(B) by striking the period at the end and 
inserting ‘‘; and 
‘‘(B) any substance not covered under sub-
paragraph (A) that was a substance under such 
section as of December 1, 2018, and specified by 
the Secretary of Transportation.’’. 
(5) FRA PROVISIONS.—Section 20140(a) of title 
49, United States Code, is amended— 
(A) by striking ‘‘means any substance’’ and 
inserting the following: ‘‘means— 
‘‘(A) any substance’’; and 
(B) by striking the period at the end and 
inserting ‘‘; and 
‘‘(B) any substance not covered under sub-
paragraph (A) that was a substance under such 
section as of December 1, 2018, and specified by 
the Secretary of Transportation.’’. 
(6) FTA PROVISIONS.—Section 5331(a)(1) of 
title 49, United States Code, is amended— 
(A) by striking ‘‘means any substance’’ and 
inserting the following: ‘‘means— 
‘‘(A) any substance’’; and 
(B) by striking the period at the end and 
inserting ‘‘; and 
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‘‘(B) any substance not covered under sub-
paragraph (A) that was a substance under such 
section as of December 1, 2018, and whose use 
the Secretary of Transportation decides has a 
risk to transportation safety.’’. 
(d) RETROACTIVITY.—The amendments made by this 
section to the Controlled Substances Act (21 U.S.C. 801 et 
seq.) are retroactive and shall apply to any offense com-
mitted, case pending, conviction entered, and, in the case 
of a juvenile, any offense committed, case pending, or adju-
dication of juvenile delinquency entered before, on, or after 
the date of enactment of this Act. 
(e) EFFECT ON OTHER LAW.—Nothing in this subtitle 
shall affect or modify— 
(1) the Federal Food, Drug, and Cosmetic Act 
(21 U.S.C. 301 et seq.); 
(2) section 351 of the Public Health Service Act 
(42 U.S.C. 262); or 
(3) the authority of the Commissioner of Food 
and Drugs and the Secretary of Health and Human 
Services— 
(A) under— 
(i) the Federal Food, Drug, and Cos-
metic Act (21 U.S. 301 et seq.); or 
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(ii) section 351 of the Public Health 
Service Act (42 U.S.C. 262); or 
(B) to promulgate Federal regulations and 
guidelines that relate to products containing 
cannabis or cannabis-derived compounds under 
the Act described in subparagraph (A)(i) or the 
section described in subparagraph (A)(ii). 
(f) PUBLIC MEETINGS.—Not later than one year after 
the date of enactment of this Act, the Secretary of Health 
and Human Services, acting through the Commissioner of 
Food and Drugs, shall hold not less than one public meeting 
to address the regulation, safety, manufacturing, product 
quality, marketing, labeling, and sale of products con-
taining cannabis or cannabis-derived compounds. 
(g) SPECIAL RULE FOR FEDERAL EMPLOYEE TEST-
ING.—Section 503 of the Supplemental Appropriations Act, 
1987 (5 U.S.C. 7301 note) is amended by adding at the 
end the following: 
‘‘(h) MARIJUANA.— 
‘‘(1) CONTINUED TESTING.—Notwithstanding the 
Marijuana 
Opportunity 
Reinvestment 
and 
Expungement Act and the amendments made thereby, 
the Secretary of Health and Human Services may 
continue to include marijuana for purposes of drug 
testing of Federal employees subject to this section, 
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Executive Order 12564, or other applicable Federal 
laws and orders. 
‘‘(2) DEFINITION.—The term ‘marijuana’ has the 
meaning given to the term ‘marihuana’ in section 102 
of the Controlled Substances Act (21 6 U.S.C. 802) on 
the day before the date of enactment of the Marijuana 
Opportunity Reinvestment and Expungement Act.’’. 
(h) SPECIAL RULE FOR CERTAIN REGULATIONS.— 
(1) IN
GENERAL.—The amendments made by 
this section may not be construed to abridge the au-
thority of the Secretary of Transportation, or the Sec-
retary of the department in which the Coast Guard 
is operating, to regulate and screen for the use of a 
controlled substance. 
(2) CONTROLLED SUBSTANCE DEFINED.—In this 
subsection, the term ‘‘controlled substance’’ means— 
(A) any substance covered under section 102 
of the Controlled Substances Act (21 U.S.C. 802) 
on the day before the date of enactment of this 
Act; and 
(B) any substance not covered under sub-
paragraph (A) that was a substance covered 
under section 102 of the Controlled Substances 
Act (21 U.S.C. 802) on December 1, 2018, and 
specified by the Secretary of Transportation. 
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SEC. 4. DEMOGRAPHIC DATA OF CANNABIS BUSINESS OWN-
ERS AND EMPLOYEES. 
(a) IN GENERAL.—The Bureau of Labor Statistics 
shall regularly compile, maintain, and make public data 
on the demographics of— 
(1) individuals who are business owners in the 
cannabis industry; and 
(2) individuals who are employed in the can-
nabis industry. 
(b) DEMOGRAPHIC DATA.—The data collected under 
subsection (a) shall include data regarding— 
(1) age; 
(2) certifications and licenses; 
(3) disability status; 
(4) educational attainment; 
(5) family and marital status; 
(6) nativity; 
(7) race and Hispanic ethnicity; 
(8) school enrollment; 
(9) veteran status; and 
(10) sex. 
(c) CONFIDENTIALITY.—The name, address, and other 
identifying information of individuals employed in the can-
nabis industry shall be kept confidential by the Bureau and 
not be made available to the public. 
(d) DEFINITIONS.—In this section: 
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(1) CANNABIS.—The term ‘‘cannabis’’ means ei-
ther marijuana or cannabis as defined under the 
State law authorizing the sale or use of cannabis in 
which the individual or entity is located. 
(2) CANNABIS INDUSTRY.—The term ‘‘cannabis 
industry’’ means an individual or entity that is li-
censed or permitted under a State or local law to en-
gage in commercial cannabis-related activity. 
(3) OWNER.—The term ‘‘owner’’ means an indi-
vidual or entity that is defined as an owner under the 
State or local law where the individual or business is 
licensed or permitted. 
SEC. 5. CREATION OF OPPORTUNITY TRUST FUND AND IM-
POSITION OF TAXES WITH RESPECT TO CAN-
NABIS PRODUCTS. 
(a) ESTABLISHMENT OF TRUST FUND.—Subchapter A 
of chapter 98 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new section: 
‘‘SEC. 9512. ESTABLISHMENT OF OPPORTUNITY TRUST 
FUND. 
‘‘(a) CREATION OF TRUST FUND.—There is established 
in the Treasury of the United States a trust fund to be 
known as the ‘Opportunity Trust Fund’ (referred to in this 
section as the ‘Trust Fund’), consisting of such amounts as 
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may be appropriated or credited to such fund as provided 
in this section or section 9602(b). 
‘‘(b) TRANSFERS TO TRUST FUND.—There are hereby 
appropriated to the Trust Fund amounts equivalent to the 
net revenues received in the Treasury from the taxes im-
posed under chapter 56. 
‘‘(c) EXPENDITURES.—Amounts in the Trust Fund 
shall be available, without further appropriation, only as 
follows: 
‘‘(1) 50 percent to the Attorney General to carry 
out section 3052(a) of part OO of the Omnibus Crime 
Control and Safe Streets Act of 1968. 
‘‘(2) 10 percent to the Attorney General to carry 
out section 3052(b) of part OO of the Omnibus Crime 
Control and Safe Streets Act of 1968. 
‘‘(3) 20 percent to the Administrator of the 
Small Business Administration to carry out section 
6(b)(1) of the Marijuana Opportunity Reinvestment 
and Expungement Act. 
‘‘(4) 20 percent to the Administrator of the 
Small Business Administration to carry out section 
6(b)(2) of the Marijuana Opportunity Reinvestment 
and Expungement Act.’’. 
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(b) CANNABIS REVENUE AND REGULATION ACT.—Sub-
title E of the Internal Revenue Code of 1986 is amended 
by adding at the end the following new chapter: 
‘‘CHAPTER 56—CANNABIS PRODUCTS 
‘‘SUBCHAPTER A. TAX ON CANNABIS PRODUCTS 
‘‘SUBCHAPTER B. OCCUPATIONAL TAX 
‘‘SUBCHAPTER C. BOND AND PERMITS 
‘‘SUBCHAPTER D. OPERATIONS 
‘‘SUBCHAPTER E. PENALTIES 
‘‘Subchapter A—Tax on Cannabis Products 
‘‘Sec. 5901. Imposition of tax. 
‘‘Sec. 5902. Definitions. 
‘‘Sec. 5903. Liability and method of payment. 
‘‘Sec. 5904. Exemption from tax; transfers in bond. 
‘‘Sec. 5905. Credit, refund, or drawback of tax. 
‘‘SEC. 5901. IMPOSITION OF TAX. 
‘‘(a) IMPOSITION OF TAX.—There is hereby imposed on 
any cannabis product produced in or imported into the 
United States a tax equal to— 
‘‘(1) for any such product removed during the 
first 5 calendar years ending after the date on which 
this chapter becomes effective, the applicable percent-
age of such product’s removal price, and 
‘‘(2) for any product removed during any cal-
endar year after the calendar years described in para-
graph (1), the applicable equivalent amount. 
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‘‘(b) APPLICABLE PERCENTAGE.—For purposes of sub-
section (a)(1), the applicable percentage shall be determined 
as follows: 
‘‘(1) For any cannabis product removed during 
the first 2 calendar years ending after the date on 
which this chapter becomes effective, 5 percent. 
‘‘(2) For any cannabis product removed during 
the calendar year after the last calendar year to 
which paragraph (1) applies, 6 percent. 
‘‘(3) For any cannabis product removed during 
the calendar year after the calendar year to which 
paragraph (2) applies, 7 percent. 
‘‘(4) For any cannabis product removed during 
the calendar year after the calendar year to which 
paragraph (3) applies, 8 percent. 
‘‘(c) APPLICABLE EQUIVALENT AMOUNT.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(a)(2), the term ‘applicable equivalent amount’ 
means, with respect to any cannabis product removed 
during any calendar year, an amount equal to— 
‘‘(A) in the case of any cannabis product 
not described in subparagraph (B), the product 
of the applicable rate per ounce multiplied by the 
number of ounces of such product (and a propor-
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tionate tax at the like rate on all fractional parts 
of an ounce of such product), and 
‘‘(B) in the case of any THC-measurable 
cannabis product, the product of the applicable 
rate per gram multiplied by the number of 
grams of tetrahydrocannabinol in such product 
(and a proportionate tax at the like rate on all 
fractional 
parts 
of 
a 
gram 
of 
tetrahydrocannabinol in such product). 
‘‘(2) APPLICABLE RATES.— 
‘‘(A) IN GENERAL.—For purposes of para-
graph (1)(A), the term ‘applicable rate per 
ounce’ means, with respect to any cannabis 
product removed during any calendar year, 8 
percent of the prevailing sales price of cannabis 
flowers sold in the United States during the 12- 
month period ending one calendar quarter before 
such calendar year, expressed on a per ounce 
basis, as determined by the Secretary. 
‘‘(B) THC-MEASURABLE
CANNABIS
PROD-
UCTS.—For purposes of paragraph (1)(B), the 
term ‘applicable rate per gram’ means, with re-
spect to any cannabis product removed during 
any calendar year, 8 percent of the prevailing 
sales price of tetrahydrocannabinol sold in the 
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United States during the 12-month period end-
ing one calendar quarter before such calendar 
year, expressed on a per gram basis, as deter-
mined by the Secretary. 
‘‘(d) TIME
OF ATTACHMENT
ON CANNABIS PROD-
UCTS.—The tax under this section shall attach to any can-
nabis product as soon as such product is in existence as 
such, whether it be subsequently separated or transferred 
into any other substance, either in the process of original 
production or by any subsequent process. 
‘‘SEC. 5902. DEFINITIONS. 
‘‘(a) DEFINITIONS RELATED
TO CANNABIS PROD-
UCTS.—For purposes of this chapter— 
‘‘(1) CANNABIS PRODUCT.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), the term ‘cannabis product’ 
means any article which contains (or consists of) 
cannabis. 
‘‘(B) EXCEPTIONS.—The term ‘cannabis 
product’ shall not include an FDA-approved ar-
ticle or industrial hemp. 
‘‘(C) FDA-APPROVED ARTICLE.—The term 
‘FDA-approved article’ means any article if the 
producer or importer thereof demonstrates to the 
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centration of not more than 0.3 percent on a dry 
weight basis. 
‘‘(2) THC-MEASURABLE CANNABIS PRODUCT.— 
The term ‘THC-measurable cannabis product’ means 
any cannabis product— 
‘‘(A) with respect to which the Secretary has 
made a determination that the amount of 
tetrahydrocannabinol in such product can be 
measured with a high degree of accuracy, or 
‘‘(B) which is not cannabis flower and the 
concentration of tetrahydrocannabinol in which 
is significantly higher than the average such con-
centration in cannabis flower. 
‘‘(3) CANNABIS.—The term ‘cannabis’ has the 
meaning given such term under section 102(16) of the 
Controlled Substances Act (21 U.S.C. 802(16)). 
‘‘(b) DEFINITIONS RELATED TO CANNABIS ENTER-
PRISES.—For purposes of this chapter— 
‘‘(1) CANNABIS
ENTERPRISE.—The term ‘can-
nabis enterprise’ means a producer, importer, or ex-
port warehouse proprietor. 
‘‘(2) PRODUCER.— 
‘‘(A) IN
GENERAL.—The term ‘producer’ 
means any person who plants, cultivates, har-
vests, grows, manufactures, produces, compounds, 
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converts, processes, prepares, or packages any 
cannabis product. 
‘‘(B) PERSONAL USE EXCEPTION.—Subject 
to regulation prescribed by the Secretary, the 
term ‘producer’ shall not include any individual 
otherwise described in subparagraph (A) if the 
only cannabis product described in such sub-
paragraph with respect to such individual is for 
personal or family use and not for sale. 
‘‘(3) IMPORTER.—The term ‘importer’ means 
any person who— 
‘‘(A) is in the United States and to whom 
non-tax-paid cannabis products, produced in a 
foreign country or a possession of the United 
States, are shipped or consigned, 
‘‘(B) removes cannabis products for sale or 
consumption in the United States from a cus-
toms bonded warehouse, or 
‘‘(C) smuggles or otherwise unlawfully 
brings any cannabis product into the United 
States. 
‘‘(4) EXPORT WAREHOUSE PROPRIETOR.— 
‘‘(A) IN GENERAL.—The term ‘export ware-
house proprietor’ means any person who operates 
an export warehouse. 
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‘‘(B) EXPORT WAREHOUSE.—The term ‘ex-
port warehouse’ means a bonded internal revenue 
warehouse for the storage of cannabis products, 
upon which the internal revenue tax has not been 
paid— 
‘‘(i) for subsequent shipment to a for-
eign country or a possession of the United 
States, or 
‘‘(ii) for consumption beyond the juris-
diction of the internal revenue laws of the 
United States. 
‘‘(5) CANNABIS
PRODUCTION
FACILITY.—The 
term ‘cannabis production facility’ means an estab-
lishment which is qualified under subchapter C to 
perform any operation for which such qualification is 
required under such subchapter. 
‘‘(c) OTHER DEFINITIONS.—For purposes of this chap-
ter— 
‘‘(1) PRODUCE.—The term ‘produce’ includes 
any activity described in subsection (b)(2)(A). 
‘‘(2) REMOVAL; REMOVE.—The terms ‘removal’ 
or ‘remove’ means— 
‘‘(A) the transfer of cannabis products from 
the premises of a producer (or the transfer of 
such products from the bonded premises of a pro-
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ducer to a non-bonded premises of such pro-
ducer), 
‘‘(B) release of such products from customs 
custody, or 
‘‘(C) smuggling or other unlawful importa-
tion of such products into the United States. 
‘‘(3) REMOVAL PRICE.—The term ‘removal price’ 
means— 
‘‘(A) except as otherwise provided in this 
paragraph, the price for which the cannabis 
product is sold in the sale which occurs in con-
nection with the removal of such product, 
‘‘(B) in the case of any such sale which is 
described in section 5903(c), the price deter-
mined under such section, and 
‘‘(C) if there is no sale which occurs in con-
nection with such removal, the price which 
would be determined under section 5903(c) if 
such product were sold at a price which cannot 
be determined. 
‘‘SEC. 5903. LIABILITY AND METHOD OF PAYMENT. 
‘‘(a) LIABILITY FOR TAX.— 
‘‘(1) ORIGINAL LIABILITY.—The producer or im-
porter of any cannabis product shall be liable for the 
taxes imposed thereon by section 5901. 
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‘‘(2) TRANSFER OF LIABILITY.— 
‘‘(A) IN GENERAL.—When cannabis prod-
ucts are transferred, without payment of tax, 
pursuant to subsection (b) or (c) of section 
5904— 
‘‘(i) except as provided in clause (ii), 
the transferee shall become liable for the tax 
upon receipt by the transferee of such arti-
cles, and the transferor shall thereupon be 
relieved of their liability for such tax, and 
‘‘(ii) in the case of cannabis products 
which are released in bond from customs 
custody for transfer to the bonded premises 
of a producer, the transferee shall become 
liable for the tax on such articles upon re-
lease from customs custody, and the im-
porter shall thereupon be relieved of their li-
ability for such tax. 
‘‘(B) RETURNED TO BOND.—All provisions 
of this chapter applicable to cannabis products 
in bond shall be applicable to such articles re-
turned to bond upon withdrawal from the mar-
ket or returned to bond after previous removal 
for a tax-exempt purpose. 
‘‘(b) METHOD OF PAYMENT OF TAX.— 
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‘‘(1) IN GENERAL.— 
‘‘(A) TAXES PAID ON BASIS OF RETURN.— 
The taxes imposed by section 5901 shall be paid 
on the basis of return. The Secretary shall, by 
regulations, prescribe the period or the event to 
be covered by such return and the information to 
be furnished on such return. 
‘‘(B) APPLICATION
TO
TRANSFEREES.—In 
the case of any transfer to which subsection 
(a)(2)(A) applies, the tax under section 5901 on 
the transferee shall (if not otherwise relieved by 
reason of a subsequent transfer to which such 
subsection applies) be imposed with respect to the 
removal of the cannabis product from the bonded 
premises of the transferee. 
‘‘(C) POSTPONEMENT.—Any postponement 
under this subsection of the payment of taxes de-
termined at the time of removal shall be condi-
tioned upon the filing of such additional bonds, 
and upon compliance with such requirements, as 
the Secretary may prescribe for the protection of 
the revenue. The Secretary may, by regulations, 
require payment of tax on the basis of a return 
prior to removal of the cannabis products where 
a person defaults in the postponed payment of 
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tax on the basis of a return under this subsection 
or regulations prescribed thereunder. 
‘‘(D) ADMINISTRATION
AND
PENALTIES.— 
All administrative and penalty provisions of this 
title, insofar as applicable, shall apply to any 
tax imposed by section 5901. 
‘‘(2) TIME FOR PAYMENT OF TAXES.— 
‘‘(A) IN
GENERAL.—Except as otherwise 
provided in this paragraph, in the case of taxes 
on cannabis products removed during any semi-
monthly period under bond for deferred payment 
of tax, the last day for payment of such taxes 
shall be the 14th day after the last day of such 
semimonthly period. 
‘‘(B) IMPORTED ARTICLES.—In the case of 
cannabis products which are imported into the 
United States, the following provisions shall 
apply: 
‘‘(i) IN GENERAL.—The last day for 
payment of tax shall be the 14th day after 
the last day of the semimonthly period dur-
ing which the article is entered into the cus-
toms territory of the United States. 
‘‘(ii) SPECIAL
RULE
FOR
ENTRY
OF 
WAREHOUSING.—Except as provided in 
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clause (iv), in the case of an entry for 
warehousing, the last day for payment of 
tax shall not be later than the 14th day 
after the last day of the semimonthly period 
during which the article is removed from 
the first such warehouse. 
‘‘(iii) FOREIGN
TRADE
ZONES.—Ex-
cept as provided in clause (iv) and in regu-
lations prescribed by the Secretary, articles 
brought into a foreign trade zone shall, not-
withstanding any other provision of law, be 
treated for purposes of this subsection as if 
such zone were a single customs warehouse. 
‘‘(iv) EXCEPTION FOR ARTICLES DES-
TINED FOR EXPORT.—Clauses (ii) and (iii) 
shall not apply to any article which is 
shown to the satisfaction of the Secretary to 
be destined for export. 
‘‘(C) CANNABIS PRODUCTS BROUGHT INTO 
THE UNITED STATES FROM PUERTO RICO.—In 
the case of cannabis products which are brought 
into the United States from Puerto Rico and 
subject to tax under section 7652, the last day 
for payment of tax shall be the 14th day after the 
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last day of the semimonthly period during which 
the article is brought into the United States. 
‘‘(D) SPECIAL
RULE
WHERE
DUE
DATE 
FALLS ON SATURDAY, SUNDAY, OR HOLIDAY.— 
Notwithstanding section 7503, if, but for this 
subparagraph, the due date under this para-
graph would fall on a Saturday, Sunday, or a 
legal holiday (as defined in section 7503), such 
due date shall be the immediately preceding day 
which is not a Saturday, Sunday, or such a hol-
iday. 
‘‘(E) SPECIAL RULE FOR UNLAWFULLY PRO-
DUCED CANNABIS PRODUCTS.—In the case of any 
cannabis products produced in the United States 
at any place other than the premises of a pro-
ducer that has filed the bond and obtained the 
permit required under this chapter, tax shall be 
due and payable immediately upon production. 
‘‘(3) PAYMENT
BY
ELECTRONIC
FUND
TRANS-
FER.—Any person who in any 12-month period, end-
ing December 31, was liable for a gross amount equal 
to or exceeding $5,000,000 in taxes imposed on can-
nabis products by section 5901 (or section 7652) shall 
pay such taxes during the succeeding calendar year 
by electronic fund transfer (as defined in section 
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5061(e)(2)) to a Federal Reserve Bank. Rules similar 
to the rules of section 5061(e)(3) shall apply to the 
$5,000,000 amount specified in the preceding sen-
tence. 
‘‘(c) DETERMINATION OF PRICE.— 
‘‘(1) CONSTRUCTIVE SALE PRICE.— 
‘‘(A) IN GENERAL.—If an article is sold di-
rectly to consumers, sold on consignment, or sold 
(otherwise than through an arm’s length trans-
action) at less than the fair market price, or if 
the price for which the article sold cannot be de-
termined, the tax under section 5901(a) shall be 
computed on the price for which such articles are 
sold, in the ordinary course of trade, by pro-
ducers thereof, as determined by the Secretary. 
‘‘(B) ARM’S LENGTH.— 
‘‘(i) IN
GENERAL.—For purposes of 
this section, a sale is considered to be made 
under circumstances otherwise than at 
arm’s length if— 
‘‘(I) the parties are members of 
the same controlled group, whether or 
not such control is actually exercised to 
influence the sale price, 
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‘‘(II) the parties are members of a 
family, as defined in section 267(c)(4), 
or 
‘‘(III) the sale is made pursuant 
to special arrangements between a pro-
ducer and a purchaser. 
‘‘(ii) CONTROLLED GROUPS.— 
‘‘(I) IN GENERAL.—The term ‘con-
trolled group’ has the meaning given to 
such term by subsection (a) of section 
1563, except that ‘more than 50 per-
cent’ shall be substituted for ‘at least 
80 percent’ each place it appears in 
such subsection. 
‘‘(II) 
CONTROLLED
GROUPS 
WHICH
INCLUDE
NONINCORPORATED 
PERSONS.—Under 
regulations 
pre-
scribed by the Secretary, principles 
similar to the principles of subclause 
(I) shall apply to a group of persons 
under common control where one or 
more of such persons is not a corpora-
tion. 
‘‘(2) CONTAINERS, 
PACKING
AND
TRANSPOR-
TATION CHARGES.—In determining, for the purposes 
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of this chapter, the price for which an article is sold, 
there shall be included any charge for coverings and 
containers of whatever nature, and any charge inci-
dent to placing the article in condition packed ready 
for shipment, but there shall be excluded the amount 
of tax imposed by this chapter, whether or not stated 
as a separate charge. A transportation, delivery, in-
surance, installation, or other charge (not required by 
the preceding sentence to be included) shall be ex-
cluded from the price only if the amount thereof is es-
tablished to the satisfaction of the Secretary in ac-
cordance with regulations. 
‘‘(3) DETERMINATION OF APPLICABLE EQUIVA-
LENT AMOUNTS.—Paragraphs (1) and (2) shall apply 
for purposes of section 5901(c) only to the extent that 
the Secretary determines appropriate. 
‘‘(d) PARTIAL PAYMENTS
AND INSTALLMENT AC-
COUNTS.— 
‘‘(1) PARTIAL PAYMENTS.—In the case of— 
‘‘(A) a contract for the sale of an article 
wherein it is provided that the price shall be 
paid by installments and title to the article sold 
does not pass until a future date notwith-
standing partial payment by installments, 
‘‘(B) a conditional sale, or 
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‘‘(C) a chattel mortgage arrangement where-
in it is provided that the sales price shall be 
paid in installments, 
there shall be paid upon each payment with respect 
to the article a percentage of such payment equal to 
the rate of tax in effect on the date such payment is 
due. 
‘‘(2) SALES OF INSTALLMENT ACCOUNTS.—If in-
stallment accounts, with respect to payments on 
which tax is being computed as provided in para-
graph (1), are sold or otherwise disposed of, then 
paragraph (1) shall not apply with respect to any 
subsequent payments on such accounts (other than 
subsequent payments on returned accounts with re-
spect to which credit or refund is allowable by reason 
of section 6416(b)(5)), but instead— 
‘‘(A) there shall be paid an amount equal to 
the difference between— 
‘‘(i) the tax previously paid on the 
payments on such installment accounts, and 
‘‘(ii) the total tax which would be pay-
able if such installment accounts had not 
been sold or otherwise disposed of (computed 
as provided in paragraph (1)), except that 
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‘‘(B) if any such sale is pursuant to the 
order of, or subject to the approval of, a court of 
competent jurisdiction in a bankruptcy or insol-
vency proceeding, the amount computed under 
subparagraph (A) shall not exceed the sum of the 
amounts computed by multiplying— 
‘‘(i) the proportionate share of the 
amount for which such accounts are sold 
which is allocable to each unpaid install-
ment payment, by 
‘‘(ii) the rate of tax under this chapter 
in effect on the date such unpaid install-
ment payment is or was due. 
The sum of the amounts payable under this sub-
section in respect of the sale of any article shall 
not exceed the total tax. 
‘‘SEC. 5904. EXEMPTION FROM TAX; TRANSFERS IN BOND. 
‘‘(a) EXEMPTION FROM TAX.—Cannabis products on 
which the internal revenue tax has not been paid or deter-
mined may, subject to such regulations as the Secretary 
shall prescribe, be withdrawn from the bonded premises of 
any producer in approved containers free of tax and not 
for resale for use— 
‘‘(1) exclusively in scientific research by a lab-
oratory, 
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‘‘(2) by a proprietor of a cannabis production 
facility in research, development, or testing (other 
than consumer testing or other market analysis) of 
processes, systems, materials, or equipment, relating 
to cannabis or cannabis operations, under such limi-
tations and conditions as to quantities, use, and ac-
countability as the Secretary may by regulations re-
quire for the protection of the revenue, or 
‘‘(3) by the United States or any governmental 
agency thereof, any State, any political subdivision of 
a State, or the District of Columbia, for nonconsump-
tion purposes. 
‘‘(b) CANNABIS PRODUCTS TRANSFERRED
OR RE-
MOVED IN BOND FROM DOMESTIC FACTORIES AND EXPORT 
WAREHOUSES.— 
‘‘(1) IN GENERAL.—Subject to such regulations 
and under such bonds as the Secretary shall prescribe, 
a producer or export warehouse proprietor may trans-
fer cannabis products, without payment of tax, to the 
bonded premises of another producer or export ware-
house proprietor, or remove such articles, without 
payment of tax, for shipment to a foreign country or 
a possession of the United States, or for consumption 
beyond the jurisdiction of the internal revenue laws of 
the United States. 
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‘‘(2) LABELING.—Cannabis products may not be 
transferred or removed under this subsection unless 
such products bear such marks, labels, or notices as 
the Secretary shall by regulations prescribe. 
‘‘(c) CANNABIS PRODUCTS RELEASED IN BOND FROM 
CUSTOMS
CUSTODY.—Cannabis products imported or 
brought into the United States may be released from cus-
toms custody, without payment of tax, for delivery to a pro-
ducer or export warehouse proprietor if such articles are 
not put up in packages, in accordance with such regulations 
and under such bond as the Secretary shall prescribe. 
‘‘(d) CANNABIS
PRODUCTS
EXPORTED
AND
RE-
TURNED.—Cannabis products classifiable under item 
9801.00.10 of the Harmonized Tariff Schedule of the United 
States (relating to duty on certain articles previously ex-
ported and returned), as in effect on the date of the enact-
ment of the Marijuana Opportunity Reinvestment and 
Expungement Act, may be released from customs custody, 
without payment of that part of the duty attributable to 
the internal revenue tax for delivery to the original pro-
ducer of such cannabis products or to the export warehouse 
proprietor authorized by such producer to receive such prod-
ucts, in accordance with such regulations and under such 
bond as the Secretary shall prescribe. Upon such release 
such products shall be subject to this chapter as if they had 
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not been exported or otherwise removed from internal rev-
enue bond. 
‘‘SEC. 5905. CREDIT, REFUND, OR DRAWBACK OF TAX. 
‘‘(a) CREDIT OR REFUND.— 
‘‘(1) IN GENERAL.—Credit or refund of any tax 
imposed by this chapter or section 7652 shall be al-
lowed or made (without interest) to the cannabis en-
terprise on proof satisfactory to the Secretary that the 
claimant cannabis enterprise has paid the tax on— 
‘‘(A) cannabis products withdrawn from the 
market by the claimant, or 
‘‘(B) such products lost (otherwise than by 
theft) or destroyed, by fire, casualty, or act of 
God, while in the possession or ownership of the 
claimant. 
‘‘(2) CANNABIS PRODUCTS LOST OR DESTROYED 
IN BOND.— 
‘‘(A) EXTENT
OF
LOSS
ALLOWANCE.—No 
tax shall be collected in respect of cannabis prod-
ucts lost or destroyed while in bond, except that 
such tax shall be collected— 
‘‘(i) in the case of loss by theft, unless 
the Secretary finds that the theft occurred 
without connivance, collusion, fraud, or 
negligence on the part of the proprietor of 
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the cannabis production facility, owner, 
consignor, consignee, bailee, or carrier, or 
their employees or agents, 
‘‘(ii) in the case of voluntary destruc-
tion, unless such destruction is carried out 
as provided in paragraph (3), and 
‘‘(iii) in the case of an unexplained 
shortage of cannabis products. 
‘‘(B) PROOF
OF
LOSS.—In any case in 
which cannabis products are lost or destroyed, 
whether by theft or otherwise, the Secretary may 
require the proprietor of a cannabis production 
facility or other person liable for the tax to file 
a claim for relief from the tax and submit proof 
as to the cause of such loss. In every case where 
it appears that the loss was by theft, the burden 
shall be upon the proprietor of the cannabis pro-
duction facility or other person responsible for 
the tax under section 5901 to establish to the sat-
isfaction of the Secretary that such loss did not 
occur as the result of connivance, collusion, 
fraud, or negligence on the part of the proprietor 
of the cannabis production facility, owner, con-
signor, consignee, bailee, or carrier, or their em-
ployees or agents. 
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‘‘(C) REFUND OF TAX.—In any case where 
the tax would not be collectible by virtue of sub-
paragraph (A), but such tax has been paid, the 
Secretary shall refund such tax. 
‘‘(D) LIMITATIONS.—Except as provided in 
subparagraph (E), no tax shall be abated, remit-
ted, credited, or refunded under this paragraph 
where the loss occurred after the tax was deter-
mined. The abatement, remission, credit, or re-
fund of taxes provided for by subparagraphs (A) 
and (C) in the case of loss of cannabis products 
by theft shall only be allowed to the extent that 
the claimant is not indemnified against or rec-
ompensed in respect of the tax for such loss. 
‘‘(E) APPLICABILITY.—The provisions of 
this paragraph shall extend to and apply in re-
spect of cannabis products lost after the tax was 
determined and before completion of the physical 
removal of the cannabis products from the bond-
ed premises. 
‘‘(3) VOLUNTARY DESTRUCTION.—The proprietor 
of a cannabis production facility or other persons lia-
ble for the tax imposed by this chapter or by section 
7652 with respect to any cannabis product in bond 
may voluntarily destroy such products, but only if 
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such destruction is under such supervision and under 
such regulations as the Secretary may prescribe. 
‘‘(4) LIMITATION.—Any claim for credit or re-
fund of tax under this subsection shall be filed within 
6 months after the date of the withdrawal from the 
market, loss, or destruction of the products to which 
the claim relates, and shall be in such form and con-
tain such information as the Secretary shall by regu-
lations prescribe. 
‘‘(b) DRAWBACK OF TAX.—There shall be an allowance 
of drawback of tax paid on cannabis products, when 
shipped from the United States, in accordance with such 
regulations and upon the filing of such bond as the Sec-
retary shall prescribe. 
‘‘Subchapter B—Occupational Tax 
‘‘Sec. 5911. Imposition and rate of tax. 
‘‘Sec. 5912. Payment of tax. 
‘‘Sec. 5913. Provisions relating to liability for occupational taxes. 
‘‘Sec. 5914. Application to State laws. 
‘‘SEC. 5911. IMPOSITION AND RATE OF TAX. 
‘‘(a) IN GENERAL.—Any person engaged in business 
as a producer or an export warehouse proprietor shall pay 
a tax of $1,000 per year (referred to in this subchapter as 
an ‘occupational tax’) in respect of each premises at which 
such business is carried on. 
‘‘(b) PENALTY FOR FAILURE TO REGISTER.—Any per-
son engaged in business as a producer or an export ware-
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house proprietor who willfully fails to pay the occupation 
tax shall be fined not more than $5,000, or imprisoned not 
more than 2 years, or both, for each such offense. 
‘‘SEC. 5912. PAYMENT OF TAX. 
‘‘(a) CONDITION PRECEDENT TO CARRYING ON BUSI-
NESS.—No person shall be engaged in or carry on any trade 
or business subject to the occupational tax until such person 
has paid such tax. 
‘‘(b) COMPUTATION.— 
‘‘(1) IN GENERAL.—The occupational tax shall 
be imposed— 
‘‘(A) as of on the first day of July in each 
year, or 
‘‘(B) on commencing any trade or business 
on which such tax is imposed. 
‘‘(2) PERIOD.—In the case of a tax imposed 
under subparagraph (A) of paragraph (1), the occu-
pational tax shall be reckoned for 1 year, and in the 
case of subparagraph (B) of such paragraph, it shall 
be reckoned proportionately, from the first day of the 
month in which the liability to such tax commenced, 
to and including the 30th day of June following. 
‘‘(c) METHOD OF PAYMENT.— 
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‘‘(1) PAYMENT BY RETURN.—The occupational 
tax shall be paid on the basis of a return under such 
regulations as the Secretary shall prescribe. 
‘‘(2) STAMP DENOTING PAYMENT OF TAX.—After 
receiving a properly executed return and remittance 
of any occupational tax, the Secretary shall issue to 
the taxpayer an appropriate stamp as a receipt de-
noting payment of the tax. This paragraph shall not 
apply in the case of a return covering liability for a 
past period. 
‘‘SEC. 5913. PROVISIONS RELATING TO LIABILITY FOR OC-
CUPATIONAL TAXES. 
‘‘(a) PARTNERS.—Any number of persons doing busi-
ness in partnership at any one place shall be required to 
pay a single occupational tax. 
‘‘(b) DIFFERENT BUSINESSES OF SAME OWNERSHIP 
AND LOCATION.—Whenever more than one of the pursuits 
or occupations described in this subchapter are carried on 
in the same place by the same person at the same time, 
except as otherwise provided in this subchapter, the occupa-
tional tax shall be paid for each according to the rates sever-
ally prescribed. 
‘‘(c) BUSINESSES IN MORE THAN ONE LOCATION.— 
‘‘(1) LIABILITY FOR TAX.—The payment of the 
occupational tax shall not exempt from an additional 
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occupational tax the person carrying on a trade or 
business in any other place than that stated in the 
records of the Internal Revenue Service. 
‘‘(2) STORAGE.—Nothing contained in para-
graph (1) shall require imposition of an occupational 
tax for the storage of cannabis products at a location 
other than the place where such products are sold or 
offered for sale. 
‘‘(3) PLACE.— 
‘‘(A) IN
GENERAL.—For purposes of this 
section, the term ‘place’ means the entire office, 
plant or area of the business in any one location 
under the same proprietorship. 
‘‘(B) DIVISIONS.—For purposes of this 
paragraph, any passageways, streets, highways, 
rail crossings, waterways, or partitions dividing 
the premises shall not be deemed sufficient sepa-
ration to require an additional occupational tax, 
if the various divisions are otherwise contiguous. 
‘‘(d) DEATH OR CHANGE OF LOCATION.— 
‘‘(1) IN GENERAL.—In addition to the person 
who has paid the occupational tax for the carrying on 
of any business at any place, any person described in 
paragraph (2) may secure the right to carry on, with-
out incurring any additional occupational tax, the 
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same business at the same place for the remainder of 
the taxable period for which the occupational tax was 
paid. 
‘‘(2) ELIGIBLE PERSONS.—The persons described 
in this paragraph are the following: 
‘‘(A) The surviving spouse or child, or ex-
ecutor or administrator or other legal representa-
tive, of a deceased taxpayer. 
‘‘(B) A husband or wife succeeding to the 
business of his or her living spouse. 
‘‘(C) A receiver or trustee in bankruptcy, or 
an assignee for benefit of creditors. 
‘‘(D) The partner or partners remaining 
after death or withdrawal of a member of a part-
nership. 
‘‘(3) CHANGE OF LOCATION.—When any person 
moves to any place other than the place for which oc-
cupational tax was paid for the carrying on of any 
business, such person may secure the right to carry 
on, without incurring additional occupational tax, 
the same business at the new location for the remain-
der of the taxable period for which the occupational 
tax was paid. To secure the right to carry on the 
business without incurring additional occupational 
tax, the successor, or the person relocating their busi-
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ness, must register the succession or relocation with 
the Secretary in accordance with regulations pre-
scribed by the Secretary. 
‘‘(e) FEDERAL AGENCIES OR INSTRUMENTALITIES.— 
Any tax imposed by this subchapter shall apply to any 
agency or instrumentality of the United States unless such 
agency or instrumentality is granted by statute a specific 
exemption from such tax. 
‘‘SEC. 5914. APPLICATION TO STATE LAWS. 
‘‘The payment of any tax imposed by this subchapter 
for carrying on any trade or business shall not be held to— 
‘‘(1) exempt any person from any penalty or 
punishment provided by the laws of any State for 
carrying on such trade or business within such State, 
or in any manner to authorize the commencement or 
continuance of such trade or business contrary to the 
laws of such State or in places prohibited by munic-
ipal law, or 
‘‘(2) prohibit any State from placing a duty or 
tax on the same trade or business, for State or other 
purposes. 
‘‘Subchapter C—Bond and Permits 
‘‘Sec. 5921. Establishment and bond. 
‘‘Sec. 5922. Application for permit. 
‘‘Sec. 5923. Permit. 
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‘‘SEC. 5921. ESTABLISHMENT AND BOND. 
‘‘(a) PROHIBITION
ON PRODUCTION OUTSIDE
OF 
BONDED CANNABIS PRODUCTION FACILITY.— 
‘‘(1) IN GENERAL.—Except as authorized by the 
Secretary or on the bonded premises of a cannabis 
production facility duly authorized to produce can-
nabis products according to law, no cannabis product 
may planted, cultivated, harvested, grown, manufac-
tured, produced, compounded, converted, processed, 
prepared, or packaged in any building or on any 
premises. 
‘‘(2) AUTHORIZED PRODUCERS ONLY.—No per-
son other than a producer which has filed the bond 
required under subsection (b) and received a permit 
described in section 5923 may produce any cannabis 
product. 
‘‘(3) PERSONAL
USE
EXCEPTION.—This sub-
section shall not apply with respect the activities of 
an individual who is not treated as a producer by 
reason of section 5902(b)(2)(B). 
‘‘(b) BOND.— 
‘‘(1) WHEN
REQUIRED.—Every person, before 
commencing business as a producer or an export 
warehouse proprietor, shall file such bond, conditioned 
upon compliance with this chapter and regulations 
issued thereunder, in such form, amount, and manner 
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as the Secretary shall by regulation prescribe. A new 
or additional bond may be required whenever the Sec-
retary considers such action necessary for the protec-
tion of the revenue. 
‘‘(2) APPROVAL
OR
DISAPPROVAL.—No person 
shall engage in such business until he receives notice 
of approval of such bond. A bond may be disapproved, 
upon notice to the principal on the bond, if the Sec-
retary determines that the bond is not adequate to 
protect the revenue. 
‘‘(3) CANCELLATION.—Any bond filed hereunder 
may be canceled, upon notice to the principal on the 
bond, whenever the Secretary determines that the 
bond no longer adequately protects the revenue. 
‘‘SEC. 5922. APPLICATION FOR PERMIT. 
‘‘(a) IN GENERAL.—Every person, before commencing 
business as a cannabis enterprise, and at such other time 
as the Secretary shall by regulation prescribe, shall make 
application for the permit provided for in section 5923. The 
application shall be in such form as the Secretary shall pre-
scribe and shall set forth, truthfully and accurately, the in-
formation called for on the form. Such application may be 
rejected and the permit denied if the Secretary, after notice 
and opportunity for hearing, finds that— 
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‘‘(1) the premises on which it is proposed to con-
duct the cannabis enterprise are not adequate to pro-
tect the revenue, or 
‘‘(2) such person (including, in the case of a cor-
poration, any officer, director, or principal stock-
holder and, in the case of a partnership, a partner) 
has failed to disclose any material information re-
quired or made any material false statement in the 
application therefor. 
‘‘SEC. 5923. PERMIT. 
‘‘(a) ISSUANCE.—A person shall not engage in business 
as a cannabis enterprise without a permit to engage in such 
business. Such permit, conditioned upon compliance with 
this chapter and regulations issued thereunder, shall be 
issued in such form and in such manner as the Secretary 
shall by regulation prescribe. A new permit may be required 
at such other time as the Secretary shall by regulation pre-
scribe. 
‘‘(b) SUSPENSION OR REVOCATION.— 
‘‘(1) SHOW CAUSE HEARING.—If the Secretary 
has reason to believe that any person holding a per-
mit— 
‘‘(A) has not in good faith complied with 
this chapter, or with any other provision of this 
title involving intent to defraud, 
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‘‘(d) INSPECTION OR DISCLOSURE OF INFORMATION.— 
For rules relating to inspection and disclosure of returns 
and return information, see section 6103(o). 
‘‘Subchapter D—Operations 
‘‘Sec. 5931. Inventories, reports, and records. 
‘‘Sec. 5932. Packaging and labeling. 
‘‘Sec. 5933. Purchase, receipt, possession, or sale of cannabis products after re-
moval. 
‘‘Sec. 5934. Restrictions relating to marks, labels, notices, and packages. 
‘‘Sec. 5935. Restriction on importation of previously exported cannabis products. 
‘‘SEC. 5931. INVENTORIES, REPORTS, AND RECORDS. 
‘‘Every cannabis enterprise shall— 
‘‘(1) make a true and accurate inventory at the 
time of commencing business, at the time of con-
cluding business, and at such other times, in such 
manner and form, and to include such items, as the 
Secretary shall by regulation prescribe, with such in-
ventories to be subject to verification by any internal 
revenue officer, 
‘‘(2) make reports containing such information, 
in such form, at such times, and for such periods as 
the Secretary shall by regulation prescribe, and 
‘‘(3) keep such records in such manner as the 
Secretary shall by regulation prescribe, with such 
records to be available for inspection by any internal 
revenue officer during business hours. 
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‘‘SEC. 5932. PACKAGING AND LABELING. 
‘‘(a) PACKAGES.—All cannabis products shall, before 
removal, be put up in such packages as the Secretary shall 
by regulation prescribe. 
‘‘(b) MARKS, LABELS, AND NOTICES.—Every package 
of cannabis products shall, before removal, bear the marks, 
labels, and notices if any, that the Secretary by regulation 
prescribes. 
‘‘(c) LOTTERY FEATURES.—No certificate, coupon, or 
other device purporting to be or to represent a ticket, 
chance, share, or an interest in, or dependent on, the event 
of a lottery shall be contained in, attached to, or stamped, 
marked, written, or printed on any package of cannabis 
products. 
‘‘(d) INDECENT
OR IMMORAL MATERIAL PROHIB-
ITED.—No indecent or immoral picture, print, or represen-
tation shall be contained in, attached to, or stamped, 
marked, written, or printed on any package of cannabis 
products. 
‘‘(e) EXCEPTIONS.—Subject to regulations prescribed 
by the Secretary, cannabis products may be exempted from 
subsections (a) and (b) if such products are— 
‘‘(1) for experimental purposes, or 
‘‘(2) transferred to the bonded premises of an-
other producer or export warehouse proprietor or re-
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leased in bond from customs custody for delivery to 
a producer. 
‘‘SEC. 5933. PURCHASE, RECEIPT, POSSESSION, OR SALE OF 
CANNABIS PRODUCTS AFTER REMOVAL. 
‘‘(a) RESTRICTION.—No person shall— 
‘‘(1) with intent to defraud the United States, 
purchase, receive, possess, offer for sale, or sell or oth-
erwise dispose of, after removal, any cannabis prod-
ucts— 
‘‘(A) upon which the tax has not been paid 
or determined in the manner and at the time 
prescribed by this chapter or regulations there-
under, or 
‘‘(B) which, after removal without payment 
of tax pursuant to section 5904(a), have been di-
verted from the applicable purpose or use speci-
fied in that section, 
‘‘(2) with intent to defraud the United States, 
purchase, receive, possess, offer for sale, or sell or oth-
erwise dispose of, after removal, any cannabis prod-
ucts which are not put up in packages as required 
under section 5932 or which are put up in packages 
not bearing the marks, labels, and notices, as required 
under such section, or 
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‘‘(3) otherwise than with intent to defraud the 
United States, purchase, receive, possess, offer for sale, 
or sell or otherwise dispose of, after removal, any can-
nabis products which are not put up in packages as 
required under section 5932 or which are put up in 
packages not bearing the marks, labels, and notices, 
as required under such section. 
‘‘(b) EXCEPTION.—Paragraph (3) of subsection (a) 
shall not prevent the sale or delivery of cannabis products 
directly to consumers from proper packages, nor apply to 
such articles when so sold or delivered. 
‘‘(c) LIABILITY TO TAX.—Any person who possesses 
cannabis products in violation of paragraph (1) or (2) of 
subsection (a) shall be liable for a tax equal to the tax on 
such articles. 
‘‘SEC. 5934. RESTRICTIONS RELATING TO MARKS, LABELS, 
NOTICES, AND PACKAGES. 
‘‘No person shall, with intent to defraud the United 
States, destroy, obliterate, or detach any mark, label, or no-
tice prescribed or authorized, by this chapter or regulations 
thereunder, to appear on, or be affixed to, any package of 
cannabis products before such package is emptied. 
‘‘SEC. 5935. RESTRICTION ON IMPORTATION OF PRE-
VIOUSLY EXPORTED CANNABIS PRODUCTS. 
‘‘(a) EXPORT LABELED CANNABIS PRODUCTS.— 
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‘‘(1) IN GENERAL.—Cannabis products produced 
in the United States and labeled for exportation 
under this chapter— 
‘‘(A) may be transferred to or removed from 
the premises of a producer or an export ware-
house proprietor only if such articles are being 
transferred or removed without tax in accord-
ance with section 5904, 
‘‘(B) may be imported or brought into the 
United States, after their exportation, only if 
such articles either are eligible to be released 
from customs custody with the partial duty ex-
emption provided in section 5904(d) or are re-
turned to the original producer of such article as 
provided in section 5904(c), and 
‘‘(C) may not be sold or held for sale for do-
mestic consumption in the United States unless 
such articles are removed from their export pack-
aging and repackaged by the original producer 
into new packaging that does not contain an ex-
port label. 
‘‘(2) ALTERATIONS
BY
PERSONS
OTHER
THAN 
ORIGINAL PRODUCER.—This section shall apply to ar-
ticles labeled for export even if the packaging or the 
appearance of such packaging to the consumer of such 
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articles has been modified or altered by a person other 
than the original producer so as to remove or conceal 
or attempt to remove or conceal (including by the 
placement of a sticker over) any export label. 
‘‘(3) EXPORTS INCLUDE SHIPMENTS TO PUERTO 
RICO.—For purposes of this section, section 5904(d), 
section 5941, and such other provisions as the Sec-
retary may specify by regulations, references to expor-
tation shall be treated as including a reference to 
shipment to the Commonwealth of Puerto Rico. 
‘‘(b) EXPORT LABEL.—For purposes of this section, an 
article is labeled for export or contains an export label if 
it bears the mark, label, or notice required under section 
5904(b). 
‘‘Subchapter E—Penalties 
‘‘Sec. 5941. Civil penalties. 
‘‘Sec. 5942. Criminal penalties. 
‘‘SEC. 5941. CIVIL PENALTIES. 
‘‘(a) OMITTING THINGS REQUIRED OR DOING THINGS 
FORBIDDEN.—Whoever willfully omits, neglects, or refuses 
to comply with any duty imposed upon them by this chap-
ter, or to do, or cause to be done, any of the things required 
by this chapter, or does anything prohibited by this chapter, 
shall in addition to any other penalty provided in this title, 
be liable to a penalty of $10,000, to be recovered, with costs 
of suit, in a civil action, except where a penalty under sub-
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section (b) or (c) or under section 6651 or 6653 or part 
II of subchapter A of chapter 68 may be collected from such 
person by assessment. 
‘‘(b) FAILURE TO PAY TAX.—Whoever fails to pay any 
tax imposed by this chapter at the time prescribed by law 
or regulations, shall, in addition to any other penalty pro-
vided in this title, be liable to a penalty of 10 percent of 
the tax due but unpaid. 
‘‘(c) SALE OF CANNABIS OR CANNABIS PRODUCTS FOR 
EXPORT.— 
‘‘(1) Every person who sells, relands, or receives 
within the jurisdiction of the United States any can-
nabis products which have been labeled or shipped for 
exportation under this chapter, 
‘‘(2) every person who sells or receives such re-
landed cannabis products, and 
‘‘(3) every person who aids or abets in such sell-
ing, relanding, or receiving, 
shall, in addition to the tax and any other penalty provided 
in this title, be liable for a penalty equal to the greater of 
$10,000 or 10 times the amount of the tax imposed by this 
chapter. All cannabis products relanded within the jurisdic-
tion of the United States shall be forfeited to the United 
States and destroyed. All vessels, vehicles, and aircraft used 
in such relanding or in removing such cannabis products 
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from the place where relanded, shall be forfeited to the 
United States. 
‘‘(d) APPLICABILITY OF SECTION 6665.—The penalties 
imposed by subsections (b) and (c) shall be assessed, col-
lected, and paid in the same manner as taxes, as provided 
in section 6665(a). 
‘‘(e) CROSS REFERENCES.—For penalty for failure to 
make deposits or for overstatement of deposits, see section 
6656. 
‘‘SEC. 5942. CRIMINAL PENALTIES. 
‘‘(a) FRAUDULENT OFFENSES.—Whoever, with intent 
to defraud the United States— 
‘‘(1) engages in business as a cannabis enterprise 
without filing the application and obtaining the per-
mit where required by this chapter or regulations 
thereunder, 
‘‘(2) fails to keep or make any record, return, re-
port, or inventory, or keeps or makes any false or 
fraudulent record, return, report, or inventory, re-
quired by this chapter or regulations thereunder, 
‘‘(3) refuses to pay any tax imposed by this 
chapter, or attempts in any manner to evade or de-
feat the tax or the payment thereof, 
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‘‘(4) sells or otherwise transfers, contrary to this 
chapter or regulations thereunder, any cannabis prod-
ucts subject to tax under this chapter, or 
‘‘(5) purchases, receives, or possesses, with intent 
to redistribute or resell, any cannabis product— 
‘‘(A) upon which the tax has not been paid 
or determined in the manner and at the time 
prescribed by this chapter or regulations there-
under, or 
‘‘(B) which, without payment of tax pursu-
ant to section 5904, have been diverted from the 
applicable purpose or use specified in that sec-
tion, 
shall, for each such offense, be fined not more than $10,000, 
or imprisoned not more than 5 years, or both. 
‘‘(b) LIABILITY TO TAX.—Any person who possesses 
cannabis products in violation of subsection (a) shall be lia-
ble for a tax equal to the tax on such articles.’’. 
(c) STUDY.—Not later than 2 years after the date of 
the enactment of this Act, and every 5 years thereafter, the 
Secretary of the Treasury, or the Secretary’s delegate, 
shall— 
(1) conduct a study concerning the characteris-
tics of the cannabis industry, including the number of 
persons operating cannabis enterprises at each level of 
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such industry, the volume of sales, the amount of tax 
collected each year, and the areas of evasion, and 
(2) submit to Congress recommendations to im-
prove the regulation of the industry and the adminis-
tration of the related tax. 
(d) ANNUAL REPORTS REGARDING DETERMINATION 
OF APPLICABLE RATES.—Not later than 6 months before 
the beginning of each calendar year to which section 
5901(a)(2) of the Internal Revenue Code of 1986 (as added 
by this section) applies, the Secretary of the Treasury, or 
the Secretary’s delegate, shall make publicly available a de-
tailed description of the methodology which the Secretary 
anticipates using to determine the applicable rate per ounce 
and the applicable rate per gram which will apply for such 
calendar year under section 5901(c)(2) of such Code. 
(e) CONFORMING AMENDMENTS.— 
(1) Section 6103(o)(1)(A) of the Internal Rev-
enue Code of 1986 is amended by striking ‘‘and fire-
arms’’ and inserting ‘‘firearms, and cannabis prod-
ucts’’. 
(2) The table of chapters for subtitle E of such 
Code is amended by adding at the end the following 
new item: 
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‘‘CHAPTER 56. CANNABIS PRODUCTS’’. 
(3) The table of sections for subchapter A of 
chapter 98 of such Code is amended by adding at the 
end the following new item: 
‘‘Sec. 9512. Establishment of Opportunity Trust Fund.’’. 
(f) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as otherwise provided 
in this subsection, the amendments made by this sec-
tion shall apply to removals, and applications for 
permits under section 5922 of the Internal Revenue 
Code of 1986 (as added by subsection (b)), after 180 
days after the date of the enactment of this Act. 
(2) ESTABLISHMENT
OF
TRUST
FUND.—The 
amendment made by subsection (a) shall take effect 
on the date of the enactment of this Act. 
SEC. 6. OPPORTUNITY TRUST FUND PROGRAMS. 
(a) CANNABIS JUSTICE OFFICE; COMMUNITY REIN-
VESTMENT GRANT PROGRAM.— 
(1) CANNABIS JUSTICE OFFICE.—Part A of title 
I of the Omnibus Crime Control and Safe Streets Act 
of 1968 (34 U.S.C. 10101 et seq.) is amended by in-
serting after section 109 the following: 
‘‘SEC. 110. CANNABIS JUSTICE OFFICE. 
‘‘(a) ESTABLISHMENT.—There is established within 
the Office of Justice Programs a Cannabis Justice Office. 
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‘‘(b) DIRECTOR.—The Cannabis Justice Office shall be 
headed by a Director who shall be appointed by the Assist-
ant Attorney General for the Office of Justice Programs. 
The Director shall report to the Assistant Attorney General 
for the Office of Justice Programs. The Director shall award 
grants and may enter into compacts, cooperative agree-
ments, and contracts on behalf of the Cannabis Justice Of-
fice. The Director may not engage in any employment other 
than that of serving as the Director, nor may the Director 
hold any office in, or act in any capacity for, any organiza-
tion, agency, or institution with which the Office makes any 
contract or other arrangement. 
‘‘(c) EMPLOYEES.— 
‘‘(1) IN GENERAL.—The Director shall employ as 
many full-time employees as are needed to carry out 
the duties and functions of the Cannabis Justice Of-
fice under subsection (d). Such employees shall be ex-
clusively assigned to the Cannabis Justice Office. 
‘‘(2) INITIAL HIRES.—Not later than 6 months 
after the date of enactment of this section, the Direc-
tor shall— 
‘‘(A) hire no less than one-third of the total 
number of employees of the Cannabis Justice Of-
fice; and 
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‘‘(B) no more than one-half of the employees 
assigned to the Cannabis Justice Office by term 
appointment that may after 2 years be converted 
to career appointment. 
‘‘(3) LEGAL COUNSEL.—At least one employee 
hired for the Cannabis Justice Office shall serve as 
legal counsel to the Director and shall provide counsel 
to the Cannabis Justice Office. 
‘‘(d) DUTIES AND FUNCTIONS.—The Cannabis Justice 
Office is authorized to— 
‘‘(1) administer the Community Reinvestment 
Grant Program; and 
‘‘(2) perform such other functions as the Assist-
ant Attorney General for the Office of Justice Pro-
grams may delegate, that are consistent with the stat-
utory obligations of this section.’’. 
(2) COMMUNITY
REINVESTMENT
GRANT
PRO-
GRAM.—Title I of the Omnibus Crime Control and 
Safe Streets Act of 1968 (34 U.S.C. et seq.) is amend-
ed by adding at the end the following: 
‘‘PART PP—COMMUNITY REINVESTMENT GRANT 
PROGRAM 
‘‘SEC. 3056. AUTHORIZATION. 
‘‘(a) IN GENERAL.—The Director of the Cannabis Jus-
tice Office shall establish and carry out a grant program, 
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known as the ‘Community Reinvestment Grant Program’, 
to provide eligible entities with funds to administer services 
for individuals adversely impacted by the War on Drugs, 
including— 
‘‘(1) job training; 
‘‘(2) reentry services; 
‘‘(3) legal aid for civil and criminal cases, in-
cluding expungement of cannabis convictions; 
‘‘(4) literacy programs; 
‘‘(5) youth recreation or mentoring programs; 
and 
‘‘(6) health education programs. 
‘‘(b) SUBSTANCE USE DISORDER SERVICES.—The Di-
rector, in consultation with the Secretary of Health and 
Human Services, shall provide eligible entities with funds 
to administer substance use disorder services for individuals 
adversely impacted by the War on Drugs or connect pa-
tients with substance use disorder services. Also eligible for 
such services are individuals who have been arrested for or 
convicted of the sale, possession, use, manufacture, or cul-
tivation of a controlled substance other than cannabis (ex-
cept for a conviction involving distribution to a minor). 
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‘‘SEC. 3057. FUNDING FROM OPPORTUNITY TRUST FUND. 
‘‘The Director shall carry out the program under this 
part using funds made available under section 9512(c)(1) 
and (2) of the Internal Revenue Code. 
‘‘SEC. 3058. DEFINITIONS. 
‘‘In this part: 
‘‘(1) The term ‘cannabis conviction’ means a 
conviction, or adjudication of juvenile delinquency, 
for a cannabis offense (as such term is defined in sec-
tion 13 of the Marijuana Opportunity Reinvestment 
and Expungement Act). 
‘‘(2) The term ‘eligible entity’ means a nonprofit 
organization, as defined in section 501(c)(3) of the 
Internal Revenue Code, that is representative of a 
community or a significant segment of a community 
with experience in providing relevant services to indi-
viduals adversely impacted by the War on Drugs in 
that community. 
‘‘(3) The term ‘individuals adversely impacted 
by the War on Drugs’ has the meaning given that 
term in section 6 of the Marijuana Opportunity Re-
investment and Expungement Act.’’. 
(b) CANNABIS RESTORATIVE OPPORTUNITY PROGRAM; 
EQUITABLE LICENSING GRANT PROGRAM.— 
(1) CANNABIS RESTORATIVE OPPORTUNITY PRO-
GRAM.—The Administrator of the Small Business Ad-
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ministration shall establish and carry out a program, 
to be known as the ‘‘Cannabis Restorative Oppor-
tunity Program’’, to provide loans and technical as-
sistance under section 7(m) of the Small Business Act 
(15 U.S.C. 636(m)) to assist small business concerns 
owned and controlled by socially and economically 
disadvantaged individuals that operate in eligible 
States or localities. 
(2) EQUITABLE LICENSING GRANT PROGRAM.— 
The Administrator of the Small Business Administra-
tion shall establish and carry out a grant program, 
to be known as the ‘‘Equitable Licensing Grant Pro-
gram’’, to provide any eligible State or locality funds 
to develop and implement equitable cannabis licens-
ing programs that minimize barriers to cannabis li-
censing and employment for individuals adversely 
impacted by the War on Drugs, provided that each 
grantee includes in its cannabis licensing program at 
least four of the following elements: 
(A) A waiver of cannabis license applica-
tion fees for individuals who report an income 
below 250 percent of the Federal Poverty Level 
for at least 5 of the past 10 years and who are 
first-time applicants for a cannabis license. 
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(B) A prohibition on the denial of a can-
nabis license based on a conviction for a can-
nabis offense that took place prior to State legal-
ization of cannabis or the date of enactment of 
this Act, as appropriate. 
(C) A prohibition on restrictions for licens-
ing relating to criminal convictions except with 
respect to a criminal conviction related to own-
ing and operating a business. 
(D) A prohibition on cannabis license hold-
ers engaging in suspicionless cannabis drug test-
ing of their prospective or current employees, ex-
cept with respect to drug testing for safety-sen-
sitive positions required under part 40 of title 
49, Code of Federal Regulations. 
(E) The establishment of a cannabis licens-
ing board that is reflective of the racial, ethnic, 
economic, and gender composition of the eligible 
State or locality, to serve as an oversight body 
of the equitable licensing program. 
(3) DEFINITIONS.—In this subsection: 
(A) ELIGIBLE
STATE
OR
LOCALITY.—The 
term ‘‘eligible State or locality’’ means a State 
or locality that has taken steps to— 
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(i) create an automatic process, at no 
cost to the individual, for the expungement, 
destruction, or sealing of criminal records 
for cannabis offenses; and 
(ii) eliminate violations or other pen-
alties for persons under parole, probation, 
pre-trial, or other State or local criminal 
supervision for a cannabis offense. 
(B) INDIVIDUAL ADVERSELY IMPACTED BY 
THE WAR ON DRUGS.—The term ‘‘individual ad-
versely impacted by the War on Drugs’’ means 
an individual— 
(i) who reports an income below 250 
percent of the Federal Poverty Level for at 
least 5 of the past 10 years; and 
(ii) who has been arrested for or con-
victed of the sale, possession, use, manufac-
ture, or cultivation of cannabis (except for 
a conviction involving distribution to a 
minor), or whose parent, sibling, spouse, or 
child has been arrested for or convicted of 
such an offense. 
(C) SMALL BUSINESS CONCERN OWNED AND 
CONTROLLED BY SOCIALLY AND ECONOMICALLY 
DISADVANTAGED INDIVIDUALS.—The term ‘‘small 
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(f) SECTION 7(a) LOANS.—Section 7(a) of the Small 
Business Act (15 U.S.C. 636(a)) is amended by adding at 
the end the following new paragraph: 
‘‘(38) LOANS TO CANNABIS-RELATED LEGITIMATE 
BUSINESSES AND SERVICE PROVIDERS.—The Admin-
istrator may not decline to provide a guarantee for 
a loan under this subsection, and a lender may not 
decline to make a loan under this subsection, to an 
otherwise eligible small business concern solely be-
cause such concern is a cannabis-related legitimate 
business or service provider.’’. 
(g) DISASTER LOANS.—Section 7(b) of the Small 
Business Act (15 U.S.C. 636(b)) is amended by inserting 
after paragraph (15) the following new paragraph: 
‘‘(16) ASSISTANCE
TO
CANNABIS-RELATED
LE-
GITIMATE
BUSINESSES
AND
SERVICE
PROVIDERS.— 
The Administrator may not decline to provide assist-
ance under this subsection to an otherwise eligible 
small business concern solely because such concern is 
a cannabis-related legitimate business or service pro-
vider.’’. 
(h) MICROLOANS.—Section 7(m) of the Small Business 
Act (15 U.S.C. 636(m)) is amended by adding at the end 
the following new paragraph: 
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‘‘(14) ASSISTANCE
TO
CANNABIS-RELATED
LE-
GITIMATE
BUSINESSES
AND
SERVICE
PROVIDERS.— 
The Administrator may not decline to make a loan 
or a grant under this subsection, and an eligible 
intermediary may not decline to provide assistance 
under this subsection to an otherwise eligible bor-
rower, eligible intermediary, or eligible nonprofit en-
tity (as applicable) solely because such borrower, 
intermediary, or nonprofit entity is a cannabis-re-
lated legitimate business or service provider.’’. 
(i) SMALL BUSINESS INVESTMENT COMPANY DEBEN-
TURES
TO
FINANCE
CANNABIS-RELATED
LEGITIMATE 
BUSINESSES AND SERVICE PROVIDERS.—Part A of title III 
of the Small Business Investment Act of 1958 (15 U.S.C. 
681 et seq.) is amended by adding at the end the following 
new section: 
‘‘SEC. 321. DEBENTURES TO FINANCE CANNABIS-RELATED 
LEGITIMATE BUSINESSES AND SERVICE PRO-
VIDERS. 
‘‘(a) GUARANTEES.—The Administrator may not de-
cline to purchase or guarantee a debenture made under this 
title to an otherwise eligible small business investment com-
pany solely because such small business investment com-
pany provides financing to an entity that is a cannabis- 
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related legitimate business or service provider (as defined 
in section 7(a)(38) of the Small Business Act). 
‘‘(b) OTHER ASSISTANCE.—A small business invest-
ment company may not decline to provide assistance under 
this title to an otherwise eligible small business concern sole-
ly because such small business concern is a cannabis-related 
legitimate business or service provider (as defined in section 
7(a)(38) of the Small Business Act).’’. 
(j) STATE
OR
LOCAL
DEVELOPMENT
COMPANY 
LOANS.—Title V of the Small Business Investment Act of 
1958 (15 U.S.C. 695 et seq.) is amended by adding at the 
end the following new section: 
‘‘SEC. 511. LOANS TO FINANCE CANNABIS-RELATED LEGITI-
MATE BUSINESSES AND SERVICE PROVIDERS. 
‘‘(a) LOANS AND LOAN GUARANTEES.—The Adminis-
trator may not decline to make or provide a guarantee for 
a loan under this title to an otherwise eligible qualified 
State or local development company solely because such 
qualified State or local development company provides fi-
nancing to an entity that is a cannabis-related legitimate 
business or service provider (as defined in section 7(a)(38) 
of the Small Business Act). 
‘‘(b) OTHER ASSISTANCE.—A qualified State or local 
development company may not decline to provide assistance 
under this title to an otherwise eligible small business con-
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