by electronic fund transfer (as defined in section 


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1 5061(e)(2)) to a Federal Reserve Bank. Rules similar 

2 to the rules of section 5061(e)(3) shall apply to the 

3 $5,000,000 amount specified in the preceding sen4 tence. 

5 ‘‘(c) DETERMINATION OF PRICE.— 

6 ‘‘(1) CONSTRUCTIVE SALE PRICE.— 

7 ‘‘(A) IN GENERAL.—If an article is sold di8 rectly to consumers, sold on consignment, or sold 

9 (otherwise than through an arm’s length trans10 action) at less than the fair market price, or if 

11 the price for which the article sold cannot be de12 termined, the tax under section 5901(a) shall be 

13 computed on the price for which such articles are 

14 sold, in the ordinary course of trade, by pro15 ducers thereof, as determined by the Secretary. 

16 ‘‘(B) ARM’S LENGTH.— 

17 ‘‘(i) IN GENERAL.—For purposes of 

18 this section, a sale is considered to be made 

19 under circumstances otherwise than at 

20 arm’s length if— 

21 ‘‘(I) the parties are members of 

22 the same controlled group, whether or 

23 not such control is actually exercised to 

24 influence the sale price, 


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1 ‘‘(II) the parties are members of a 

2 family, as defined in section 267(c)(4), 

3 or 

4 ‘‘(III) the sale is made pursuant 

5 to special arrangements between a pro6 ducer and a purchaser. 

7 ‘‘(ii) CONTROLLED GROUPS.— 

8 ‘‘(I) IN GENERAL.—The term ‘con9 trolled group’ has the meaning given to 

10 such term by subsection (a) of section 

11 1563, except that ‘more than 50 per12 cent’ shall be substituted for ‘at least 

13 80 percent’ each place it appears in 

14 such subsection. 

15 ‘‘(II) CONTROLLED GROUPS

16 WHICH INCLUDE NONINCORPORATED

17 PERSONS.—Under regulations pre18 scribed by the Secretary, principles 

19 similar to the principles of subclause 

20 (I) shall apply to a group of persons 

21 under common control where one or 

22 more of such persons is not a corpora23 tion. 

24 ‘‘(2) CONTAINERS, PACKING AND TRANSPOR25 TATION CHARGES.—In determining, for the purposes 


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1 of this chapter, the price for which an article is sold, 

2 there shall be included any charge for coverings and 

3 containers of whatever nature, and any charge inci4 dent to placing the article in condition packed ready 

5 for shipment, but there shall be excluded the amount 

6 of tax imposed by this chapter, whether or not stated 

7 as a separate charge. A transportation, delivery, in8 surance, installation, or other charge (not required by 

9 the preceding sentence to be included) shall be ex10 cluded from the price only if the amount thereof is es11 tablished to the satisfaction of the Secretary in ac12 cordance with regulations. 

13 ‘‘(3) DETERMINATION OF APPLICABLE EQUIVA14 LENT AMOUNTS.—Paragraphs (1) and (2) shall apply 

15 for purposes of section 5901(c) only to the extent that 

16 the Secretary determines appropriate. 

17 ‘‘(d) PARTIAL PAYMENTS AND INSTALLMENT AC18 COUNTS.— 

19 ‘‘(1) PARTIAL PAYMENTS.—In the case of— 

20 ‘‘(A) a contract for the sale of an article 

21 wherein it is provided that the price shall be 

22 paid by installments and title to the article sold 

23 does not pass until a future date notwith24 standing partial payment by installments, 

25 ‘‘(B) a conditional sale, or 


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1 ‘‘(C) a chattel mortgage arrangement where2 in it is provided that the sales price shall be 

3 paid in installments, 

4 there shall be paid upon each payment with respect 

5 to the article a percentage of such payment equal to 

6 the rate of tax in effect on the date such payment is 

7 due. 

8 ‘‘(2) SALES OF INSTALLMENT ACCOUNTS.—If in9 stallment accounts, with respect to payments on 

10 which tax is being computed as provided in para11 graph (1), are sold or otherwise disposed of, then 

12 paragraph (1) shall not apply with respect to any 

13 subsequent payments on such accounts (other than 

14 subsequent payments on returned accounts with re15 spect to which credit or refund is allowable by reason 

16 of section 6416(b)(5)), but instead— 

17 ‘‘(A) there shall be paid an amount equal to 

18 the difference between— 

19 ‘‘(i) the tax previously paid on the 

20 payments on such installment accounts, and 

21 ‘‘(ii) the total tax which would be pay22 able if such installment accounts had not 

23 been sold or otherwise disposed of (computed 

24 as provided in paragraph (1)), except that 


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1 ‘‘(B) if any such sale is pursuant to the 

2 order of, or subject to the approval of, a court of 

3 competent jurisdiction in a bankruptcy or insol4 vency proceeding, the amount computed under 

5 subparagraph (A) shall not exceed the sum of the 

6 amounts computed by multiplying— 

7 ‘‘(i) the proportionate share of the 

8 amount for which such accounts are sold 

9 which is allocable to each unpaid install10 ment payment, by 

11 ‘‘(ii) the rate of tax under this chapter 

12 in effect on the date such unpaid install13 ment payment is or was due. 

14 The sum of the amounts payable under this sub15 section in respect of the sale of any article shall 

16 not exceed the total tax. 

17 ‘‘SEC. 5904. EXEMPTION FROM TAX; TRANSFERS IN BOND. 

18 ‘‘(a) EXEMPTION FROM TAX.—Cannabis products on 

19 which the internal revenue tax has not been paid or deter20 mined may, subject to such regulations as the Secretary 

21 shall prescribe, be withdrawn from the bonded premises of 

22 any producer in approved containers free of tax and not 

23 for resale for use— 

24 ‘‘(1) exclusively in scientific research by a lab25 oratory, 


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1 ‘‘(2) by a proprietor of a cannabis production 

2 facility in research, development, or testing (other 

3 than consumer testing or other market analysis) of 

4 processes, systems, materials, or equipment, relating 

5 to cannabis or cannabis operations, under such limi6 tations and conditions as to quantities, use, and ac7 countability as the Secretary may by regulations re8 quire for the protection of the revenue, or 

9 ‘‘(3) by the United States or any governmental 

10 agency thereof, any State, any political subdivision of 

11 a State, or the District of Columbia, for nonconsump12 tion purposes. 

13 ‘‘(b) CANNABIS PRODUCTS TRANSFERRED OR RE14 MOVED IN BOND FROM DOMESTIC FACTORIES AND EXPORT

15 WAREHOUSES.— 

16 ‘‘(1) IN GENERAL.—Subject to such regulations 

17 and under such bonds as the Secretary shall prescribe, 

18 a producer or export warehouse proprietor may trans19 fer cannabis products, without payment of tax, to the 

20 bonded premises of another producer or export ware21 house proprietor, or remove such articles, without 

22 payment of tax, for shipment to a foreign country or 

23 a possession of the United States, or for consumption 

24 beyond the jurisdiction of the internal revenue laws of 

25 the United States. 


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1 ‘‘(2) LABELING.—Cannabis products may not be 

2 transferred or removed under this subsection unless 

3 such products bear such marks, labels, or notices as 

4 the Secretary shall by regulations prescribe. 

5 ‘‘(c) CANNABIS PRODUCTS RELEASED IN BOND FROM

6 CUSTOMS CUSTODY.—Cannabis products imported or 

7 brought into the United States may be released from cus8 toms custody, without payment of tax, for delivery to a pro9 ducer or export warehouse proprietor if such articles are 

10 not put up in packages, in accordance with such regulations 

11 and under such bond as the Secretary shall prescribe. 

12 ‘‘(d) CANNABIS PRODUCTS EXPORTED AND RE13 TURNED.—Cannabis products classifiable under item 

14 9801.00.10 of the Harmonized Tariff Schedule of the United 

15 States (relating to duty on certain articles previously ex16 ported and returned), as in effect on the date of the enact17 ment of the Marijuana Opportunity Reinvestment and 

18 Expungement Act, may be released from customs custody, 

19 without payment of that part of the duty attributable to 

20 the internal revenue tax for delivery to the original pro21 ducer of such cannabis products or to the export warehouse 

22 proprietor authorized by such producer to receive such prod23 ucts, in accordance with such regulations and under such 

24 bond as the Secretary shall prescribe. Upon such release 

25 such products shall be subject to this chapter as if they had 


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1 not been exported or otherwise removed from internal rev2 enue bond. 

3 ‘‘SEC. 5905. CREDIT, REFUND, OR DRAWBACK OF TAX. 

4 ‘‘(a) CREDIT OR REFUND.— 

5 ‘‘(1) IN GENERAL.—Credit or refund of any tax 

6 imposed by this chapter or section 7652 shall be al7 lowed or made (without interest) to the cannabis en8 terprise on proof satisfactory to the Secretary that the 

9 claimant cannabis enterprise has paid the tax on— 

10 ‘‘(A) cannabis products withdrawn from the 

11 market by the claimant, or 

12 ‘‘(B) such products lost (otherwise than by 

13 theft) or destroyed, by fire, casualty, or act of 

14 God, while in the possession or ownership of the 

15 claimant. 

16 ‘‘(2) CANNABIS PRODUCTS LOST OR DESTROYED

17 IN BOND.— 

18 ‘‘(A) EXTENT OF LOSS ALLOWANCE.—No 

19 tax shall be collected in respect of cannabis prod20 ucts lost or destroyed while in bond, except that 

21 such tax shall be collected— 

22 ‘‘(i) in the case of loss by theft, unless 

23 the Secretary finds that the theft occurred 

24 without connivance, collusion, fraud, or 

25 negligence on the part of the proprietor of 


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1 the cannabis production facility, owner, 

2 consignor, consignee, bailee, or carrier, or 

3 their employees or agents, 

4 ‘‘(ii) in the case of voluntary destruc5 tion, unless such destruction is carried out 

6 as provided in paragraph (3), and 

7 ‘‘(iii) in the case of an unexplained 

8 shortage of cannabis products. 

9 ‘‘(B) PROOF OF LOSS.—In any case in 

10 which cannabis products are lost or destroyed, 

11 whether by theft or otherwise, the Secretary may 

12 require the proprietor of a cannabis production 

13 facility or other person liable for the tax to file 

14 a claim for relief from the tax and submit proof 

15 as to the cause of such loss. In every case where 

16 it appears that the loss was by theft, the burden 

17 shall be upon the proprietor of the cannabis pro18 duction facility or other person responsible for 

19 the tax under section 5901 to establish to the sat20 isfaction of the Secretary that such loss did not 

21 occur as the result of connivance, collusion, 

22 fraud, or negligence on the part of the proprietor 

23 of the cannabis production facility, owner, con24 signor, consignee, bailee, or carrier, or their em25 ployees or agents. 


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1 ‘‘(C) REFUND OF TAX.—In any case where 

2 the tax would not be collectible by virtue of sub3 paragraph (A), but such tax has been paid, the 

4 Secretary shall refund such tax. 

5 ‘‘(D) LIMITATIONS.—Except as provided in 

6 subparagraph (E), no tax shall be abated, remit7 ted, credited, or refunded under this paragraph 

8 where the loss occurred after the tax was deter9 mined. The abatement, remission, credit, or re10 fund of taxes provided for by subparagraphs (A) 

11 and (C) in the case of loss of cannabis products 

12 by theft shall only be allowed to the extent that 

13 the claimant is not indemnified against or rec14 ompensed in respect of the tax for such loss. 

15 ‘‘(E) APPLICABILITY.—The provisions of 

16 this paragraph shall extend to and apply in re17 spect of cannabis products lost after the tax was 

18 determined and before completion of the physical 

19 removal of the cannabis products from the bond20 ed premises. 

21 ‘‘(3) VOLUNTARY DESTRUCTION.—The proprietor 

22 of a cannabis production facility or other persons lia23 ble for the tax imposed by this chapter or by section 

24 7652 with respect to any cannabis product in bond 

25 may voluntarily destroy such products, but only if 


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1 such destruction is under such supervision and under 

2 such regulations as the Secretary may prescribe. 

3 ‘‘(4) LIMITATION.—Any claim for credit or re4 fund of tax under this subsection shall be filed within 

5 6 months after the date of the withdrawal from the 

6 market, loss, or destruction of the products to which 

7 the claim relates, and shall be in such form and con8 tain such information as the Secretary shall by regu9 lations prescribe. 

10 ‘‘(b) DRAWBACK OF TAX.—There shall be an allowance 

11 of drawback of tax paid on cannabis products, when 

12 shipped from the United States, in accordance with such 

13 regulations and upon the filing of such bond as the Sec14 retary shall prescribe. 

15 ‘‘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. 

16 ‘‘SEC. 5911. IMPOSITION AND RATE OF TAX. 

17 ‘‘(a) IN GENERAL.—Any person engaged in business 

18 as a producer or an export warehouse proprietor shall pay 

19 a tax of $1,000 per year (referred to in this subchapter as 

20 an ‘occupational tax’) in respect of each premises at which 

21 such business is carried on. 

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1 house proprietor who willfully fails to pay the occupation 

2 tax shall be fined not more than $5,000, or imprisoned not 

3 more than 2 years, or both, for each such offense. 

4 ‘‘SEC. 5912. PAYMENT OF TAX. 

5 ‘‘(a) CONDITION PRECEDENT TO CARRYING ON BUSI6 NESS.—No person shall be engaged in or carry on any trade 

7 or business subject to the occupational tax until such person 

8 has paid such tax. 

9 ‘‘(b) COMPUTATION.— 

10 ‘‘(1) IN GENERAL.—The occupational tax shall 

11 be imposed— 

12 ‘‘(A) as of on the first day of July in each 

13 year, or 

14 ‘‘(B) on commencing any trade or business 

15 on which such tax is imposed. 

16 ‘‘(2) PERIOD.—In the case of a tax imposed 

17 under subparagraph (A) of paragraph (1), the occu18 pational tax shall be reckoned for 1 year, and in the 

19 case of subparagraph (B) of such paragraph, it shall 

20 be reckoned proportionately, from the first day of the 

21 month in which the liability to such tax commenced, 

22 to and including the 30th day of June following. 

23 ‘‘(c) METHOD OF PAYMENT.— 


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1 ‘‘(1) PAYMENT BY RETURN.—The occupational 

2 tax shall be paid on the basis of a return under such 

3 regulations as the Secretary shall prescribe. 

4 ‘‘(2) STAMP DENOTING PAYMENT OF TAX.—After 

5 receiving a properly executed return and remittance 

6 of any occupational tax, the Secretary shall issue to 

7 the taxpayer an appropriate stamp as a receipt de8 noting payment of the tax. This paragraph shall not 

9 apply in the case of a return covering liability for a 

10 past period. 

11 ‘‘SEC. 5913. PROVISIONS RELATING TO LIABILITY FOR OC12 CUPATIONAL TAXES. 

13 ‘‘(a) PARTNERS.—Any number of persons doing busi14 ness in partnership at any one place shall be required to 

15 pay a single occupational tax. 

16 ‘‘(b) DIFFERENT BUSINESSES OF SAME OWNERSHIP

17 AND LOCATION.—Whenever more than one of the pursuits 

18 or occupations described in this subchapter are carried on 

19 in the same place by the same person at the same time, 

20 except as otherwise provided in this subchapter, the occupa21 tional tax shall be paid for each according to the rates sever22 ally prescribed. 

23 ‘‘(c) BUSINESSES IN MORE THAN ONE LOCATION.— 

24 ‘‘(1) LIABILITY FOR TAX.—The payment of the 

25 occupational tax shall not exempt from an additional 


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1 occupational tax the person carrying on a trade or 

2 business in any other place than that stated in the 

3 records of the Internal Revenue Service. 

4 ‘‘(2) STORAGE.—Nothing contained in para5 graph (1) shall require imposition of an occupational 

6 tax for the storage of cannabis products at a location 

7 other than the place where such products are sold or 

8 offered for sale. 

9 ‘‘(3) PLACE.— 

10 ‘‘(A) IN GENERAL.—For purposes of this 

11 section, the term ‘place’ means the entire office, 

12 plant or area of the business in any one location 

13 under the same proprietorship. 

14 ‘‘(B) DIVISIONS.—For purposes of this 

15 paragraph, any passageways, streets, highways, 

16 rail crossings, waterways, or partitions dividing 

17 the premises shall not be deemed sufficient sepa18 ration to require an additional occupational tax, 

19 if the various divisions are otherwise contiguous. 

20 ‘‘(d) DEATH OR CHANGE OF LOCATION.— 

21 ‘‘(1) IN GENERAL.—In addition to the person 

22 who has paid the occupational tax for the carrying on 

23 of any business at any place, any person described in 

24 paragraph (2) may secure the right to carry on, with25 out incurring any additional occupational tax, the 


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1 same business at the same place for the remainder of 

2 the taxable period for which the occupational tax was 

3 paid. 

4 ‘‘(2) ELIGIBLE PERSONS.—The persons described 

5 in this paragraph are the following: 

6 ‘‘(A) The surviving spouse or child, or ex7 ecutor or administrator or other legal representa8 tive, of a deceased taxpayer. 

9 ‘‘(B) A husband or wife succeeding to the 

10 business of his or her living spouse. 

11 ‘‘(C) A receiver or trustee in bankruptcy, or 

12 an assignee for benefit of creditors. 

13 ‘‘(D) The partner or partners remaining 

14 after death or withdrawal of a member of a part15 nership. 

16 ‘‘(3) CHANGE OF LOCATION.—When any person 

17 moves to any place other than the place for which oc18 cupational tax was paid for the carrying on of any 

19 business, such person may secure the right to carry 

20 on, without incurring additional occupational tax, 

21 the same business at the new location for the remain22 der of the taxable period for which the occupational 

23 tax was paid. To secure the right to carry on the 

24 business without incurring additional occupational 

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1 ness, must register the succession or relocation with 

2 the Secretary in accordance with regulations pre3 scribed by the Secretary. 

4 ‘‘(e) FEDERAL AGENCIES OR INSTRUMENTALITIES.— 

5 Any tax imposed by this subchapter shall apply to any 

6 agency or instrumentality of the United States unless such 

7 agency or instrumentality is granted by statute a specific 

8 exemption from such tax. 

9 ‘‘SEC. 5914. APPLICATION TO STATE LAWS. 

10 ‘‘The payment of any tax imposed by this subchapter 

11 for carrying on any trade or business shall not be held to— 

12 ‘‘(1) exempt any person from any penalty or 

13 punishment provided by the laws of any State for 

14 carrying on such trade or business within such State, 

15 or in any manner to authorize the commencement or 

16 continuance of such trade or business contrary to the 

17 laws of such State or in places prohibited by munic18 ipal law, or 

19 ‘‘(2) prohibit any State from placing a duty or 

20 tax on the same trade or business, for State or other 

21 purposes. 

22 ‘‘Subchapter C—Bond and Permits 

‘‘Sec. 5921. Establishment and bond. 

‘‘Sec. 5922. Application for permit. 

‘‘Sec. 5923. Permit. 


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1 ‘‘SEC. 5921. ESTABLISHMENT AND BOND. 

2 ‘‘(a) PROHIBITION ON PRODUCTION OUTSIDE OF

3 BONDED CANNABIS PRODUCTION FACILITY.— 

4 ‘‘(1) IN GENERAL.—Except as authorized by the 

5 Secretary or on the bonded premises of a cannabis 

6 production facility duly authorized to produce can7 nabis products according to law, no cannabis product 

8 may planted, cultivated, harvested, grown, manufac9 tured, produced, compounded, converted, processed, 

10 prepared, or packaged in any building or on any 

11 premises. 

12 ‘‘(2) AUTHORIZED PRODUCERS ONLY.—No per13 son other than a producer which has filed the bond 

14 required under subsection (b) and received a permit 

15 described in section 5923 may produce any cannabis 

16 product. 

17 ‘‘(3) PERSONAL USE EXCEPTION.—This sub18 section shall not apply with respect the activities of 

19 an individual who is not treated as a producer by 

20 reason of section 5902(b)(2)(B). 

21 ‘‘(b) BOND.— 

22 ‘‘(1) WHEN REQUIRED.—Every person, before 

23 commencing business as a producer or an export 

24 warehouse proprietor, shall file such bond, conditioned 

25 upon compliance with this chapter and regulations 

26 issued thereunder, in such form, amount, and manner 


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1 as the Secretary shall by regulation prescribe. A new 

2 or additional bond may be required whenever the Sec3 retary considers such action necessary for the protec4 tion of the revenue. 

5 ‘‘(2) APPROVAL OR DISAPPROVAL.—No person 

6 shall engage in such business until he receives notice 

7 of approval of such bond. A bond may be disapproved, 

8 upon notice to the principal on the bond, if the Sec9 retary determines that the bond is not adequate to 

10 protect the revenue. 

11 ‘‘(3) CANCELLATION.—Any bond filed hereunder 

12 may be canceled, upon notice to the principal on the 

13 bond, whenever the Secretary determines that the 

14 bond no longer adequately protects the revenue. 

15 ‘‘SEC. 5922. APPLICATION FOR PERMIT. 

16 ‘‘(a) IN GENERAL.—Every person, before commencing 

17 business as a cannabis enterprise, and at such other time 

18 as the Secretary shall by regulation prescribe, shall make 

19 application for the permit provided for in section 5923. The 

20 application shall be in such form as the Secretary shall pre21 scribe and shall set forth, truthfully and accurately, the in22 formation called for on the form. Such application may be 

23 rejected and the permit denied if the Secretary, after notice 

24 and opportunity for hearing, finds that— 


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1 ‘‘(1) the premises on which it is proposed to con2 duct the cannabis enterprise are not adequate to pro3 tect the revenue, or 

4 ‘‘(2) such person (including, in the case of a cor5 poration, any officer, director, or principal stock6 holder and, in the case of a partnership, a partner) 

7 has failed to disclose any material information re8 quired or made any material false statement in the 

9 application therefor. 

10 ‘‘SEC. 5923. PERMIT. 

11 ‘‘(a) ISSUANCE.—A person shall not engage in business 

12 as a cannabis enterprise without a permit to engage in such 

13 business. Such permit, conditioned upon compliance with 

14 this chapter and regulations issued thereunder, shall be 

15 issued in such form and in such manner as the Secretary 

16 shall by regulation prescribe. A new permit may be required 

17 at such other time as the Secretary shall by regulation pre18 scribe. 

19 ‘‘(b) SUSPENSION OR REVOCATION.— 

20 ‘‘(1) SHOW CAUSE HEARING.—If the Secretary 

21 has reason to believe that any person holding a per22 mit— 

23 ‘‘(A) has not in good faith complied with 

24 this chapter, or with any other provision of this 

25 title involving intent to defraud, 


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1 ‘‘(B) has violated the conditions of such per2 mit, 

3 ‘‘(C) has failed to disclose any material in4 formation required or made any material false 

5 statement in the application for such permit, or 

6 ‘‘(D) has failed to maintain their premises 

7 in such manner as to protect the revenue, 

8 the Secretary shall issue an order, stating the facts 

9 charged, citing such person to show cause why their 

10 permit should not be suspended or revoked. 

11 ‘‘(2) ACTION FOLLOWING HEARING.—If, after 

12 hearing, the Secretary finds that such person has not 

13 shown cause why their permit should not be sus14 pended or revoked, such permit shall be suspended for 

15 such period as the Secretary deems proper or shall be 

16 revoked. 

17 ‘‘(c) INFORMATION REPORTING.—The Secretary may 

18 require— 

19 ‘‘(1) information reporting by any person issued 

20 a permit under this section, and 

21 ‘‘(2) information reporting by such other persons 

22 as the Secretary deems necessary to carry out this 

23 chapter. 


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1 ‘‘(d) INSPECTION OR DISCLOSURE OF INFORMATION.— 

2 For rules relating to inspection and disclosure of returns 

3 and return information, see section 6103(o). 

4 ‘‘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. 

5 ‘‘SEC. 5931. INVENTORIES, REPORTS, AND RECORDS. 

6 ‘‘Every cannabis enterprise shall— 

7 ‘‘(1) make a true and accurate inventory at the 

8 time of commencing business, at the time of con9 cluding business, and at such other times, in such 

10 manner and form, and to include such items, as the 

11 Secretary shall by regulation prescribe, with such in12 ventories to be subject to verification by any internal 

13 revenue officer, 

14 ‘‘(2) make reports containing such information, 

15 in such form, at such times, and for such periods as 

16 the Secretary shall by regulation prescribe, and 

17 ‘‘(3) keep such records in such manner as the 

18 Secretary shall by regulation prescribe, with such 

19 records to be available for inspection by any internal 

20 revenue officer during business hours. 


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1 ‘‘SEC. 5932. PACKAGING AND LABELING. 

2 ‘‘(a) PACKAGES.—All cannabis products shall, before 

3 removal, be put up in such packages as the Secretary shall 

4 by regulation prescribe. 

5 ‘‘(b) MARKS, LABELS, AND NOTICES.—Every package 

6 of cannabis products shall, before removal, bear the marks, 

7 labels, and notices if any, that the Secretary by regulation 

8 prescribes. 

9 ‘‘(c) LOTTERY FEATURES.—No certificate, coupon, or 

10 other device purporting to be or to represent a ticket, 

11 chance, share, or an interest in, or dependent on, the event 

12 of a lottery shall be contained in, attached to, or stamped, 

13 marked, written, or printed on any package of cannabis 

14 products. 

15 ‘‘(d) INDECENT OR IMMORAL MATERIAL PROHIB16 ITED.—No indecent or immoral picture, print, or represen17 tation shall be contained in, attached to, or stamped, 

18 marked, written, or printed on any package of cannabis 

19 products. 

20 ‘‘(e) EXCEPTIONS.—Subject to regulations prescribed 

21 by the Secretary, cannabis products may be exempted from 

22 subsections (a) and (b) if such products are— 

23 ‘‘(1) for experimental purposes, or 

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1 leased in bond from customs custody for delivery to 

2 a producer. 

3 ‘‘SEC. 5933. PURCHASE, RECEIPT, POSSESSION, OR SALE OF 

4 CANNABIS PRODUCTS AFTER REMOVAL. 

5 ‘‘(a) RESTRICTION.—No person shall— 

6 ‘‘(1) with intent to defraud the United States, 

7 purchase, receive, possess, offer for sale, or sell or oth8 erwise dispose of, after removal, any cannabis prod9 ucts— 

10 ‘‘(A) upon which the tax has not been paid 

11 or determined in the manner and at the time 

12 prescribed by this chapter or regulations there13 under, or 

14 ‘‘(B) which, after removal without payment 

15 of tax pursuant to section 5904(a), have been di16 verted from the applicable purpose or use speci17 fied in that section, 

18 ‘‘(2) with intent to defraud the United States, 

19 purchase, receive, possess, offer for sale, or sell or oth20 erwise dispose of, after removal, any cannabis prod21 ucts which are not put up in packages as required 

22 under section 5932 or which are put up in packages 

23 not bearing the marks, labels, and notices, as required 

24 under such section, or 


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1 ‘‘(3) otherwise than with intent to defraud the 

2 United States, purchase, receive, possess, offer for sale, 

3 or sell or otherwise dispose of, after removal, any can4 nabis products which are not put up in packages as 

5 required under section 5932 or which are put up in 

6 packages not bearing the marks, labels, and notices, 

7 as required under such section. 

8 ‘‘(b) EXCEPTION.—Paragraph (3) of subsection (a) 

9 shall not prevent the sale or delivery of cannabis products 

10 directly to consumers from proper packages, nor apply to 

11 such articles when so sold or delivered. 

12 ‘‘(c) LIABILITY TO TAX.—Any person who possesses 

13 cannabis products in violation of paragraph (1) or (2) of 

14 subsection (a) shall be liable for a tax equal to the tax on 

15 such articles. 

16 ‘‘SEC. 5934. RESTRICTIONS RELATING TO MARKS, LABELS, 

17 NOTICES, AND PACKAGES. 

18 ‘‘No person shall, with intent to defraud the United 

19 States, destroy, obliterate, or detach any mark, label, or no20 tice prescribed or authorized, by this chapter or regulations 

21 thereunder, to appear on, or be affixed to, any package of 

22 cannabis products before such package is emptied. 

23 ‘‘SEC. 5935. RESTRICTION ON IMPORTATION OF PRE24 VIOUSLY EXPORTED CANNABIS PRODUCTS. 

25 ‘‘(a) EXPORT LABELED CANNABIS PRODUCTS.— 


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1 ‘‘(1) IN GENERAL.—Cannabis products produced 

2 in the United States and labeled for exportation 

3 under this chapter— 

4 ‘‘(A) may be transferred to or removed from 

5 the premises of a producer or an export ware6 house proprietor only if such articles are being 

7 transferred or removed without tax in accord8 ance with section 5904, 

9 ‘‘(B) may be imported or brought into the 

10 United States, after their exportation, only if 

11 such articles either are eligible to be released 

12 from customs custody with the partial duty ex13 emption provided in section 5904(d) or are re14 turned to the original producer of such article as 

15 provided in section 5904(c), and 

16 ‘‘(C) may not be sold or held for sale for do17 mestic consumption in the United States unless 

18 such articles are removed from their export pack19 aging and repackaged by the original producer 

20 into new packaging that does not contain an ex21 port label. 

22 ‘‘(2) ALTERATIONS BY PERSONS OTHER THAN

23 ORIGINAL PRODUCER.—This section shall apply to ar24 ticles labeled for export even if the packaging or the 

25 appearance of such packaging to the consumer of such 


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1 articles has been modified or altered by a person other 

2 than the original producer so as to remove or conceal 

3 or attempt to remove or conceal (including by the 

4 placement of a sticker over) any export label. 

5 ‘‘(3) EXPORTS INCLUDE SHIPMENTS TO PUERTO

6 RICO.—For purposes of this section, section 5904(d), 

7 section 5941, and such other provisions as the Sec8 retary may specify by regulations, references to expor9 tation shall be treated as including a reference to 

10 shipment to the Commonwealth of Puerto Rico. 

11 ‘‘(b) EXPORT LABEL.—For purposes of this section, an 

12 article is labeled for export or contains an export label if 

13 it bears the mark, label, or notice required under section 

14 5904(b). 

15 ‘‘Subchapter E—Penalties 

‘‘Sec. 5941. Civil penalties. 

‘‘Sec. 5942. Criminal penalties. 

16 ‘‘SEC. 5941. CIVIL PENALTIES. 

17 ‘‘(a) OMITTING THINGS REQUIRED OR DOING THINGS

18 FORBIDDEN.—Whoever willfully omits, neglects, or refuses 

19 to comply with any duty imposed upon them by this chap20 ter, or to do, or cause to be done, any of the things required 

21 by this chapter, or does anything prohibited by this chapter, 

22 shall in addition to any other penalty provided in this title, 

23 be liable to a penalty of $10,000, to be recovered, with costs 

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1 section (b) or (c) or under section 6651 or 6653 or part 

2 II of subchapter A of chapter 68 may be collected from such 

3 person by assessment. 

4 ‘‘(b) FAILURE TO PAY TAX.—Whoever fails to pay any 

5 tax imposed by this chapter at the time prescribed by law 

6 or regulations, shall, in addition to any other penalty pro7 vided in this title, be liable to a penalty of 10 percent of 

8 the tax due but unpaid. 

9 ‘‘(c) SALE OF CANNABIS OR CANNABIS PRODUCTS FOR

10 EXPORT.— 

11 ‘‘(1) Every person who sells, relands, or receives 

12 within the jurisdiction of the United States any can13 nabis products which have been labeled or shipped for 

14 exportation under this chapter, 

15 ‘‘(2) every person who sells or receives such re16 landed cannabis products, and 

17 ‘‘(3) every person who aids or abets in such sell18 ing, relanding, or receiving, 

19 shall, in addition to the tax and any other penalty provided 

20 in this title, be liable for a penalty equal to the greater of 

21 $10,000 or 10 times the amount of the tax imposed by this 

22 chapter. All cannabis products relanded within the jurisdic23 tion of the United States shall be forfeited to the United 

24 States and destroyed. All vessels, vehicles, and aircraft used 

25 in such relanding or in removing such cannabis products 


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1 from the place where relanded, shall be forfeited to the 

2 United States. 

3 ‘‘(d) APPLICABILITY OF SECTION 6665.—The penalties 

4 imposed by subsections (b) and (c) shall be assessed, col5 lected, and paid in the same manner as taxes, as provided 

6 in section 6665(a). 

7 ‘‘(e) CROSS REFERENCES.—For penalty for failure to 

8 make deposits or for overstatement of deposits, see section 

9 6656. 

10 ‘‘SEC. 5942. CRIMINAL PENALTIES. 

11 ‘‘(a) FRAUDULENT OFFENSES.—Whoever, with intent 

12 to defraud the United States— 

13 ‘‘(1) engages in business as a cannabis enterprise 

14 without filing the application and obtaining the per15 mit where required by this chapter or regulations 

16 thereunder, 

17 ‘‘(2) fails to keep or make any record, return, re18 port, or inventory, or keeps or makes any false or 

19 fraudulent record, return, report, or inventory, re20 quired by this chapter or regulations thereunder, 

21 ‘‘(3) refuses to pay any tax imposed by this 

22 chapter, or attempts in any manner to evade or de23 feat the tax or the payment thereof, 


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1 ‘‘(4) sells or otherwise transfers, contrary to this 

2 chapter or regulations thereunder, any cannabis prod3 ucts subject to tax under this chapter, or 

4 ‘‘(5) purchases, receives, or possesses, with intent 

5 to redistribute or resell, any cannabis product— 

6 ‘‘(A) upon which the tax has not been paid 

7 or determined in the manner and at the time 

8 prescribed by this chapter or regulations there9 under, or 

10 ‘‘(B) which, without payment of tax pursu11 ant to section 5904, have been diverted from the 

12 applicable purpose or use specified in that sec13 tion, 

14 shall, for each such offense, be fined not more than $10,000, 

15 or imprisoned not more than 5 years, or both. 

16 ‘‘(b) LIABILITY TO TAX.—Any person who possesses 

17 cannabis products in violation of subsection (a) shall be lia18 ble for a tax equal to the tax on such articles.’’. 

19 (c) STUDY.—Not later than 2 years after the date of 

20 the enactment of this Act, and every 5 years thereafter, the 

21 Secretary of the Treasury, or the Secretary’s delegate, 

22 shall— 

23 (1) conduct a study concerning the characteris24 tics of the cannabis industry, including the number of 

25 persons operating cannabis enterprises at each level of 


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1 such industry, the volume of sales, the amount of tax 

2 collected each year, and the areas of evasion, and 

3 (2) submit to Congress recommendations to im4 prove the regulation of the industry and the adminis5 tration of the related tax. 

6 (d) ANNUAL REPORTS REGARDING DETERMINATION

7 OF APPLICABLE RATES.—Not later than 6 months before 

8 the beginning of each calendar year to which section 

9 5901(a)(2) of the Internal Revenue Code of 1986 (as added 

10 by this section) applies, the Secretary of the Treasury, or 

11 the Secretary’s delegate, shall make publicly available a de12 tailed description of the methodology which the Secretary 

13 anticipates using to determine the applicable rate per ounce 

14 and the applicable rate per gram which will apply for such 

15 calendar year under section 5901(c)(2) of such Code. 

16 (e) CONFORMING AMENDMENTS.— 

17 (1) Section 6103(o)(1)(A) of the Internal Rev18 enue Code of 1986 is amended by striking ‘‘and fire19 arms’’ and inserting ‘‘firearms, and cannabis prod20 ucts’’. 

21 (2) The table of chapters for subtitle E of such 

22 Code is amended by adding at the end the following 

23 new item: 


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‘‘CHAPTER 56. CANNABIS PRODUCTS’’. 

1 (3) The table of sections for subchapter A of 

2 chapter 98 of such Code is amended by adding at the 

3 end the following new item: 

‘‘Sec. 9512. Establishment of Opportunity Trust Fund.’’. 

4 (f) EFFECTIVE DATE.— 

5 (1) IN GENERAL.—Except as otherwise provided 

6 in this subsection, the amendments made by this sec7 tion shall apply to removals, and applications for 

8 permits under section 5922 of the Internal Revenue 

9 Code of 1986 (as added by subsection (b)), after 180 

10 days after the date of the enactment of this Act. 

11 (2) ESTABLISHMENT OF TRUST FUND.—The 

12 amendment made by subsection (a) shall take effect 

13 on the date of the enactment of this Act. 

14 SEC. 6. OPPORTUNITY TRUST FUND PROGRAMS. 

15 (a) CANNABIS JUSTICE OFFICE; COMMUNITY REIN16 VESTMENT GRANT PROGRAM.— 

17 (1) CANNABIS JUSTICE OFFICE.—Part A of title 

18 I of the Omnibus Crime Control and Safe Streets Act 

19 of 1968 (34 U.S.C. 10101 et seq.) is amended by in20 serting after section 109 the following: 

21 ‘‘SEC. 110. CANNABIS JUSTICE OFFICE. 

22 ‘‘(a) ESTABLISHMENT.—There is established within 

23 the Office of Justice Programs a Cannabis Justice Office. 


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1 ‘‘(b) DIRECTOR.—The Cannabis Justice Office shall be 

2 headed by a Director who shall be appointed by the Assist3 ant Attorney General for the Office of Justice Programs. 

4 The Director shall report to the Assistant Attorney General 

5 for the Office of Justice Programs. The Director shall award 

6 grants and may enter into compacts, cooperative agree7 ments, and contracts on behalf of the Cannabis Justice Of8 fice. The Director may not engage in any employment other 

9 than that of serving as the Director, nor may the Director 

10 hold any office in, or act in any capacity for, any organiza11 tion, agency, or institution with which the Office makes any 

12 contract or other arrangement. 

13 ‘‘(c) EMPLOYEES.— 

14 ‘‘(1) IN GENERAL.—The Director shall employ as 

15 many full-time employees as are needed to carry out 

16 the duties and functions of the Cannabis Justice Of17 fice under subsection (d). Such employees shall be ex18 clusively assigned to the Cannabis Justice Office. 

19 ‘‘(2) INITIAL HIRES.—Not later than 6 months 

20 after the date of enactment of this section, the Direc21 tor shall— 

22 ‘‘(A) hire no less than one-third of the total 

23 number of employees of the Cannabis Justice Of24 fice; and 


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1 ‘‘(B) no more than one-half of the employees 

2 assigned to the Cannabis Justice Office by term 

3 appointment that may after 2 years be converted 

4 to career appointment. 

5 ‘‘(3) LEGAL COUNSEL.—At least one employee 

6 hired for the Cannabis Justice Office shall serve as 

7 legal counsel to the Director and shall provide counsel 

8 to the Cannabis Justice Office. 

9 ‘‘(d) DUTIES AND FUNCTIONS.—The Cannabis Justice 

10 Office is authorized to— 

11 ‘‘(1) administer the Community Reinvestment 

12 Grant Program; and 

13 ‘‘(2) perform such other functions as the Assist14 ant Attorney General for the Office of Justice Pro15 grams may delegate, that are consistent with the stat16 utory obligations of this section.’’. 

17 (2) COMMUNITY REINVESTMENT GRANT PRO18 GRAM.—Title I of the Omnibus Crime Control and 

19 Safe Streets Act of 1968 (34 U.S.C. et seq.) is amend20 ed by adding at the end the following: 

21 ‘‘PART PP—COMMUNITY REINVESTMENT GRANT 

22 PROGRAM 

23 ‘‘SEC. 3056. AUTHORIZATION. 

24 ‘‘(a) IN GENERAL.—The Director of the Cannabis Jus25 tice Office shall establish and carry out a grant program, 


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1 known as the ‘Community Reinvestment Grant Program’, 

2 to provide eligible entities with funds to administer services 

3 for individuals adversely impacted by the War on Drugs, 

4 including— 

5 ‘‘(1) job training; 

6 ‘‘(2) reentry services; 

7 ‘‘(3) legal aid for civil and criminal cases, in8 cluding expungement of cannabis convictions; 

9 ‘‘(4) literacy programs; 

10 ‘‘(5) youth recreation or mentoring programs; 

11 and 

12 ‘‘(6) health education programs. 

13 ‘‘(b) SUBSTANCE USE DISORDER SERVICES.—The Di14 rector, in consultation with the Secretary of Health and 

15 Human Services, shall provide eligible entities with funds 

16 to administer substance use disorder services for individuals 

17 adversely impacted by the War on Drugs or connect pa18 tients with substance use disorder services. Also eligible for 

19 such services are individuals who have been arrested for or 

20 convicted of the sale, possession, use, manufacture, or cul21 tivation of a controlled substance other than cannabis (ex22 cept for a conviction involving distribution to a minor). 


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1 ‘‘SEC. 3057. FUNDING FROM OPPORTUNITY TRUST FUND. 

2 ‘‘The Director shall carry out the program under this 

3 part using funds made available under section 9512(c)(1) 

4 and (2) of the Internal Revenue Code. 

5 ‘‘SEC. 3058. DEFINITIONS. 

6 ‘‘In this part: 

7 ‘‘(1) The term ‘cannabis conviction’ means a 

8 conviction, or adjudication of juvenile delinquency, 

9 for a cannabis offense (as such term is defined in sec10 tion 13 of the Marijuana Opportunity Reinvestment 

11 and Expungement Act). 

12 ‘‘(2) The term ‘eligible entity’ means a nonprofit 

13 organization, as defined in section 501(c)(3) of the 

14 Internal Revenue Code, that is representative of a 

15 community or a significant segment of a community 

16 with experience in providing relevant services to indi17 viduals adversely impacted by the War on Drugs in 

18 that community. 

19 ‘‘(3) The term ‘individuals adversely impacted 

20 by the War on Drugs’ has the meaning given that 

21 term in section 6 of the Marijuana Opportunity Re22 investment and Expungement Act.’’. 

23 (b) CANNABIS RESTORATIVE OPPORTUNITY PROGRAM; 

24 EQUITABLE LICENSING GRANT PROGRAM.— 

25 (1) CANNABIS RESTORATIVE OPPORTUNITY PRO26 GRAM.—The Administrator of the Small Business AdVerDate Sep 11 2014 19:31 Mar 24, 2022 Jkt 029200 PO 00000 Frm 00066 Fmt 6652 Sfmt 6203 E:\BILLS\H3617.RH H3617

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1 ministration shall establish and carry out a program, 

2 to be known as the ‘‘Cannabis Restorative Oppor3 tunity Program’’, to provide loans and technical as4 sistance under section 7(m) of the Small Business Act 

5 (15 U.S.C. 636(m)) to assist small business concerns 

6 owned and controlled by socially and economically 

7 disadvantaged individuals that operate in eligible 

8 States or localities. 

9 (2) EQUITABLE LICENSING GRANT PROGRAM.— 

10 The Administrator of the Small Business Administra11 tion shall establish and carry out a grant program, 

12 to be known as the ‘‘Equitable Licensing Grant Pro13 gram’’, to provide any eligible State or locality funds 

14 to develop and implement equitable cannabis licens15 ing programs that minimize barriers to cannabis li16 censing and employment for individuals adversely 

17 impacted by the War on Drugs, provided that each 

18 grantee includes in its cannabis licensing program at 

19 least four of the following elements: 

20 (A) A waiver of cannabis license applica21 tion fees for individuals who report an income 

22 below 250 percent of the Federal Poverty Level 

23 for at least 5 of the past 10 years and who are 

24 first-time applicants for a cannabis license. 


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1 (B) A prohibition on the denial of a can2 nabis license based on a conviction for a can3 nabis offense that took place prior to State legal4 ization of cannabis or the date of enactment of 

5 this Act, as appropriate. 

6 (C) A prohibition on restrictions for licens7 ing relating to criminal convictions except with 

8 respect to a criminal conviction related to own9 ing and operating a business. 

10 (D) A prohibition on cannabis license hold11 ers engaging in suspicionless cannabis drug test12 ing of their prospective or current employees, ex13 cept with respect to drug testing for safety-sen14 sitive positions required under part 40 of title 

15 49, Code of Federal Regulations. 

16 (E) The establishment of a cannabis licens17 ing board that is reflective of the racial, ethnic, 

18 economic, and gender composition of the eligible 

19 State or locality, to serve as an oversight body 

20 of the equitable licensing program. 

21 (3) DEFINITIONS.—In this subsection: 

22 (A) ELIGIBLE STATE OR LOCALITY.—The 

23 term ‘‘eligible State or locality’’ means a State 

24 or locality that has taken steps to— 


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1 (i) create an automatic process, at no 

2 cost to the individual, for the expungement, 

3 destruction, or sealing of criminal records 

4 for cannabis offenses; and 

5 (ii) eliminate violations or other pen6 alties for persons under parole, probation, 

7 pre-trial, or other State or local criminal 

8 supervision for a cannabis offense. 

9 (B) INDIVIDUAL ADVERSELY IMPACTED BY

10 THE WAR ON DRUGS.—The term ‘‘individual ad11 versely impacted by the War on Drugs’’ means 

12 an individual— 

13 (i) who reports an income below 250 

14 percent of the Federal Poverty Level for at 

15 least 5 of the past 10 years; and 

16 (ii) who has been arrested for or con17 victed of the sale, possession, use, manufac18 ture, or cultivation of cannabis (except for 

19 a conviction involving distribution to a 

20 minor), or whose parent, sibling, spouse, or 

21 child has been arrested for or convicted of 

22 such an offense. 

23 (C) SMALL BUSINESS CONCERN OWNED AND

24 CONTROLLED BY SOCIALLY AND ECONOMICALLY

25 DISADVANTAGED INDIVIDUALS.—The term ‘‘small 


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1 business concern owned and controlled by so2 cially and economically disadvantaged individ3 uals’’ has the meaning given in section 

4 8(d)(3)(C) of the Small Business Act (15 U.S.C. 

5 637(d)(3)(C)). 

6 (D) STATE.—The term ‘‘State’’ means each 

7 of the several States, the District of Columbia, 

8 Puerto Rico, any territory or possession of the 

9 United States, and any Indian Tribe (as defined 

10 in section 201 of Public Law 90–294 (25 U.S.C. 

11 1301) (commonly known as the ‘‘Indian Civil 

12 Rights Act of 1968’’)). 

13 (c) STUDY ON PROGRAMS.— 

14 (1) GAO STUDY.—The Comptroller General of 

15 the United States, in consultation with the Adminis16 trator of the Small Business Administration, shall 

17 conduct an annual study on the individuals and enti18 ties receiving assistance under the Cannabis Restora19 tive Opportunity and Equitable Licensing Programs. 

20 This study shall include the types of assistance by 

21 state, and a description of the efforts by the Small 

22 Business Administration to increase access to capital 

23 for cannabis-related small business concerns owned 

24 and controlled by socially and economically disadvan25 taged individuals, individuals adversely impacted by 


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1 the War on Drugs, as well as the racial, ethnic, eco2 nomic and gender composition of the eligible State or 

3 locality. 

4 (2) REPORT.—Not later than 1 year after the 

5 date of enactment of this Act, the Comptroller General 

6 of the United States shall submit a report on the re7 sults of the study conducted under paragraph (1) to— 

8 (A) the Committee on Small Business of the 

9 House of Representatives; 

10 (B) the Committee on Small Business and 

11 Entrepreneurship of the Senate; 

12 (C) the Committee on the Judiciary of the 

13 House of Representatives; and 

14 (D) the Committee on the Judiciary of the 

15 Senate. 

16 SEC. 7. AVAILABILITY OF SMALL BUSINESS ADMINISTRA17 TION PROGRAMS AND SERVICES TO CAN18 NABIS-RELATED LEGITIMATE BUSINESSES 

19 AND SERVICE PROVIDERS. 

20 (a) DEFINITIONS RELATING TO CANNABIS-RELATED

21 LEGITIMATE BUSINESSES AND SERVICE PROVIDERS.—Sec22 tion 3 of the Small Business Act (15 U.S.C. 632) is amend23 ed by adding at the end the following new subsection: 

24 ‘‘(gg) CANNABIS-RELATED LEGITIMATE BUSINESSES

25 AND SERVICE PROVIDERS.—In this Act: 


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1 ‘‘(1) CANNABIS.—The term ‘cannabis’— 

2 ‘‘(A) means— 

3 ‘‘(i) all parts of the plant Cannabis 

4 sativa L., whether growing or not; 

5 ‘‘(ii) the seeds thereof; 

6 ‘‘(iii) the resin extracted from any part 

7 of such plant; and 

8 ‘‘(iv) every compound, manufacture, 

9 salt, derivative, mixture, or preparation of 

10 such plant, its seeds or resin; and 

11 ‘‘(B) does not include— 

12 ‘‘(i) hemp, as defined in section 297A 

13 of the Agricultural Marketing Act of 1946; 

14 ‘‘(ii) the mature stalks of such plant, 

15 fiber produced from such stalks, oil or cake 

16 made from the seeds of such plant, any 

17 other compound, manufacture, salt, deriva18 tive, mixture, or preparation of such ma19 ture stalks (except the resin extracted there20 from), fiber, oil, or cake, or the sterilized 

21 seed of such plant which is incapable of ger22 mination; or 

23 ‘‘(iii) any drug product approved 

24 under section 505 of the Federal Food, 

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1 uct licensed under section 351 of the Public 

2 Health Service Act. 

3 ‘‘(2) CANNABIS-RELATED LEGITIMATE BUSI4 NESS.—The term ‘cannabis-related legitimate busi5 ness’ means a manufacturer, producer, or any person 

6 or company that is a small business concern and 

7 that— 

8 ‘‘(A) engages in any activity described in 

9 subparagraph (B) pursuant to a law established 

10 by a State or a political subdivision of a State, 

11 as determined by such State or political subdivi12 sion; and 

13 ‘‘(B) participates in any business or orga14 nized activity that involves handling cannabis or 

15 cannabis products, including cultivating, pro16 ducing, manufacturing, selling, transporting, 

17 displaying, dispensing, distributing, or pur18 chasing cannabis or cannabis products. 

19 ‘‘(3) SERVICE PROVIDER.—The term ‘service pro20 vider’— 

21 ‘‘(A) means a business, organization, or 

22 other person that— 

23 ‘‘(i) sells goods or services to a can24 nabis-related legitimate business; or 


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1 ‘‘(ii) provides any business services, in2 cluding the sale or lease of real or any other 

3 property, legal or other licensed services, or 

4 any other ancillary service, relating to can5 nabis; and 

6 ‘‘(B) does not include a business, organiza7 tion, or other person that participates in any 

8 business or organized activity that involves han9 dling cannabis or cannabis products, including 

10 cultivating, producing, manufacturing, selling, 

11 transporting, displaying, dispensing, distrib12 uting, or purchasing cannabis or cannabis prod13 ucts.’’. 

14 (b) SMALL BUSINESS DEVELOPMENT CENTERS.—Sec15 tion 21(c) of the Small Business Act (15 U.S.C. 648(c)) is 

16 amended by adding at the end the following new paragraph: 

17 ‘‘(9) SERVICES FOR CANNABIS-RELATED LEGITI18 MATE BUSINESSES AND SERVICE PROVIDERS.—A 

19 small business development center may not decline to 

20 provide services to an otherwise eligible small business 

21 concern under this section solely because such concern 

22 is a cannabis-related legitimate business or service 

23 provider.’’. 


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1 (c) WOMEN’S BUSINESS CENTERS.—Section 29 of the 

2 Small Business Act (15 U.S.C. 656) is amended by adding 

3 at the end the following new subsection: 

4 ‘‘(p) SERVICES FOR CANNABIS-RELATED LEGITIMATE

5 BUSINESSES AND SERVICE PROVIDERS.—A women’s busi6 ness center may not decline to provide services to an other7 wise eligible small business concern under this section solely 

8 because such concern is a cannabis-related legitimate busi9 ness or service provider.’’. 

10 (d) SCORE.—Section 8(b)(1)(B) of the Small Business 

11 Act (15 U.S.C. 637(b)(1)(B)) is amended by adding at the 

12 end the following new sentence: ‘‘The head of the SCORE 

13 program established under this subparagraph may not de14 cline to provide services to an otherwise eligible small busi15 ness concern solely because such concern is a cannabis-re16 lated legitimate business or service provider.’’. 

17 (e) VETERAN BUSINESS OUTREACH CENTERS.—Sec18 tion 32 of the Small Business Act (15 U.S.C. 657b) is 

19 amended by adding at the end the following new subsection: 

20 ‘‘(h) SERVICES FOR CANNABIS-RELATED LEGITIMATE

21 BUSINESSES AND SERVICE PROVIDERS.—A Veteran Busi22 ness Outreach Center may not decline to provide services 

23 to an otherwise eligible small business concern under this 

24 section solely because such concern is a cannabis-related le25 gitimate business or service provider.’’. 


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1 (f) SECTION 7(a) LOANS.—Section 7(a) of the Small 

2 Business Act (15 U.S.C. 636(a)) is amended by adding at 

3 the end the following new paragraph: 

4 ‘‘(38) LOANS TO CANNABIS-RELATED LEGITIMATE

5 BUSINESSES AND SERVICE PROVIDERS.—The Admin6 istrator may not decline to provide a guarantee for 

7 a loan under this subsection, and a lender may not 

8 decline to make a loan under this subsection, to an 

9 otherwise eligible small business concern solely be10 cause such concern is a cannabis-related legitimate 

11 business or service provider.’’. 

12 (g) DISASTER LOANS.—Section 7(b) of the Small 

13 Business Act (15 U.S.C. 636(b)) is amended by inserting 

14 after paragraph (15) the following new paragraph: 

15 ‘‘(16) ASSISTANCE TO CANNABIS-RELATED LE16 GITIMATE BUSINESSES AND SERVICE PROVIDERS.— 

17 The Administrator may not decline to provide assist18 ance under this subsection to an otherwise eligible 

19 small business concern solely because such concern is 

20 a cannabis-related legitimate business or service pro21 vider.’’. 

22 (h) MICROLOANS.—Section 7(m) of the Small Business 

23 Act (15 U.S.C. 636(m)) is amended by adding at the end 

24 the following new paragraph: 


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1 ‘‘(14) ASSISTANCE TO CANNABIS-RELATED LE2 GITIMATE BUSINESSES AND SERVICE PROVIDERS.— 

3 The Administrator may not decline to make a loan 

4 or a grant under this subsection, and an eligible 

5 intermediary may not decline to provide assistance 

6 under this subsection to an otherwise eligible bor7 rower, eligible intermediary, or eligible nonprofit en8 tity (as applicable) solely because such borrower, 

9 intermediary, or nonprofit entity is a cannabis-re10 lated legitimate business or service provider.’’. 

11 (i) SMALL BUSINESS INVESTMENT COMPANY DEBEN12 TURES TO FINANCE CANNABIS-RELATED LEGITIMATE

13 BUSINESSES AND SERVICE PROVIDERS.—Part A of title III 

14 of the Small Business Investment Act of 1958 (15 U.S.C. 

15 681 et seq.) is amended by adding at the end the following 

16 new section: 

17 ‘‘SEC. 321. DEBENTURES TO FINANCE CANNABIS-RELATED 

18 LEGITIMATE BUSINESSES AND SERVICE PRO19 VIDERS. 

20 ‘‘(a) GUARANTEES.—The Administrator may not de21 cline to purchase or guarantee a debenture made under this 

22 title to an otherwise eligible small business investment com23 pany solely because such small business investment com24 pany provides financing to an entity that is a cannabisVerDate Sep 11 2014 19:31 Mar 24, 2022 Jkt 029200 PO 00000 Frm 00077 Fmt 6652 Sfmt 6203 E:\BILLS\H3617.RH H3617

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1 related legitimate business or service provider (as defined 

2 in section 7(a)(38) of the Small Business Act). 

3 ‘‘(b) OTHER ASSISTANCE.—A small business invest4 ment company may not decline to provide assistance under 

5 this title to an otherwise eligible small business concern sole6 ly because such small business concern is a cannabis-related 

7 legitimate business or service provider (as defined in section 

8 7(a)(38) of the Small Business Act).’’. 

9 (j) STATE OR LOCAL DEVELOPMENT COMPANY

10 LOANS.—Title V of the Small Business Investment Act of 

11 1958 (15 U.S.C. 695 et seq.) is amended by adding at the 

12 end the following new section: 

13 ‘‘SEC. 511. LOANS TO FINANCE CANNABIS-RELATED LEGITI14 MATE BUSINESSES AND SERVICE PROVIDERS. 

15 ‘‘(a) LOANS AND LOAN GUARANTEES.—The Adminis16 trator may not decline to make or provide a guarantee for 

17 a loan under this title to an otherwise eligible qualified 

18 State or local development company solely because such 

19 qualified State or local development company provides fi20 nancing to an entity that is a cannabis-related legitimate 

21 business or service provider (as defined in section 7(a)(38) 

22 of the Small Business Act). 

23 ‘‘(b) OTHER ASSISTANCE.—A qualified State or local 

24 development company may not decline to provide assistance 

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1 cern solely because such small business concern is a can2 nabis-related legitimate business or service provider (as de3 fined in section 7(a)(38) of the Small Business Act).’’. 

4 SEC. 8. NO DISCRIMINATION IN THE PROVISION OF A FED5 ERAL PUBLIC BENEFIT ON THE BASIS OF 

6 CANNABIS. 

7 (a) IN GENERAL.—No person may be denied any Fed8 eral public benefit (as such term is defined in section 401(c) 

9 of the Personal Responsibility and Work Opportunity Rec10 onciliation Act of 1996 (8 U.S.C. 1611(c))) on the basis 

11 of any use or possession of cannabis, or on the basis of a 

12 conviction or adjudication of juvenile delinquency for a 

13 cannabis offense, by that person. 

14 (b) SECURITY CLEARANCES.—Federal agencies may 

15 not use past or present cannabis or marijuana use as cri16 teria for granting, denying, or rescinding a security clear17 ance. 

18 SEC. 9. NO ADVERSE EFFECT FOR PURPOSES OF THE IMMI19 GRATION LAWS. 

20 (a) IN GENERAL.—For purposes of the immigration 

21 laws (as such term is defined in section 101 of the Immigra22 tion and Nationality Act), cannabis may not be considered 

23 a controlled substance, and an alien may not be denied any 

24 benefit or protection under the immigration laws based on 

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1 diction or abuse, an arrest, a juvenile adjudication, or a 

2 conviction, relating to cannabis, regardless of whether the 

3 event occurred before, on, or after the effective date of this 

4 Act. 

5 (b) CANNABIS DEFINED.—The term ‘‘cannabis’’— 

6 (1) means all parts of the plant Cannabis sativa 

7 L., whether growing or not; the seeds thereof; the resin 

8 extracted from any part of such plant; and every 

9 compound, manufacture, salt, derivative, mixture, or 

10 preparation of such plant, its seeds or resin; and 

11 (2) does not include— 

12 (A) hemp, as defined in section 297A of the 

13 Agricultural Marketing Act of 1946; 

14 (B) the mature stalks of such plant, fiber 

15 produced from such stalks, oil or cake made from 

16 the seeds of such plant, any other compound, 

17 manufacture, salt, derivative, mixture, or prepa18 ration of such mature stalks (except the resin ex19 tracted therefrom), fiber, oil, or cake, or the steri20 lized seed of such plant which is incapable of 

21 germination; or 

22 (C) any drug product approved under sec23 tion 505 of the Federal Food, Drug, and Cos24 metic Act, or biological product licensed under 

25 section 351 of the Public Health Service Act. 


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1 (c) CONFORMING AMENDMENTS TO IMMIGRATION AND

2 NATIONALITY ACT.—The Immigration and Nationality Act 

3 (8 U.S.C. 1101 et seq.) is amended— 

4 (1) in section 212(h), by striking ‘‘and subpara5 graph (A)(i)(II) of such subsection insofar as it re6 lates to a single offense of simple possession of 30 

7 grams or less of marijuana’’; 

8 (2) in section 237(a)(2)(B)(i), by striking ‘‘other 

9 than a single offense involving possession for one’s 

10 own use of 30 grams or less of marijuana’’; 

11 (3) in section 101(f)(3), by striking ‘‘(except as 

12 such paragraph relates to a single offense of simple 

13 possession of 30 grams or less of marihuana)’’; 

14 (4) in section 244(c)(2)(A)(iii)(II) by striking 

15 ‘‘except for so much of such paragraph as relates to 

16 a single offense of simple possession of 30 grams or 

17 less of marijuana’’; 

18 (5) in section 245(h)(2)(B) by striking ‘‘(except 

19 for so much of such paragraph as related to a single 

20 offense of simple possession of 30 grams or less of 

21 marijuana)’’; 

22 (6) in section 210(c)(2)(B)(ii)(III) by striking ‘‘, 

23 except for so much of such paragraph as relates to a 

24 single offense of simple possession of 30 grams or less 

25 of marihuana’’; and 


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1 (7) in section 245A(d)(2)(B)(ii)(II) by striking 

2 ‘‘, except for so much of such paragraph as relates to 

3 a single offense of simple possession of 30 grams or 

4 less of marihuana’’. 

5 SEC. 10. RESENTENCING AND EXPUNGEMENT. 

6 (a) EXPUNGEMENT OF NON-VIOLENT FEDERAL CAN7 NABIS OFFENSE CONVICTIONS FOR INDIVIDUALS NOT

8 UNDER A CRIMINAL JUSTICE SENTENCE.— 

9 (1) IN GENERAL.—Not later than 1 year after 

10 the date of the enactment of this Act, each Federal 

11 district shall conduct a comprehensive review and 

12 issue an order expunging each conviction or adjudica13 tion of juvenile delinquency for a non-violent Federal 

14 cannabis offense entered by each Federal court in the 

15 district before the date of enactment of this Act and 

16 on or after May 1, 1971. Each Federal court shall 

17 also issue an order expunging any arrests associated 

18 with each expunged conviction or adjudication of ju19 venile delinquency. 

20 (2) NOTIFICATION.—To the extent practicable, 

21 each Federal district shall notify each individual 

22 whose arrest, conviction, or adjudication of delin23 quency has been expunged pursuant to this subsection 

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1 nile delinquency has been expunged, and the effect of 

2 such expungement. 

3 (3) RIGHT TO PETITION COURT FOR

4 EXPUNGEMENT.—At any point after the date of enact5 ment of this Act, any individual with a prior convic6 tion or adjudication of juvenile delinquency for a 

7 non-violent Federal cannabis offense, who is not 

8 under a criminal justice sentence, may file a motion 

9 for expungement. If the expungement of such a convic10 tion or adjudication of juvenile delinquency is re11 quired pursuant to this Act, the court shall expunge 

12 the conviction or adjudication, and any associated ar13 rests. If the individual is indigent, counsel shall be 

14 appointed to represent the individual in any pro15 ceedings under this subsection. 

16 (4) SEALED RECORD.—The court shall seal all 

17 records related to a conviction or adjudication of ju18 venile delinquency that has been expunged under this 

19 subsection. Such records may only be made available 

20 by further order of the court. 

21 (b) SENTENCING REVIEW FOR INDIVIDUALS UNDER A

22 CRIMINAL JUSTICE SENTENCE.— 

23 (1) IN GENERAL.—For any individual who is 

24 under a criminal justice sentence for a non-violent 

25 Federal cannabis offense, the court that imposed the 


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1 sentence shall, on motion of the individual, the Direc2 tor of the Bureau of Prisons, the attorney for the Gov3 ernment, or the court, conduct a sentencing review 

4 hearing. If the individual is indigent, counsel shall be 

5 appointed to represent the individual in any sen6 tencing review proceedings under this subsection. 

7 (2) POTENTIAL REDUCED RESENTENCING.—After 

8 a sentencing hearing under paragraph (1), a court 

9 shall— 

10 (A) expunge each conviction or adjudication 

11 of juvenile delinquency for a non-violent Federal 

12 cannabis offense entered by the court before the 

13 date of enactment of this Act, and any associated 

14 arrest; 

15 (B) vacate the existing sentence or disposi16 tion of juvenile delinquency and, if applicable, 

17 impose any remaining sentence or disposition of 

18 juvenile delinquency on the individual as if this 

19 Act, and the amendments made by this Act, were 

20 in effect at the time the offense was committed; 

21 and 

22 (C) order that all records related to a con23 viction or adjudication of juvenile delinquency 

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1 cated under this Act be sealed and only be made 

2 available by further order of the court. 

3 (c) EFFECT OF EXPUNGEMENT.—An individual who 

4 has had an arrest, a conviction, or juvenile delinquency ad5 judication expunged under this section— 

6 (1) may treat the arrest, conviction, or adjudica7 tion as if it never occurred; and 

8 (2) shall be immune from any civil or criminal 

9 penalties related to perjury, false swearing, or false 

10 statements, for a failure to disclose such arrest, con11 viction, or adjudication. 

12 (d) EXCEPTION.—An individual who at sentencing re13 ceived an aggravating role adjustment pursuant to United 

14 States Sentencing Guideline 3B1.1(a) in relation to a Fed15 eral cannabis offense conviction shall not be eligible for 

16 expungement of that Federal cannabis offense conviction 

17 under this section. 

18 (e) DEFINITIONS.—In this section: 

19 (1) The term ‘‘Federal cannabis offense’’ means 

20 an offense that is no longer punishable pursuant to 

21 this Act or the amendments made under this Act. 

22 (2) The term ‘‘expunge’’ means, with respect to 

23 an arrest, a conviction, or a juvenile delinquency ad24 judication, the removal of the record of such arrest, 


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1 conviction, or adjudication from each official index or 

2 public record. 

3 (3) The term ‘‘under a criminal justice sentence’’ 

4 means, with respect to an individual, that the indi5 vidual is serving a term of probation, parole, super6 vised release, imprisonment, official detention, pre-re7 lease custody, or work release, pursuant to a sentence 

8 or disposition of juvenile delinquency imposed on or 

9 after the effective date of the Controlled Substances 

10 Act (May 1, 1971). 

11 (f) STUDY.—The Comptroller General of the United 

12 States, in consultation with the Secretary of Health and 

13 Human Services, shall conduct a demographic study of in14 dividuals convicted of a Federal cannabis offense. Such 

15 study shall include information about the age, race, eth16 nicity, sex, and gender identity of those individuals, the 

17 type of community such users dwell in, and such other de18 mographic information as the Comptroller General deter19 mines should be included. 

20 (g) REPORT.—Not later than 2 years after the date 

21 of the enactment of this Act, the Comptroller General of the 

22 United States shall report to Congress the results of the 

23 study conducted under subsection (f). 


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

2 MARIHUANA. 

3 Wherever, in the statutes of the United States or in 

4 the rulings, regulations, or interpretations of various ad5 ministrative bureaus and agencies of the United States— 

6 (1) there appears or may appear the term ‘‘mar7 ihuana’’ or ‘‘marijuana’’, that term shall be struck 

8 and the term ‘‘cannabis’’ shall be inserted; and 

9 (2) there appears or may appear the term ‘‘Mar10 ihuana’’ or ‘‘Marijuana’’, that term shall be struck 

11 and the term ‘‘Cannabis’’ shall be inserted. 

12 SEC. 12. SEVERABILITY. 

13 If any provision of this Act or an amendment made 

14 by this Act, or any application of such provision to any 

15 person or circumstance, is held to be unconstitutional, the 

16 remainder of this Act, the amendments made by this Act, 

17 and the application of this Act and the amendments made 

18 by this Act to any other person or circumstance shall not 

19 be affected. 

20 SEC. 13. CANNABIS OFFENSE DEFINED. 

21 For purposes of this Act, the term ‘‘cannabis offense’’ 

22 means a criminal offense related to cannabis— 

23 (1) that, under Federal law, is no longer punish24 able pursuant to this Act or the amendments made 

25 under this Act; or 


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1 (2) that, under State law, is no longer an offense 

2 or that was designated a lesser offense or for which 

3 the penalty was reduced under State law pursuant to 

4 or following the adoption of a State law authorizing 

5 the sale or use of cannabis. 

6 SEC. 14. RULEMAKING. 

7 Unless otherwise provided in this Act, not later than 

8 1 year after the date of enactment of this Act, the Depart9 ment of the Treasury, the Department of Justice, and the 

10 Small Business Administration shall issue or amend any 

11 rules, standard operating procedures, and other legal or pol12 icy guidance necessary to carry out implementation of this 

13 Act. After the 1-year period, any publicly issued sub-regu14 latory guidance, including any compliance guides, manu15 als, advisories and notices, may not be issued without 60- 

16 day notice to appropriate congressional committees. Notice 

17 shall include a description and justification for additional 

18 guidance. 

19 SEC. 15. SOCIETAL IMPACT OF MARIJUANA LEGALIZATION 

20 STUDY. 

21 The Comptroller General of the United States shall, 

22 not later than 2 years after the date of enactment of this 

23 Act, provide to Congress a study that addresses the societal 

24 impact of the legalization of recreational cannabis by 

25 States, including— 


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1 (1) sick days reported to employers; 

2 (2) workers compensations claims; 

3 (3) tax revenue remitted to States resulting from 

4 legal marijuana sales; 

5 (4) changes in government spending related to 

6 enforcement actions and court proceedings; 

7 (5) Federal welfare assistance applications; 

8 (6) rate of arrests related to methamphetamine 

9 possession; 

10 (7) hospitalization rates related to methamphet11 amine and narcotics use; 

12 (8) uses of marijuana and its byproducts for 

13 medical purposes; 

14 (9) uses of marijuana and its byproducts for 

15 purposes relating to the health, including the mental 

16 health, of veterans; 

17 (10) arrest rates of individuals driving under the 

18 influence or driving while intoxicated by marijuana; 

19 (11) traffic-related deaths and injuries where the 

20 driver is impaired by marijuana; 

21 (12) arrest of minors for marijuana-related 

22 charges; 

23 (13) violent crime rates; 

24 (14) school suspensions, expulsions, and law en25 forcement referrals that are marijuana-related; 


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1 (15) high school dropout rates; 

2 (16) changes in district-wide and State-wide 

3 standardized test scores; 

4 (17) marijuana-related hospital admissions and 

5 poison control calls; 

6 (18) marijuana-related juvenile admittances into 

7 substance rehabilitation facilities and mental health 

8 clinics; 

9 (19) diversion of marijuana into neighboring 

10 States and drug seizures in neighboring States; 

11 (20) marijuana plants grown on public lands in 

12 contravention to Federal and State laws; and 

13 (21) court filings under a State’s organized 

14 crime statutes. 


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pamtmann on DSKBC07HB2PROD with BILLS
Union Calendar No. 203 

117TH CONGRESS 

2D SESSION H. R. 3617 

[Report No. 117–276, Part I] 

A BILL 

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

MARCH 24, 2022 

Reported from the Committee on the Judiciary with an 

amendment 

MARCH 24, 2022 

Committees on Energy and Commerce, Agriculture, EduUnion and ordered to be printed the Committee of the Whole House on the State of the portation and Infrastructure discharged; committed to Natural Resources, Oversight and Reform, and Trans- cation and Labor, Ways and Means, Small Business, 


pamtmann on DSKBC07HB2PROD with BILLS