manufacturing processes, analyses, guaranties, and 
scientific or irrelevant matters as the Secretary finds 
to be likely to mislead the consumer; 
(2) provide the consumer with adequate infor-
mation as to the identity and quality of the products 
advertised, the characteristics thereof, and the per-
son responsible for the advertisement; 
(3) prohibit statements that are disparaging of 
a competitor’s products or are false, misleading, ob-
scene, or indecent; and 
(4) prevent statements inconsistent with any 
statement on the labeling of the products advertised. 
(b) NONAPPLICATION TO PUBLISHERS AND BROAD-
CASTERS.—The prohibitions of this section and regula-
tions thereunder shall not apply to the publisher of any 
newspaper, periodical, or other publication, or radio broad-
caster, or provider of an interactive computer service with-
in the meaning of the Communications Decency Act (47 
U.S.C. 230 et seq.), unless such publisher or radio broad-
caster is engaged in the business of importing marijuana 
into the United States, or cultivating, producing, manufac-
turing, packaging, or warehousing marijuana, or pur-
chasing marijuana for resale at wholesale, directly or indi-
rectly or through an affiliate. 
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(c) PROTECT KIDS.—Not later than 30 days after the 
date of enactment of this Act, the Secretary of the Treas-
ury shall promulgate regulations that— 
(1) require restrictions on the advertising and 
promotion of products related to cannabis, if the 
Secretary determines that such regulation would be 
appropriate for the protection of the public health, 
taking into account— 
(A) the risks and benefits to the popu-
lation of individuals age 21 and under, includ-
ing users and nonusers of cannabis products; 
(B) the increased or decreased likelihood 
that existing users of cannabis products who 
are age 18 and under will stop using such prod-
ucts; and 
(C) the increased or decreased likelihood 
that individuals age 21 and under who do not 
use cannabis products will start using such 
products; and 
(2) impose restrictions on the advertising and 
promotion of products related to cannabis consistent 
with and to the full extent permitted by the First 
Amendment to the Constitution of the United 
States. 
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(d) ESTABLISHMENT OF FEDERAL MINIMUM CAN-
NABIS AGE.—Chapter 1 of title 23 of the United States 
Code, is amended by adding at the end the following (and 
conforming the table of sections accordingly): 
‘‘SEC. 191. WITHHOLDING OF FUNDS FOR NONCOMPLIANCE. 
‘‘(a) IN GENERAL.—The Secretary of Transportation 
shall withhold 8 per centum of the amount required to 
be apportioned to any State under each of sections 
104(b)(1), 104(b)(3), and 104(b)(4) of title 23 of the 
United States Code on the first day of each fiscal year 
after the second fiscal year beginning after September 30, 
2019, in which the purchase or public possession in such 
State of cannabis by a person who is less than twenty- 
one years of age is lawful. 
‘‘(b) EFFECT
OF WITHHOLDING
OF FUNDS.—No 
funds withheld under this section from apportionment to 
any State after September 30, 2019, shall be available for 
apportionment to that State. 
‘‘(c) CANNABIS DEFINED.—As used in this section, 
the term ‘cannabis’ means the same as ‘marihuana’ as de-
fined in section 102(16) of the Controlled Substances Act 
(21 U.S.C. 802(16)). 
‘‘(d) MEDICAL EXCEPTION.—The Secretary shall not 
apply any withholding under this section to States that 
lawfully permit the use of designated State medical can-
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nabis products, within the meaning of part J of sub-
chapter V of chapter 9 of title 21, United States Code, 
(the Federal Food, Drug, and Cosmetic Act), by persons 
under the age of 21 on the recommendation or prescrip-
tion of a qualified medical professional consistent with 
State law.’’. 
SEC. 208. FEDERAL CANNABIS ADMINISTRATION UNDER 
THE FEDERAL ALCOHOL ADMINISTRATION 
ACT. 
The Federal Alcohol Administration Act (27 U.S.C. 
201 et seq.) is amended by adding at the end the fol-
lowing: 
‘‘TITLE III—CANNABIS 
‘‘Sec. 301. Unlawful business without cannabis permit. 
‘‘Sec. 302. Procedure for issuance of cannabis permit. 
‘‘Sec. 303. Definitions. 
‘‘SEC. 301. UNLAWFUL BUSINESS WITHOUT CANNABIS PER-
MIT. 
‘‘In order to regulate effectively interstate and for-
eign commerce in cannabis and to protect the revenue and 
enforce the postal laws with respect to cannabis: 
‘‘(a) IN GENERAL.—Notwithstanding section 205 of 
the States Reform Act, every person, before commencing 
commerce in cannabis, and at such other time as the Sec-
retary shall by regulation prescribe, shall make application 
for the permit provided for in section 302. The application 
shall be in such form as the Secretary shall prescribe and 
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shall set forth, truthfully and accurately, the information 
called for on the form. 
‘‘(b) IMPORT.—It shall be unlawful, except pursuant 
to a permit issued under this title by the Secretary of the 
Treasury (hereinafter in this title referred to as the ‘Sec-
retary’)— 
‘‘(1) to engage in the business of importing 
cannabis into the United States; or 
‘‘(2) for any person so engaged to sell, offer or 
deliver for sale, contract to sell, or ship, in interstate 
or foreign commerce, directly or indirectly or 
through an affiliate, cannabis so imported. 
‘‘(c) MANUFACTURE AND SALE.—It shall be unlaw-
ful, except pursuant to a permit issued under this title 
by the Secretary— 
‘‘(1) to engage in the business of producing, 
manufacturing, packaging, or warehousing cannabis; 
or 
‘‘(2) for any person so engaged to sell, offer or 
deliver for sale, contract to sell, or ship, in interstate 
or foreign commerce, directly or indirectly or 
through an affiliate, cannabis so produced, manufac-
tured, packaged, or warehoused. 
‘‘(d) RESALE.—It shall be unlawful, except pursuant 
to a permit issued under this title by the Secretary— 
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‘‘(1) to engage in the business of purchasing 
cannabis for resale at wholesale; or 
‘‘(2) for any person so engaged to receive or to 
sell, offer or deliver for sale, contract to sell, or ship, 
in interstate or foreign commerce, directly or indi-
rectly or through an affiliate, cannabis so purchased. 
‘‘(e) REMEDIES FOR VIOLATIONS.— 
‘‘(1) CIVIL FINE.— 
‘‘(A) GENERALLY.—Whoever violates this 
section shall be fined not more than $1,000. 
‘‘(B) SETTLEMENT IN COMPROMISE.—The 
Secretary may decide not to refer a violation of 
this section to the Attorney General for pros-
ecution but instead to collect a payment from 
the violator of no more than $500 for that vio-
lation. 
‘‘(2) CIVIL ACTION FOR RELIEF.—The Attorney 
General may, in a civil action, obtain appropriate re-
lief to prevent and restrain a violation of this title. 
‘‘SEC. 302. PROCEDURE FOR ISSUANCE OF CANNABIS PER-
MIT. 
‘‘(a) WHO ENTITLED TO PERMIT.— 
‘‘(1) GENERALLY.—The Secretary shall issue a 
permit for operations requiring a permit under sec-
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tion 301, and the applicant shall be entitled to such, 
unless the Secretary finds that— 
‘‘(A) the applicant (or if the applicant is a 
corporation, any of its officers, directors, or 
principal stockholders) has, prior to the date of 
application, been convicted of a disqualifying of-
fense; 
‘‘(B) the applicant is, by reason of busi-
ness experience, financial standing, or trade 
connections, not likely to commence operations 
within a reasonable period or to maintain such 
operations in conformity with Federal law; 
‘‘(C) that the operations proposed to be 
conducted by the applicant are in violation of 
the law of the State in which they are to be 
conducted; or 
‘‘(D) the applicant has failed to disclose 
any material information required or made any 
material false statement in the application 
therefor. 
‘‘(2) DISQUALIFYING OFFENSES.—For the pur-
poses of paragraph (1): 
‘‘(A) GENERALLY.—Except as provided for 
in subparagraph (B), a disqualifying offense is 
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an offense related to the production, consump-
tion, or sale of marijuana that is— 
‘‘(i) a felony under Federal or State 
law, if the conviction occurred not later 
than 3 years before the date of application; 
or 
‘‘(ii) a misdemeanor under Federal or 
State law, if the conviction occurred not 
later than 1 year before the application. 
‘‘(B) EXCLUDED OFFENSES.—A disquali-
fying offense does not include a Federal or 
State offense based on conduct that— 
‘‘(i) was legal under State law in the 
State when and where the conduct took 
place; or 
‘‘(ii) is as of the date of the applica-
tion, no longer an offense in that State. 
‘‘(C) STATE SECOND CHANCES PRACTICES 
SAFE HARBOR.—A State has examined the of-
fense or offenses in question, or is in the proc-
ess of examining, for the issuance of a State li-
cense to engage in cannabis commerce, and has 
awarded the applicant a State license to engage 
in cannabis commerce. 
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‘‘(3) GRANDFATHERING
AND
PROSPECTIVE 
COMITY FOR STATE LICENSURE.— 
‘‘(A) GRANDFATHERING.—Any person li-
censed by a State cannabis regulatory authority 
before the passage of this Act to produce, ware-
house, distribute or otherwise transport can-
nabis products, and in good standing with that 
regulatory authority, shall be issued necessary 
Federal permits, licenses, or the like to engage 
in federally regulated commerce upon applica-
tion for the same to the Alcohol and Tobacco 
Tax and Trade Bureau of the Department of 
the Treasury. 
‘‘(B) PROSPECTIVE FEDERAL-STATE PER-
MIT COMITY.—Any person licensed by a State 
cannabis regulatory authority after the passage 
of this Act to produce, warehouse, distribute or 
otherwise transport cannabis products, and in 
good standing with that regulatory authority 
shall be issued necessary Federal permits to en-
gage in federally regulated commerce upon ap-
plication for the same. 
‘‘(C) RULE OF CONSTRUCTION.—Nothing 
in this Act, or the lawful exercise of rights or 
privileges granted herein, shall be construed to 
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infringe upon or prejudice the ability of a State- 
licensed cannabis business to apply for a permit 
to engage in interstate or foreign commerce. 
‘‘(b) REFUSAL OF PERMIT; HEARING.—If upon ex-
amination of any application for a permit the Secretary 
has reason to believe that the applicant is not entitled to 
such permit, the Secretary shall so notify the applicant 
and, upon request by the applicant, afford the applicant 
due notice and opportunity for hearing on the application 
within the meaning of the Administrative Procedure Act 
(5 U.S.C. 500 et seq.). If the Secretary, after affording 
such notice and opportunity for hearing, still finds that 
the applicant is not entitled to a permit hereunder, the 
Secretary shall by order deny the application stating the 
findings that are the basis for the order. The provisions 
of 27 CFR part 200—Rules of Practice in Permit Pro-
ceedings, as amended from time to time, shall be applica-
ble to the jurisdiction, powers, and duties of the Secretary 
of the Treasury under this section. 
‘‘(c) FORM OF APPLICATION.— 
‘‘(1) GENERALLY.—The Secretary shall— 
‘‘(A) prescribe within 60 days of the effec-
tive date of this Act, and consistent with the 
Paperwork Reduction Act, the manner and 
form of all applications for permits under this 
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title (including the facts to be set forth there-
in); 
‘‘(B) prescribe the form of all permits; and 
‘‘(C) specify in any permit the authority 
conferred by the permit and the conditions of 
that permit in accordance with this title. 
‘‘(2) SEPARATE TYPES OF APPLICATIONS AND 
PERMITS.—To the extent deemed necessary by the 
Secretary for the efficient administration of this 
title, the Secretary may require separate applications 
and permits with respect to the various classes of 
cannabis, and with respect to the various classes of 
persons entitled to permits under this title. 
‘‘(3) DISCLAIMER.—The issuance of a permit 
under this title does not deprive the United States 
of any remedy for a violation of law. 
‘‘(d) CONDITIONS.—A permit under this title shall be 
conditioned upon the following: 
‘‘(1) COMPLIANCE.—Compliance with all appli-
cable Federal laws relating to production, sale and 
consumption of cannabis, as well as compliance with 
all applicable State laws relating to said activities in 
the State in which the permit applicant resides and 
does business. 
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‘‘(2) USER FEE.—Payment to the Secretary of 
a reasonable permit fee in an amount determined by 
the Secretary to be sufficient collectively over time 
to offset the cost of implementing and overseeing all 
aspects of cannabis regulation by the Federal Gov-
ernment. For the first 3 years following promulga-
tion of regulations by the Secretary under section 
204 of the States Reform Act, in order to ensure 
small business access, such fee may not exceed 
$10,000 per permit. 
‘‘(3) SBA FEE WAIVER.—The Secretary shall 
waive the user fee for an applicant that is a small 
business or a socially and economically disadvan-
taged business that is a business within the meaning 
of the Small Business Act of 1953 (15 U.S.C. chap-
ter 14A), as interpreted by the Administrator of the 
Small Business Administration. 
‘‘(e) REVOCATION, SUSPENSION, 
AND
ANNUL-
MENT.— 
‘‘(1) GENERALLY.—After due notice and oppor-
tunity for hearing consistent with the Administrative 
Procedure Act (5 U.S.C. 500 et seq.), the Secretary 
may order a permit under this title— 
‘‘(A) revoked or suspended for such period 
as the Secretary deems appropriate, if the Sec-
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retary finds that the permittee has willfully vio-
lated any of the conditions of the permit, but 
for a first violation of the conditions the permit 
shall be subject to suspension only; 
‘‘(B) be revoked if the Secretary finds that 
the permittee has not engaged in the operations 
authorized by the permit for a period of more 
than 2 years; or 
‘‘(C) be annulled if the Secretary finds 
that the permit was procured through fraud, or 
misrepresentation, or concealment of material 
fact. 
‘‘(2) ORDER TO STATE BASIS FOR ORDER.— 
The order shall state the findings that are the basis 
for the order. 
‘‘(f) SERVICE OF ORDERS.—Each order of the Sec-
retary with respect to any denial of application, suspen-
sion, revocation, annulment, or other proceedings, shall be 
served— 
‘‘(1) in person by any officer or employee of the 
Secretary designated by the Secretary or any inter-
nal revenue or customs officer authorized by the 
Secretary for the purpose; or 
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‘‘(2) by mailing the order by registered mail, 
addressed to the applicant or respondent at their 
last known address in the records of the Secretary. 
‘‘(g) PROCEEDINGS.—The provisions of 27 CFR part 
200—Rules of Practice in Permit Proceedings, as amend-
ed from time to time, shall be applicable to the jurisdic-
tion, powers, and duties of the Secretary of the Treasury 
under this section. 
‘‘(h) DURATION.— 
‘‘(1) GENERAL
RULE.—Except as otherwise 
provided in this subsection, a permit issued under 
this title shall continue in effect until suspended, re-
voked, or annulled as provided in this title, or volun-
tarily surrendered. 
‘‘(2) EFFECT
OF
TRANSFER.—If operations 
under a permit issued under this title are trans-
ferred, the permit automatically terminates 30 days 
after the date of that transfer, unless an application 
is made by the transferee before the end of that pe-
riod for a permit under this title for those oper-
ations. If such an application is made, the out-
standing permit shall continue in effect until such 
application is finally acted on by the Secretary. 
‘‘(3) DEFINITION OF TRANSFER.—For the pur-
poses of this section, the term ‘transfer’ means any 
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change of ownership or control, whether voluntary or 
by operation of law. 
‘‘(i) APPEAL AND JUDICIAL REVIEW.— 
‘‘(1) IN GENERAL.—An appeal may be taken by 
the permittee or applicant for a permit from any 
order of the Secretary of the Treasury denying an 
application for, or suspending, revoking, or annul-
ling, a basic permit. Such appeal shall be taken by 
filing, in the court of appeals of the United States 
within any circuit wherein such person resides or 
has their principal place of business, or in the 
United States Court of Appeals for the District of 
Columbia, within 60 days after the entry of such 
order, a written petition praying that the order of 
the Secretary be modified or set aside in whole or 
in part. A copy of such petition shall be forthwith 
transmitted by the clerk of the court to the Sec-
retary, or any officer designated by the Secretary for 
that purpose, and thereupon the Secretary shall file 
in the court the record upon which the order com-
plained of was entered, as provided in section 2112 
of title 28. Upon the filing of such petition such 
court shall have exclusive jurisdiction to affirm, 
modify, or set aside such order, in whole or in part. 
No objection to the order of the Secretary shall be 
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considered by the court unless such objection shall 
have been urged before the Secretary or unless there 
were reasonable grounds for failure so to do. The 
finding of the Secretary as to the facts, if supported 
by substantial evidence, shall be conclusive. If any 
party shall apply to the court for leave to adduce ad-
ditional evidence, and shall show to the satisfaction 
of the court that such additional evidence is material 
and that there were reasonable grounds for failure 
to adduce such evidence in the proceeding before the 
Secretary, the court may order such additional evi-
dence to be taken before the Secretary and to be ad-
duced upon the hearing in such manner and upon 
such terms and conditions as to the court may seem 
proper. The Secretary may modify their findings as 
to the facts by reason of the additional evidence so 
taken, and they shall file with the court such modi-
fied or new findings, which, if supported by substan-
tial evidence, shall be conclusive, and their rec-
ommendation, if any, for the modification or setting 
aside of the original order. The judgment and decree 
of the court affirming, modifying, or setting aside, in 
whole or in part, any such order of the Secretary 
shall be final, subject to review by the Supreme 
Court of the United States upon certiorari or certifi-
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cation as provided in section 1254 of title 28. The 
commencement of proceedings under this subsection 
shall, unless specifically ordered by the court to the 
contrary, operate as a stay of the Secretary’s order. 
These proceedings shall be subject to the require-
ments of the Administrative Procedure Act (5 
U.S.C. 500 et seq.). Should the permitee substan-
tially prevail, such permitee shall be entitled to at-
torneys’ fees and costs associated with compelling a 
decision under this section. 
‘‘(2) ADDITIONAL APPLICANT MANDAMUS REM-
EDY.—Should the Secretary fail to make a permit 
application decision within ninety days of submission 
of a completed application, an applicant shall have 
the right to compel a decision and issuance of a per-
mit pursuant to section 1361 of title 28, United 
States Code, in any United States district court 
where the applicant resides or does business or in 
the United States District Court for the District of 
Columbia. Should the applicant substantially prevail, 
such applicant shall be entitled to attorneys’ fees 
and costs associated with compelling a decision 
under this section. Such mandamus remedy shall be 
in addition to any other remedies available to appli-
cants under the Administrative Procedure Act. 
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