Title: States Reform Act
Policy area: Crime and Law Enforcement

Summary:
States Reform Act
This bill removes marijuana from Schedule I of the Controlled Substance Act and provides for federal regulation of marijuana in a manner similar to alcohol. Among other provisions, the bill establishes a federal permitting process for marijuana businesses, provides for federal oversight of interstate medical marijuana products, and creates an excise tax structure for marijuana.

[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5977 Introduced in House (IH)]

<DOC>






117th CONGRESS
  1st Session
                                H. R. 5977

  To amend the Controlled Substances Act regarding marihuana, and for 
                            other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           November 15, 2021

  Ms. Mace (for herself, Mr. McClintock, Mr. Young, Mr. Mast, and Mr. 
   Meijer) introduced the following bill; which was referred to the 
Committee on the Judiciary, and in addition to the Committees on Energy 
   and Commerce, Natural Resources, Agriculture, Transportation and 
    Infrastructure, Armed Services, Ways and Means, Small Business, 
   Veterans' Affairs, Oversight and Reform, Education and Labor, and 
  Foreign Affairs, 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

_______________________________________________________________________

                                 A BILL


 
  To amend the Controlled Substances Act regarding marihuana, and for 
                            other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``States Reform 
Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
 TITLE I--DECRIMINALIZATION OF MARIJUANA AND DEFERENCE TO STATE POWERS 
                             OF PROHIBITION

Sec. 101. Federal decriminalization of cannabis, and State control 
                            deference.
             TITLE II--REGULATION OF MARIJUANA LIKE ALCOHOL

Sec. 201. Food and Drug Administration.
Sec. 202. Department of Agriculture regulation of raw cannabis like 
                            barley, hops, and grain.
Sec. 203. Addition of raw cannabis to certain authorities relating to 
                            agricultural production.
                 ``Subtitle H--Raw Cannabis Production

        ``Sec. 298A. Definitions.
        ``Sec. 298B. State and Tribal plans.
        ``Sec. 298C. Department of Agriculture plan.
        ``Sec. 298D. Authority to issue regulations and guidelines.
Sec. 204. Administration like alcohol under Tax and Trade Bureau.
Sec. 205. Transferring agency functions with regard to marijuana.
Sec. 206. Transition safe harbor and administrative remedies.
Sec. 207. Unfair advertising practices and 21 age limit.
Sec. 208. Federal cannabis administration under the Federal Alcohol 
                            Administration Act.
                         ``TITLE III--CANNABIS

        ``Sec. 301. Unlawful business without cannabis permit.
        ``Sec. 302. Procedure for issuance of cannabis permit.
        ``Sec. 304. Definitions.
    TITLE III--DESIGNATED STATE MEDICAL CANNABIS PRODUCT SAFETY ACT

Sec. 301. Grandfathering of State medical cannabis products into 
                            interstate commerce.
          ``Part J--Designated State Medical Cannabis Products

        ``Sec. 360ggg. Definitions.
        ``Sec. 360ggg-1. Regulation of medical cannabis products.
        ``Sec. 360ggg-2. Cannabis-infused foods, beverages, and 
                            supplements.
        ``Sec. 360ggg-3. Cannabis cosmetics.
        ``Sec. 360ggg-4. Liability and method of payment.
        ``Sec. 360ggg-5. Private right of action and administrative 
                            remedy.
           TITLE IV--SMALL BUSINESS ADMINISTRATION PROVISIONS

Sec. 401. Fair Small Business Administration access.
Sec. 402. Disaster loan nondiscrimination.
Sec. 403. Microloan nondiscrimination.
Sec. 404. Small business investment company debenture 
                            nondiscrimination.
        ``Sec. 321. Debentures to finance cannabis-related businesses 
                            and service providers.
Sec. 405. State or local development loan non-discrimination.
        ``Sec. 511. Loans to cannabis-related legitimate businesses and 
                            service providers.
Sec. 406. Rulemaking and disbursement.
Sec. 407. Administrative Procedure Act and mandamus remedies.
               TITLE V--IMPOSITION OF CANNABIS EXCISE TAX

Sec. 501. Law Enforcement Retraining and Successful Second Chances 
                            Fund.
        ``Sec. 9512. Law Enforcement Retraining and Second Chances 
                            Fund.
Sec. 502. Cannabis Revenue and Regulation Act.
                    ``Chapter 56--Cannabis Products

                   ``subchapter a--imposition of tax

        ``Sec. 5901. Imposition of tax.
        ``Sec. 5902. Definitions.
        ``Sec. 5903. Liability and method of payment.
        ``Sec. 5904. Exemption from tax.
        ``Sec. 5905. Credit, refund, or drawback of tax.
                       ``subchapter b--operations

        ``Sec. 5911. Inventories, reports, and records.
        ``Sec. 5912. Packaging and labeling.
        ``Sec. 5913. Purchase, receipt, possession, or sale of cannabis 
                            products after removal.
        ``Sec. 5914. Restrictions relating to marks, labels, notices, 
                            and packages.
        ``Sec. 5915. Restriction on importation of previously exported 
                            cannabis products.
                       ``subchapter c--penalties

        ``Sec. 5921. Civil penalties.
Sec. 503. Reports and conforming amendments.
                  TITLE VI--VETERANS' CARE AND ACCESS

Sec. 601. Nondiscrimination in Federal hiring for veteran medical 
                            cannabis users.
Sec. 602. Authorized provision of information on State-approved 
                            marijuana programs to veterans.
       TITLE VII--MISCELLANEOUS UPDATES AND TECHNICAL AMENDMENTS

Sec. 701. United States international cannabis commerce policy.
Sec. 702. Continued Federal employee drug testing.
Sec. 703. Demographic data on new industry of cannabis business owners 
                            and employees.
Sec. 704. Conforming amendment to create uniformity of references in 
                            existing law to cannabis, marijuana, or 
                            marihuana.
Sec. 705. Effective upon enactment.

 TITLE I--DECRIMINALIZATION OF MARIJUANA AND DEFERENCE TO STATE POWERS 
                             OF PROHIBITION

SEC. 101. FEDERAL DECRIMINALIZATION OF CANNABIS, AND STATE CONTROL 
              DEFERENCE.

    (a) Preemption of Cannabis Removed From Schedule of Controlled 
Substances.--
            (1) Removal of federal controlled substances act 
        preemption.--Subsection (c) of schedule I of section 202(c) of 
        the Controlled Substances Act (21 U.S.C. 812) is amended--
                    (A) by striking ``(10) Marihuana.''; and
                    (B) by striking ``(17) Tetrahydrocannabinols, 
                except for tetrahydrocannabinols in hemp (as defined in 
                section 297A of the Agricultural Marketing Act of 
                1946).''.
            (2) Treatment like alcohol in controlled substances act.--
        The Controlled Substances Act (21 U.S.C. 802(6)) is amended--by 
        inserting ``Marihuana,'' after ``malt beverages,''.
            (3) Residual rulemaking.--Not later than 30 days after the 
        date of the enactment of this Act, the Attorney General shall 
        administratively revise the current regulations at 21 CFR 
        1308.11 and related provisions to clarify that for the purposes 
        of the Controlled Substances Act and related statutes, in light 
        of the States Reform Act, marihuana and tetrahydrocannabinols 
        are each deemed by Congress to be a drug or other substance 
        that does not meet the requirements for inclusion in any 
        schedule. Such administrative rulemaking amendments shall not 
        be subject to the requirements of the Administrative Procedure 
        Act other than notice of changes in the Federal Register. Any 
        regulations inconsistent with this Act shall be deemed invalid 
        on the date of enactment of this Act for all purposes including 
        but not limited to any offense committed, case pending, 
        conviction entered, and, in the case of a juvenile, any offense 
        committed, case pending, and adjudication of juvenile 
        delinquency entered before, on, or after the date of enactment 
        of this Act.
    (b) Conforming Amendments to Controlled Substances Act and 
Controlled Substances Import and Export Act.--
            (1) The Controlled Substances Act (21 U.S.C. 801 et seq.) 
        is amended--
                    (A) in section 102(44) (21 U.S.C. 802(44)), by 
                striking ``marihuana,'';
                    (B) in section 401(b) (21 U.S.C. 841(b))--
                            (i) in paragraph (1)--
                                    (I) in subparagraph (A)--
                                            (aa) in clause (vi), by 
                                        inserting ``or'' after the 
                                        semicolon;
                                            (bb) by striking clause 
                                        (vii); and
                                            (cc) by redesignating 
                                        clause (viii) as clause (vii);
                                    (II) in subparagraph (B)--
                                            (aa) in clause (vi), by 
                                        inserting ``or'' after the 
                                        semicolon;
                                            (bb) by striking clause 
                                        (vii); and
                                            (cc) by redesignating 
                                        clause (viii) as clause (vii);
                                    (III) in subparagraph (C), in the 
                                first sentence, by striking 
                                ``subparagraphs (A), (B), and (D)'' and 
                                inserting ``subparagraphs (A) and 
                                (B)'';
                                    (IV) by striking subparagraph (D);
                                    (V) by redesignating subparagraph 
                                (E) as subparagraph (D); and
                                    (VI) in subparagraph (D)(i), as so 
                                redesignated, by striking 
                                ``subparagraphs (C) and (D)'' and 
                                inserting ``subparagraph (C)'';
                            (ii) by striking paragraph (4); and
                            (iii) by redesignating paragraphs (5), (6), 
                        and (7) as paragraphs (4), (5), and (6), 
                        respectively;
                    (C) in section 402(c)(2)(B) (21 U.S.C. 
                842(c)(2)(B)), by striking ``, marihuana,'';
                    (D) in section 403(d)(1) (21 U.S.C. 843(d)(1)), by 
                striking ``, marihuana,'';
                    (E) in section 418(a) (21 U.S.C. 859(a)), by 
                striking the last sentence;
                    (F) in section 419(a) (21 U.S.C. 860(a)), by 
                striking the last sentence;
                    (G) in section 422(d) (21 U.S.C. 863(d))--
                            (i) in the matter preceding paragraph (1), 
                        by striking ``marijuana,''; and
                            (ii) in paragraph (5), by striking ``, such 
                        as a marihuana cigarette,''; and
                    (H) in section 516(d) (21 U.S.C. 886(d)), by 
                striking ``section 401(b)(6)'' each place the term 
                appears and inserting ``section 401(b)(5)''.
            (2) Section 1010(b) of the Controlled Substances Import and 
        Export Act (21 U.S.C. 960) is amended--
                    (A) in paragraph (1)--
                            (i) in subparagraph (F), by inserting 
                        ``or'' after the semicolon;
                            (ii) by striking subparagraph (G); and
                            (iii) by redesignating subparagraph (H) as 
                        subparagraph (G);
                    (B) in paragraph (2)--
                            (i) in subparagraph (F), by inserting 
                        ``or'' after the semicolon;
                            (ii) by striking subparagraph (G); and
                            (iii) by redesignating subparagraph (H) as 
                        subparagraph (G);
                    (C) in paragraph (3), by striking ``paragraphs (1), 
                (2), and (4)'' and inserting ``paragraphs (1) and 
                (2)'';
                    (D) by striking paragraph (4); and
                    (E) by redesignating paragraphs (5), (6), and (7) 
                as paragraphs (4), (5), and (6), respectively.
    (c) Other Conforming Amendments.--
            (1) National forest system drug control act of 1986.--The 
        National Forest System Drug Control Act of 1986 (16 U.S.C. 559b 
        et seq.) is amended--
                    (A) in section 15002(a) (16 U.S.C. 559b(a)) by 
                striking ``marijuana and other'';
                    (B) in section 15003(2) (16 U.S.C. 559c(2)) by 
                striking ``marijuana and other''; and
                    (C) in section 15004(2) (16 U.S.C. 559d(2)) by 
                striking ``marijuana and other''.
            (2) Interception of communications.--Section 2516 of title 
        18, United States Code, is amended--
                    (A) in subsection (1)(e), by striking 
                ``marihuana,''; and
                    (B) in subsection (2) by striking ``marihuana''.
            (3) FMCSA provisions.--
                    (A) Conforming amendment.--Section 31301(5) of 
                title 49, United States Code, is amended by striking 
                ``section 31306,'' and inserting ``sections 31306, 
                31306a, and subsections (b) and (c) of section 
                31310,''.
                    (B) Definition.--Section 31306(a) of title 49, 
                United States Code, is amended--
                            (i) by striking ``means any substance'' and 
                        inserting the following: ``means--
                    ``(A) any substance''; and
                            (ii) by striking the period at the end and 
                        inserting:
                    ``(B) any substance not covered under subparagraph 
                (A) that was a substance under such section as of 
                December 1, 2018, and specified by the Secretary of 
                Transportation.''.
                    (C) Disqualifications.--Section 31310(b) of title 
                49, United States Code, is amended by adding at the end 
                the following:
            ``(3) In this subsection and subsection (c), the term 
        `controlled substance' has the meaning given such term in 
        section 31306(a).''.
            (4) FAA provisions.--Section 45101 of title 49, United 
        States Code, is amended--
                    (A) by striking ``means any substance'' and 
                inserting the following: ``means--
                    ``(A) any substance''; and
                    (B) by striking the period at the end and 
                inserting:
                    ``(B) any substance not covered under subparagraph 
                (A) that was a substance under such section as of 
                December 1, 2018, and specified by the Secretary of 
                Transportation.''.
            (5) FRA provisions.--Section 20140(a) of title 49, United 
        States Code, is amended--
                    (A) by striking ``means any substance'' and 
                inserting the following: ``means--
                    ``(A) any substance''; and
                    (B) by striking the period at the end and 
                inserting:
                    ``(B) any substance not covered under subparagraph 
                (A) that was a substance under such section as of 
                December 1, 2018, and specified by the Secretary of 
                Transportation.''.
            (6) FTA provisions.--Section 5331(a)(1) of title 49, United 
        States Code, is amended--
                    (A) by striking ``means any substance'' and 
                inserting the following: ``means--
                    ``(A) any substance''; and
                    (B) by striking the period at the end and 
                inserting:
                    ``(B) any substance not covered under subparagraph 
                (A) that was a substance under such section as of 
                December 1, 2018, and whose use the Secretary of 
                Transportation decides has a risk to transportation 
                safety.''.
            (7) GCA provisions.--Section 921(a) of title 18, United 
        States Code, is amended by adding at the end the following:
            ``(36) The term `unlawful user of or addicted to any 
        controlled substance' shall not include a person by reason of 
        unlawful use of or addiction to marihuana (as defined in 
        section 102(16) of the Controlled Substances Act, 21 U.S.C. 
        802(16)).''.
    (d) Second Chances for Nonviolent Cannabis Offenders.--
            (1) Retroactive application to marihuana offenses.--The 
        amendments made by this section to the Controlled Substances 
        Act (21 U.S.C. 801 et seq.) are retroactive and shall apply to 
        any offense committed, case pending, conviction entered, and, 
        in the case of a juvenile, any offense committed, case pending, 
        or adjudication of juvenile delinquency entered before, on, or 
        after the date of enactment of this Act--
                    (A) Limitation of retroactive application to 
                nonviolent and related nonviolent marihuana offenses.--
                Such application and retroactivity described in this 
                subsection (d) shall extend to any nonviolent offense 
                or offenses covered under paragraph (1) and any related 
                nonviolent offenses that would not have satisfied all 
                elements of the charged offense or offenses but for the 
                involvement of marijuana, marihuana as defined in 21 
                U.S.C. 802(16), or tetrahydrocannabinols, related 
                nonviolent cases pending, related nonviolent 
                convictions entered, and, in the case of a juvenile, 
                any related nonviolent offense committed, related 
                nonviolent case pending, or related nonviolent 
                adjudication of juvenile delinquency entered before, 
                on, or after the date of enactment of this Act. This 
                provision is meant to be extended to nonviolent 
                offenses charged, pending, or otherwise, previously 
                found to be crimes of violence subsequently found to be 
                unconstitutionally vague or restricted, e.g., United 
                States v. Davis, 139 S. Ct. 2319 (2019) (holding 18 
                U.S.C. 924(c) residual clause unconstitutionally 
                vague); Sessions v. Dimaya, 138 S. Ct. 1204 (2018) 
                (finding 18 U.S.C. 16(b) to be unconstitutionally void 
                for vagueness as incorporated into other statutes).
                    (B) Limitation to only cannabis.--This provision 
                applies solely to persons who traded exclusively in 
                marijuana, marihuana as defined in 21 U.S.C. 802(16), 
                or tetrahydrocannabinols rather than other substances 
                controlled under the Controlled Substances Act.
                    (C) Scope.--This provision applies to each and 
                every organ of the Federal Government.
                    (D) Post-passage limitation.--This provision does 
                not apply to acts or transactions occurring after the 
                passage of this Act that are not in compliance with 
                this Act and other applicable laws.
                    (E) Foreign drug cartel members specifically 
                excluded.--This provision does not apply to persons 
                that are or were merely the instrumentality of a 
                foreign agent, ``drug cartel'', or power.
                    (F) DUI exclusion.--This provision does not apply 
                specifically to convictions or sentences of an offense 
                of operating a motor vehicle under the influence of a 
                drug or alcohol within the meaning of title 18 of the 
                United States Code, section 13(b), an offense of 
                operating or being in actual physical control of a 
                motor vehicle within the meaning of title 36, section 
                4.23 of the Code of Federal Regulations, or drunken or 
                reckless operation of vehicle, aircraft or vessel 
                within the meaning of article 111 of the Uniform Code 
                of Military Justice, title 10 of the United States 
                Code, section 911.
                    (G) Judicial review.--Questions of non-violence are 
                reviewable in any proceeding initiated under this 
                subsection (d) or the following subsection (e). For an 
                example of a person considered under this law to be a 
                nonviolent cannabis offender based on the totality of 
                facts in the case, please refer to the case of United 
                States v. Angelos, 345 F. Supp. 2d 1227 (D. Utah 2004).
            (2) Application to pending actions.--For all pending 
        criminal charges or cases and convictions awaiting sentencing 
        impacted by amendments made by this subsection to the 
        Controlled Substances Act (21 U.S.C. 801 et seq.), the attorney 
        for the Government shall drop the relevant charges or seek 
        dismissal of all pending charges within 14 days after the date 
        of enactment of this Act. Any person held in pretrial detention 
        and entitled to dismissal of relevant charges under this 
        provision, and not detained for any other reason, shall be 
        entitled to issuance of a writ under 28 U.S.C. 2241 or 28 
        U.S.C. 1361, to effectuate immediate release.
            (3) Application to defendants previously sentenced.--In the 
        case of a defendant who, before the date of enactment of this 
        Act, was convicted or sentenced for any Federal offense 
        involving marijuana, marihuana as defined in 21 U.S.C. 802(16), 
        or tetrahydrocannabinols and not serving a sentence for any 
        conduct not covered by this Act or serving multiple sentences 
        as provided in 18 U.S.C. 3584, the Director of the Bureau of 
        Prisons, United States Marshals Service, or U.S. Parole 
        Commission shall release such individual from its control 
        within 14 days after the date of enactment of this Act. Any 
        person not so timely released and entitled to such under this 
        provision shall be entitled to issuance of a writ under 28 
        U.S.C. 2241 or 28 U.S.C. 1361, to effectuate immediate release.
            (4) Cumulative sentencing reconsideration.--In the case of 
        a defendant who, before the date of enactment of this Act, was 
        convicted or sentenced for any Federal offense involving 
        marijuana, marihuana, or tetrahydrocannabinols but is also 
        serving a sentence for any other crime not covered by this Act, 
        the sentencing court may, on motion of the defendant, the 
        Director of the Bureau of Prisons, the attorney for the 
        Government, or on its own motion, impose a reduced sentence 
        after considering the factors set forth in section 3553(a) of 
        title 18, United States Code.
            (5) Cessation of all marihuana administrative actions and 
        repatriation of property.--Notwithstanding any other provision 
        of law, the Federal Government shall not pursue, and shall 
        immediately desist any present administrative or enforcement 
        action, or criminal or civil asset forfeiture proceeding, 
        against any U.S. person where the cause of controversy is 
        rooted in the illicit marihuana, as defined in 21 U.S.C. 
        802(16), or tetrahydrocannabinols trade for nonviolent acts 
        having occurred between the passage of the Marijuana Tax Act of 
        1937 (Public Law 75-238, 50 Stat. 551) and this Act, nor shall 
        the proceeds of such trade or acts be considered the proceeds 
        of illegal drug trade or any kind of criminal or illicit 
        activity under sections 981, 1956 or 1957 of title 18, United 
        States Code, or any other provision of law, even if such 
        activity occurred before the date of enactment of this Act.
                    (A) Limitation to only cannabis.--This provision 
                applies solely to persons who traded exclusively in 
                marijuana, marihuana as defined in 21 U.S.C. 802(16), 
                or tetrahydrocannabinols rather than other substances 
                controlled under the Controlled Substances Act.
                    (B) Scope.--This provision applies to each and 
                every organ of the Federal Government.
                    (C) Post-passage limitation.--This provision does 
                not apply to acts or transaction occurring after the 
                passage of this Act that are not in compliance with 
                this Act and other applicable laws.
                    (D) Foreign drug cartel members specifically 
                excluded.--This provision does not apply to persons 
                that are or were merely the instrumentality of a 
                foreign agent, ``drug cartel'', or power.
                    (E) DUI exclusion.--This provision does not apply 
                specifically to convictions or sentences of an offense 
                of operating a motor vehicle under the influence of a 
                drug or alcohol within the meaning of title 18 of the 
                United States Code, section 13(b), an offense of 
                operating or being in actual physical control of a 
                motor vehicle within the meaning of title 36, section 
                4.23 of the Code of Federal Regulations, or drunken or 
                reckless operation of a vehicle, aircraft or vessel 
                within the meaning of article 111 of the Uniform Code 
                of Military Justice, title 10 of the United States 
                Code, section 911.
            (6) Application to military law.--Notwithstanding any other 
        provision of law, the provisions of this subsection (d) shall 
        apply to proceedings involving military courts, tribunals, 
        courts-martial, and offenses under the Uniform Code of Military 
        Justice.
                    (A) Former servicemembers and veterans that 
                received other than honorable, bad conduct, or 
                dishonorable discharges premised solely on nonviolent 
                cannabis offenses covered under this subsection (d) 
                shall be entitled to petition and receive from a 
                service branch discharge review board or the Board of 
                Correction for Military Records, as jurisdictionally 
                appropriate, an upgrade to a general discharge.
    (e) Expungement of Nonviolent Federal Cannabis Offenses.--
Subsection (c) of 18 U.S.C. 3607 is amended--
            (1) by adding (1) before ``If'';
            (2) by adding the following after ``thereof'':
            ``(2) Not later than 1 year after the date of the enactment 
        of this Act, each Federal district shall conduct a 
        comprehensive review and issue an order expunging, without 
        financial commitment from the offender, each conviction or 
        adjudication for any Federal offense involving marijuana, 
        marihuana as defined in 21 U.S.C. 802(16), or 
        tetrahydrocannabinols, including related nonviolent marihuana 
        offenses, entered by each Federal court in the district before 
        the date of enactment of this Act. Each Federal court shall 
        also issue an order expunging any arrests associated with each 
        expunged conviction or adjudication. The expungement order 
        shall direct that there be expunged from all official records 
        all references to his or her arrest for the offense, the 
        institution of criminal proceedings against him, and the 
        results thereof.''; and
            (3) by adding (3) before ``The.''.

             TITLE II--REGULATION OF MARIJUANA LIKE ALCOHOL

SEC. 201. FOOD AND DRUG ADMINISTRATION.

    (a) The Food and Drug Administration shall have the same 
authorities with respect to cannabis products that it has with respect 
to alcohol and no more.
    (b) This clause shall not be construed to limit the Food and Drug 
Administration's role in regulating designated State medical cannabis 
products, drugs or botanical drugs containing cannabis or its 
derivatives, cannabis cosmetics, or dietary supplements containing 
cannabis or its derivatives under part J of subchapter V of chapter 9 
of title 21 of the United States Code (the Federal Food, Drug, and 
Cosmetic Act).

SEC. 202. DEPARTMENT OF AGRICULTURE REGULATION OF RAW CANNABIS LIKE 
              BARLEY, HOPS, AND GRAIN.

    (a) USDA To Regulate Raw Cannabis Farming.--The United States 
Department of Agriculture shall regulate the farming and production of 
raw cannabis, including, but not limited to, the seeds, mature stalks, 
and cultivation of raw cannabis as a traditional agricultural 
commodity, such as grain, hops, and barley, and as a specialty crop.
    (b) Rulemaking Authority.--Not later than 90 days after the date of 
enactment of this Act, the Secretary of Agriculture or his or her 
designee shall--
            (1) issue guidance and enter formal rulemaking as necessary 
        to carry out this Act and to bring raw cannabis into line with 
        the treatment of other traditional agricultural commodities, 
        such as grain, hops, and barley;
            (2) issue guidance dually designating raw cannabis as a 
        specialty crop in addition to an agricultural commodity; and
            (3) without regard to the notice and comment provisions of 
        section 553 of title 5, United States Code, the Secretary of 
        Agriculture shall revise part 990 of title 7, Code of Federal 
        Regulations, make any conforming changes that are necessary as 
        a result of this section and the amendments made by this 
        section.
    (c) Raw Cannabis Defined; Not Finished Cannabis Products.--Raw 
cannabis refers to marihuana within the meaning of section 801(16) of 
the Controlled Substances Act (21 U.S.C. 801 et seq.) including, but 
not limited to, all parts of the plant Cannabis sativa L., whether 
growing or not; the seeds thereof, and the mature stalks of the plant. 
Raw cannabis does not include finished products meant for commercial 
sale as cannabis products regulated under title III of the Federal 
Alcohol Administration Act or designated State medical cannabis 
products regulated under part J of subchapter V of chapter 9 of title 
21 of the United States Code (the Federal Food, Drug, and Cosmetic 
Act), such as the resin extracted from any part of such plant; and 
every compound, manufacture, salt, derivative, mixture, or preparation 
of such plant or its resin (or industrial hemp).
    (d) Right of Action.--An adversely affected person or business 
shall have private right of action under the Administrative Procedure 
Act (5 U.S.C. 500 et seq.) and the Mandamus Act (28 U.S.C. 1361) to 
compel the Secretary or the designated officer, employee or agent of 
the Department of Agriculture to promulgate regulations or undertake 
and finalize rulemaking required under this Act that are not 
promulgated or published within the time frames set forth herein, or to 
act on applications for the permits or licenses herein required, within 
the time frames set forth herein, or to enjoin agency action. The 
exclusive venue for bringing any such action shall be the District 
Court for the District of Columbia. Upon demonstration of undue delay 
or failure to adhere strictly to statutory deadlines, or other 
violations of law and equity, equitable relief in the form of a writ of 
mandamus compelling action shall issue, among such other relief as the 
court may see fit.

SEC. 203. ADDITION OF RAW CANNABIS TO CERTAIN AUTHORITIES RELATING TO 
              AGRICULTURAL PRODUCTION.

    (a) Agricultural Marketing Act of 1946.--The Agricultural Marketing 
Act of 1946 (7 U.S.C. 1621 et seq.) is amended by adding at the end the 
following:

                 ``Subtitle H--Raw Cannabis Production

``SEC. 298A. DEFINITIONS.

    ``In this subtitle:
            ``(1) Raw cannabis.--The term `raw cannabis' has the same 
        meaning as it is given in section 202(3) of the States Reform 
        Act.
            ``(2) Indian tribe.--The term `Indian tribe' has the 
        meaning given the term in section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 5304).
            ``(3) Secretary.--The term `Secretary' means the Secretary 
        of Agriculture.
            ``(4) State.--The term `State' means--
                    ``(A) a State;
                    ``(B) the District of Columbia;
                    ``(C) the Commonwealth of Puerto Rico; and
                    ``(D) any other territory or possession of the 
                United States.
            ``(5) State department of agriculture.--The term `State 
        department of agriculture' means the agency, commission, or 
        department of a State government responsible for agriculture in 
        the State.
            ``(6) Tribal government.--The term `Tribal government' 
        means the governing body of an Indian tribe.

``SEC. 298B. STATE AND TRIBAL PLANS.

    ``(a) Submission.--
            ``(1) In general.--A State or Indian tribe desiring to have 
        primary regulatory authority over the production of the raw 
        cannabis in the State or territory of the Indian tribe shall 
        submit to the Secretary, through the State department of 
        agriculture (in consultation with the Governor and chief law 
        enforcement officer of the State) or the Tribal government, as 
        applicable, a plan under which the State or Indian tribe 
        monitors and regulates that production as described in 
        paragraph (2).
            ``(2) Contents.--A State or Tribal plan referred to in 
        paragraph (1)--
                    ``(A) shall only be required to include--
                            ``(i) a practice to maintain relevant 
                        information regarding land on which raw 
                        cannabis is produced in the State or territory 
                        of the Indian tribe, including a legal 
                        description of the land, for a period of not 
                        less than 3 calendar years;
                            ``(ii) a procedure for the effective 
                        disposal of products that are produced in 
                        violation of this subtitle; and
                            ``(iii) a procedure to comply with the 
                        enforcement procedures under subsection (d); 
                        and
                    ``(B) may include any other practice or procedure 
                established by a State or Indian tribe, as applicable, 
                to the extent that the practice or procedure is 
                consistent with this subtitle.
            ``(3) Relation to state and tribal law.--
                    ``(A) No preemption.--Nothing in this subsection 
                preempts or limits any law of a State or Indian tribe 
                regulating the production of raw cannabis, to the 
                extent that law is consistent with this subtitle.
                    ``(B) References in plans.--A State or Tribal plan 
                referred to in paragraph (1) may include a reference to 
                a law of the State or Indian tribe regulating the 
                production of raw cannabis, to the extent that law is 
                consistent with this subtitle.
    ``(b) Approval.--
            ``(1) In general.--Not later than 60 days after receipt of 
        a State or Tribal plan under subsection (a), the Secretary 
        shall--
                    ``(A) approve the State or Tribal plan if the State 
                or Tribal plan complies with subsection (a); or
                    ``(B) disapprove the State or Tribal plan only if 
                the State or Tribal plan does not comply with 
                subsection (a).
            ``(2) Amended plans.--If the Secretary disapproves a State 
        or Tribal plan under paragraph (1)(B), the State, through the 
        State department of agriculture (in consultation with the 
        Governor and chief law enforcement officer of the State) or the 
        Tribal government, as applicable, may submit to the Secretary 
        an amended State or Tribal plan that complies with subsection 
        (a).
    ``(c) Technical Assistance.--The Secretary may provide technical 
assistance to a State or Indian tribe in the development of a State or 
Tribal plan under subsection (a).
    ``(d) Violations.--
            ``(1) In general.--A violation of a State or Tribal plan 
        approved under subsection (b) shall be subject to enforcement 
        solely in accordance with this subsection.
            ``(2) Negligent violations.--
                    ``(A) In general.--A raw cannabis producer in a 
                State or the territory of an Indian tribe for which a 
                State or Tribal plan is approved under subsection (b) 
                shall be subject to subparagraph (B) of this paragraph 
                if the State department of agriculture or Tribal 
                government, as applicable, determines that the raw 
                cannabis producer has negligently violated the State or 
                Tribal plan, including by negligently--
                            ``(i) failing to provide a legal 
                        description of land on which the producer 
                        produces raw cannabis; or
                            ``(ii) failing to obtain a license or other 
                        required authorization from the State 
                        department of agriculture or Tribal government, 
                        as applicable.
                    ``(B) Corrective action plan.--A raw cannabis 
                producer described in subparagraph (A) shall comply 
                with a plan established by the State department of 
                agriculture or Tribal government, as applicable, to 
                correct the negligent violation, including--
                            ``(i) a reasonable date by which the raw 
                        cannabis producer shall correct the negligent 
                        violation; and
                            ``(ii) a requirement that the raw cannabis 
                        producer shall periodically report to the State 
                        department of agriculture or Tribal government, 
                        as applicable, on the compliance of the raw 
                        cannabis producer with the State or Tribal plan 
                        for a period of not less than the next 2 
                        calendar years.
                    ``(C) Result of negligent violation.--Except as 
                provided in subparagraph (D), a raw cannabis producer 
                that negligently violates a State or Tribal plan under 
                subparagraph (A) shall not be subject to any criminal 
                or civil enforcement action by the Federal Government 
                or any State government, Tribal government, or local 
                government other than the enforcement action authorized 
                under subparagraph (B).
                    ``(D) Repeat violations.--A raw cannabis producer 
                that negligently violates a State or Tribal plan under 
                subparagraph (A) 3 times in a 5-year period shall be 
                ineligible to produce raw cannabis for a period of 5 
                years beginning on the date of the third violation.
            ``(3) Other violations.--If the State department of 
        agriculture or Tribal government in a State or the territory of 
        an Indian tribe for which a State or Tribal plan is approved 
        under subsection (b), as applicable, determines that a raw 
        cannabis producer in the State or territory has violated the 
        State or Tribal plan with a culpable mental state greater than 
        negligence--
                    ``(A) the State department of agriculture or Tribal 
                government, as applicable, shall immediately report the 
                raw cannabis producer to--
                            ``(i) the Secretary of Agriculture; and
                            ``(ii) in the case of a State department of 
                        agriculture, the chief agricultural official of 
                        the State; and
                    ``(B) paragraph (1) of this subsection shall not 
                apply to the violation.
    ``(e) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.
    ``(f) Effect.--Nothing in this section prohibits the production of 
raw cannabis in a State or the territory of an Indian tribe for which a 
State or Tribal plan is not approved under this section in accordance 
with other Federal laws (including regulations).

``SEC. 298C. DEPARTMENT OF AGRICULTURE PLAN.

    ``(a) Department of Agriculture Plan.--
            ``(1) In general.--In the case of a State or Indian tribe 
        for which a State or Tribal plan is not approved under section 
        298B, the production of raw cannabis in that State or the 
        territory of that Indian tribe shall be subject to a plan 
        established by the Secretary to monitor and regulate that 
        production in accordance with paragraph (2).
            ``(2) Content.--A plan established by the Secretary under 
        paragraph (1) shall include--
                    ``(A) a practice to maintain relevant information 
                regarding land on which raw cannabis is produced in the 
                State or territory of the Indian tribe, including a 
                legal description of the land, for a period of not less 
                than 3 calendar years;
                    ``(B) a procedure for the effective disposal of--
                            ``(i) plants, whether growing or not, that 
                        are produced in violation of this subtitle; and
                            ``(ii) products derived from those plants;
                    ``(C) a procedure to comply with the enforcement 
                procedures under subsection (c)(2);
                    ``(D) a procedure for conducting annual inspections 
                of, at a minimum, a random sample of raw cannabis 
                producers to verify that raw cannabis is not produced 
                in violation of this subtitle; and
                    ``(E) such other practices or procedures as the 
                Secretary considers to be appropriate, to the extent 
                that the practice or procedure is consistent with this 
                subtitle.
    ``(b) Licensing.--The Secretary shall establish a procedure to 
issue licenses to raw cannabis producers in accordance with a plan 
established under subsection (a).
    ``(c) Violations.--
            ``(1) In general.--In the case of a State or Indian tribe 
        for which a State or Tribal plan is not approved under section 
        298B, it shall be unlawful to produce raw cannabis in that 
        State or the territory of that Indian tribe without a license 
        issued by the Secretary under subsection (b).
            ``(2) Negligent and other violations.--A violation of a 
        plan established under subsection (a) shall be subject to 
        enforcement in accordance with paragraphs (2) and (3) of 
        section 298B(d), except that the Secretary shall carry out that 
        enforcement instead of a State department of agriculture or 
        Tribal government.

``SEC. 298D. AUTHORITY TO ISSUE REGULATIONS AND GUIDELINES.

    ``(a) The Secretary shall have sole authority to issue Federal 
regulations and guidelines that relate to the production of raw 
cannabis, including Federal regulations and guidelines that relate to 
the implementation of section 298B.
    ``(b) No later than 90 days after enactment, the Secretary of 
Agriculture shall propose regulations implementing this Act.
    ``(c) Right of Action.--An adversely affected person or business 
shall have private right of action under the Administrative Procedure 
Act (5 U.S.C. 500 et seq.) and the Mandamus Act (28 U.S.C. 1361) to 
compel the Secretary or the designated officer, employee or agent of 
the Department of Agriculture to promulgate regulations or undertake 
and finalize rulemaking required under this Act that are not 
promulgated or published within the time frames set forth herein, or to 
act on applications for the permits or licenses herein required, within 
the time frames set forth herein, or to enjoin agency action. The 
exclusive venue for bringing any such action shall be the District 
Court for the District of Columbia. Upon demonstration of undue delay 
or failure to adhere strictly to statutory deadlines, or other 
violations of law and equity, equitable relief in the form of a writ of 
mandamus compelling action shall issue, among such other relief as the 
court may see fit.''.
    (b) Funding for Raw Cannabis Research.--
            (1) Supplemental and alternative crops.--Section 
        1473D(c)(3)(E) of the National Agricultural Research, 
        Extension, and Teaching Policy Act of 1977 (7 U.S.C. 
        3319d(c)(3)(E)) is amended by striking ``(including hemp (as 
        defined in section 297A of the Agricultural Marketing Act of 
        1946))'' and by inserting ``(including hemp and raw cannabis 
        (as defined in sections 297A and 298A of the Agricultural 
        Marketing Act of 1946, respectively))'' after ``material''.
            (2) Critical agricultural materials.--Section 5(b)(9) of 
        the Critical Agricultural Materials Act (7 U.S.C. 178c(b)(9)) 
        is amended by striking ``(including hemp (as defined in section 
        297A of the Agricultural Marketing Act of 1946))'' and by 
        inserting ``(including hemp and raw cannabis (as defined in 
        sections 297A and 298A of the Agricultural Marketing Act of 
        1946, respectively))'' after ``hydrocarbon-containing plants''.
    (c) Legitimacy of Raw Cannabis Research.--
            (1) In general.--Section 7606 of the Agricultural Act of 
        2014 (7 U.S.C. 5940) is amended--
                    (A) in subsection (b), by inserting ``or raw 
                cannabis'' after each appearance of ``hemp'' in 
                subsection (b); and
                    (B) by adding at the end the following:
    ``(d) Raw Cannabis Study and Report.--
            ``(1) In general.--The Secretary shall conduct a study of 
        agricultural pilot programs to determine the economic viability 
        of the domestic production and sale of raw cannabis.
            ``(2) Report.--Not later than 120 days after the date of 
        enactment of this subsection, the Secretary shall submit to 
        Congress a report describing the results of the study conducted 
        under paragraph (1).''.
    (d) Federal Crop Insurance.--
            (1) Definition of raw cannabis.--Section 502(b) of the 
        Federal Crop Insurance Act (7 U.S.C. 1502(b)) is amended--
                    (A) by redesignating paragraphs (10) through (14) 
                as paragraphs (11) through (15), respectively; and
                    (B) by inserting after paragraph (9) the following:
            ``(9) Raw cannabis.--The term `raw cannabis' has the 
        meaning given the term in section 298A of the Agricultural 
        Marketing Act of 1946.''.
            (2) Insurance period.--Section 508(a)(2) of the Federal 
        Crop Insurance Act (7 U.S.C. 1508(a)(2)) is amended by striking 
        ``sweet potatoes, and hemp'' and inserting ``sweet potatoes, 
        hemp, and raw cannabis''.
            (3) Submission of policies and materials to board.--Section 
        508(h) of the Federal Crop Insurance Act (7 U.S.C. 1508(h)) is 
        amended--
                    (A) in paragraph (1)(B)--
                            (i) by adding at the end the following:
                            ``(iii) Waiver for raw cannabis.--The 
                        Corporation may waive the viability and 
                        marketability requirement under clause (i)(I) 
                        in the case of a policy or pilot program 
                        relating to the production of raw cannabis.''; 
                        and
                    (B) in paragraph (3)(C)--
                            (i) by adding at the end the following:
    ``(v) in the case of reviewing policies and other materials 
relating to the production of raw cannabis, may waive the viability and 
marketability requirement under subparagraph (A)(ii)(I).''.
            (4) Agricultural commodity.--Section 518 of the Federal 
        Crop Insurance Act (7 U.S.C. 1518) is amended by inserting 
        ``raw cannabis,'' before ``aquacultural species''.
            (5) Research and development authority.--Section 522(b) of 
        the Federal Crop Insurance Act (7 U.S.C. 1522(b)) is amended--
                    (A) in paragraph (2), by adding at the end the 
                following:
                    ``(L) Waiver for raw cannabis.--The Board may waive 
                the viability and marketability requirements under this 
                paragraph in the case of research and development 
                relating to a policy to insure the production of raw 
                cannabis.''; and
                    (B) in paragraph (3)--
                            (i) by adding at the end the following:
                    ``(C) Waiver for raw cannabis.--The Corporation may 
                waive the marketability requirement under subparagraph 
                (A) in the case of research and development relating to 
                a policy to insure the production of raw cannabis.''.
    (e) Specialty Crop Block Grants.--Section 3 of the Specialty Crops 
Competitiveness Act of 2004 (7 U.S.C. 1621 note; Public Law 108-465) is 
amended in paragraph (1), by inserting ``hemp and raw cannabis (as 
defined in sections 297A and 298A of the Agricultural Marketing Act of 
1946, respectively)'' after ``horticulture'' and before ``and''.

SEC. 204. ADMINISTRATION LIKE ALCOHOL UNDER TAX AND TRADE BUREAU.

    (a) Addition of Cannabis to Certain Legal Authorities Relating to 
Intoxicating Liquors.--
            (1) Wilson act.--The Act of August 8, 1890 (commonly known 
        as the Wilson Act or the Original Packages Act; 27 U.S.C. 121), 
        is amended--
                    (A) by inserting ``, or cannabis,'' after 
                ``intoxicating liquors or liquids''; and
                    (B) by striking ``such liquids or liquors'' and 
                inserting ``such liquids, liquors, or cannabis''.
            (2) Webb-kenyon act.--The Act of March 1, 1913 (commonly 
        known as the Webb-Kenyon Act; 27 U.S.C. 122), is amended--
                    (A) by inserting ``cannabis or any'' after 
                ``whatsoever, of any'';
                    (B) by inserting ``cannabis or'' after ``which 
                said''; and
                    (C) by adding at the end of section 122b the 
                following new subsection:
    ``(c) Cannabis Regulation.--The Secretary of the Treasury, acting 
through the Alcohol and Tobacco Tax and Trade Bureau of the Department 
of the Treasury shall have primary authority regarding Federal 
regulation of the interstate and international trade in, and promotion, 
sale, and distribution of, cannabis products.
            ``(1) The Secretary shall, not later than 6 months after 
        the enactment of this Act, publish an interim final rule in 
        accordance with the Administrative Procedure Act (5 U.S.C. 500 
        et seq.) regarding the promotion, sale, and distribution of 
        cannabis products. No later than 9 months after the enactment 
        of this Act, the Secretary shall finalize and publish, as a 
        final rule, regulations regarding the promotion, sale, and 
        distribution of cannabis products.
            ``(2) The Secretary shall expeditiously develop and 
        implement a track-and-trace system for cannabis in interstate 
        commerce.
            ``(3) Not later than 1 year after the date of enactment of 
        this Act the Secretary shall publish an interim final rule, and 
        not later than 2 years after such date of enactment the 
        Secretary shall finalize regulations regarding the promotion, 
        sale, and distribution of cannabis products that occur through 
        means other than a direct, face-to-face exchange between a 
        retailer and a consumer, in order to prevent the sale and 
        distribution of cannabis products to individuals who have not 
        attained the age of 21, including requirements for age 
        verification.
    ``(d) Rule of Construction.--It is the intention of Congress that 
this Act be read consistently with the jurisprudence interpreting the 
Acts amended above and not as superseding or changing prior 
construction of the Acts with respect to the laws of the United States 
generally or the article I Commerce Clause.''.
            (3) Victims of trafficking and violence protection act of 
        2000.--Section 2 of the Victims of Trafficking and Violence 
        Protection Act of 2000 (27 U.S.C. 122a) is amended--
                    (A) in subsection (a)--
                            (i) by redesignating paragraphs (3) and (4) 
                        as paragraphs (4) and (5), respectively; and
                            (ii) by inserting after paragraph (2) the 
                        following new paragraph:
            ``(3) the term `marijuana' has the meaning given the term 
        `marihuana' in section 102 of the Controlled Substances Act (21 
        U.S.C. 802);''; and
                    (B) in subsections (b) and (c), by inserting ``or 
                marijuana'' after ``intoxicating liquor'' each place it 
                appears.

SEC. 205. TRANSFERRING AGENCY FUNCTIONS WITH REGARD TO MARIJUANA.

    (a) Transfer of Jurisdiction From Drug Enforcement Administration 
to Bureau of Alcohol, Tobacco, Firearms and Explosives.--The functions 
of the Attorney General, acting through the Administrator of the Drug 
Enforcement Administration relating to cannabis enforcement, shall 
hereafter be administered by the Attorney General, acting through the 
Director of the Bureau of Alcohol, Tobacco, Firearms and Explosives.
    (b) Redesignation of Bureau of Alcohol, Tobacco, Firearms and 
Explosives as Bureau of Alcohol, Tobacco, Cannabis, Firearms and 
Explosives.--
            (1) Redesignation.--The Bureau of Alcohol, Tobacco, 
        Firearms and Explosives is hereby renamed the ``Bureau of 
        Alcohol, Tobacco, Cannabis, Firearms and Explosives''.
            (2) References.--Any reference to the Bureau of Alcohol, 
        Tobacco, Firearms and Explosives in any law, regulation, map, 
        document, record, or other paper of the United States shall be 
        deemed to be a reference to the Bureau of Alcohol, Tobacco, 
        Cannabis, Firearms and Explosives.
    (c) Redesignation of Alcohol and Tobacco Tax and Trade Bureau as 
Alcohol, Tobacco, and Cannabis Tax and Trade Bureau.--
            (1) Redesignation.--Section 1111(d) of the Homeland 
        Security Act of 2002 (6 U.S.C. 531(d)) is amended by striking 
        ``Tax and Trade Bureau'' each place it appears and inserting 
        ``Alcohol, Tobacco, and Cannabis Tax and Trade Bureau''.
            (2) References.--Any reference to the Tax and Trade Bureau 
        or the Alcohol and Tobacco Tax and Trade Bureau in any law, 
        regulation, map, document, record, or other paper of the United 
        States shall be deemed to be a reference to the Alcohol, 
        Tobacco, and Cannabis Tax and Trade Bureau.

SEC. 206. TRANSITION SAFE HARBOR AND ADMINISTRATIVE REMEDIES.

    (a) Safe Harbor.--No person shall be deemed to be in violation of 
this Act for engaging in interstate commerce in cannabis products or 
designated State medical cannabis products, possessing cannabis 
products or designated State medical cannabis products, producing or 
manufacturing cannabis products or designated State medical cannabis 
products, or farming raw cannabis, until after the Secretary of the 
Treasury promulgates final regulations in accordance with this Act. 
Nothing in this section shall be construed to impact in any respect 
obligations of any person to comply with otherwise applicable cannabis 
laws of the State, Territory, or Possession of the United States in 
which they are doing business before the effective date of this Act.
    (b) Private Right of Action.--Any State-licensed cannabis business 
or adversely affected person shall have private right of action under 
the Administrative Procedure Act (5 U.S.C. 500 et seq.) and the 
Mandamus Act (28 U.S.C. 1361) to compel any officer, employee or agency 
of the United States to promulgate regulations required under this Act 
that are not promulgated within the time frames set forth herein or to 
enjoin agency action. The exclusive venue for bringing any such action 
shall be the District Court for the District of Columbia. Upon 
demonstration of undue delay or failure to adhere strictly to statutory 
deadlines, equitable relief in the form of a writ of mandamus 
compelling action shall issue, among such other relief as the court may 
see fit.
    (c) The term ``State'' as used in this section 206 includes the 
District of Columbia, Puerto Rico, and any commonwealth, territory, 
enclave, or Indian tribe of the United States.

SEC. 207. UNFAIR ADVERTISING PRACTICES AND 21 AGE LIMIT.

    (a) In General.--It shall be unlawful for any person engaged in the 
business of importing marijuana into the United States, or cultivating, 
producing, manufacturing, packaging, or warehousing marijuana, or 
purchasing marijuana for resale at wholesale, directly or indirectly or 
through an affiliate, to publish or disseminate or cause to be 
published or disseminated by radio broadcast, or in any newspaper, 
periodical or other publication or by any sign or outdoor advertisement 
or any other printed or graphic matter, any advertisement of marijuana, 
if such advertisement is in, or is calculated to induce sales in, 
interstate or foreign commerce, or is disseminated by mail, unless such 
advertisement is in conformity with such regulations, to be prescribed 
by the Secretary of the Treasury, or the Secretary's delegate (referred 
to in this section as the ``Secretary''), as will--
            (1) prevent deception of the consumer with respect to the 
        products advertised and as will prohibit, irrespective of 
        falsity, such statements relating to 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 information as to 
        the identity and quality of the products advertised, the 
        characteristics thereof, and the person responsible for the 
        advertisement;
            (3) prohibit statements that are disparaging of a 
        competitor's products or are false, misleading, obscene, or 
        indecent; and
            (4) prevent statements inconsistent with any statement on 
        the labeling of the products advertised.
    (b) Nonapplication to Publishers and Broadcasters.--The 
prohibitions of this section and regulations thereunder shall not apply 
to the publisher of any newspaper, periodical, or other publication, or 
radio broadcaster, or provider of an interactive computer service 
within the meaning of the Communications Decency Act (47 U.S.C. 230 et 
seq.), unless such publisher or radio broadcaster is engaged in the 
business of importing marijuana into the United States, or cultivating, 
producing, manufacturing, packaging, or warehousing marijuana, or 
purchasing marijuana for resale at wholesale, directly or indirectly or 
through an affiliate.
    (c) Protect Kids.--Not later than 60 days after the date of 
enactment of this Act, the Secretary of the Treasury 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 population of 
                individuals age 21 and under, including 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 products; 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.
    (d) National Minimum Cannabis Use Age of 21.--
            (1) Establishment of federal minimum cannabis age.--Chapter 
        1 of title 23 of the United States Code, is amended by adding 
        at the end the following--
    ``(a) Withholding of Funds for Noncompliance.--
            ``(1) In general.--
                    ``(A) 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 
                defined in 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 
                cannabis products, within the meaning of part J of 
                subchapter V of chapter 9 of title 21 of the United 
                States Code (the Federal Food, Drug, and Cosmetic Act), 
                by persons under the age of 21 on the recommendation or 
                prescription 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 following:

                         ``TITLE III--CANNABIS

``Sec. 301. Unlawful business without cannabis permit.
``Sec. 302. Procedure for issuance of cannabis permit.
``Sec. 304. Definitions.

``SEC. 301. UNLAWFUL BUSINESS WITHOUT CANNABIS PERMIT.

    ``In order to regulate effectively interstate and foreign 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 Secretary 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 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 `Secretary')--
            ``(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 unlawful, 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, manufactured, packaged, or warehoused.
    ``(d) Resale.--It shall be unlawful, except pursuant to a permit 
issued under this title by the Secretary--
            ``(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 indirectly 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 prosecution but instead to collect 
                a payment from the violator of no more than $500 for 
                that violation.
            ``(2) Civil action for relief.--The Attorney General may, 
        in a civil action, obtain appropriate relief to prevent and 
        restrain a violation of this title.

``SEC. 302. PROCEDURE FOR ISSUANCE OF CANNABIS PERMIT.

    ``(a) Who Entitled to Permit.--
            ``(1) Generally.--The Secretary shall issue a permit for 
        operations requiring a permit under Section 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 offense;
                    ``(B) the applicant is, by reason of business 
                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 purposes of 
        paragraph (1)--
                    ``(A) Generally.--Except as provided for in 
                subparagraph (B), a disqualifying offense is an offense 
                related to the production, consumption, 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 disqualifying 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;
                            ``(ii) is as of the date of the 
                        application, no longer an offense in that 
                        State; or
                            ``(iii) State second chances practices safe 
                        harbor.--A State has examined the offense or 
                        offenses in question, or is in the process of 
                        examining, for the issuance of a State license 
                        to engage in cannabis commerce, and has awarded 
                        the applicant a State license to engage in 
                        cannabis commerce.
            ``(3) Grandfathering and prospective comity for state 
        licensure.--
                    ``(A) Grandfathering.--Any person licensed by a 
                State cannabis regulatory authority before 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, licenses, or the like 
                to engage in federally regulated commerce upon 
                application for the same to the Alcohol and Tobacco Tax 
                and Trade Bureau of the Department of the Treasury.
                    ``(B) Prospective federal-state permit 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 
                engage in federally regulated commerce upon application 
                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 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 examination 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 Proceedings, as amended from time to time, 
shall be applicable 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 effective 
                date of this Act, and consistent with the Paperwork 
                Reduction Act, the manner and form of all applications 
                for permits under this title (including the facts to be 
                set forth therein);
                    ``(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 applicable 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.
            ``(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 Government. For the first 3 years following 
        promulgation 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.
                    ``(A) SBA fee waiver.--The Secretary shall waive 
                the user fee for an applicant that is a small business 
                or a socially and economically disadvantaged business 
                that is a business within the meaning of the Small 
                Business Act of 1953 (15 U.S.C. chapter 14A), as 
                interpreted by the Administrator of the Small Business 
                Administration.
    ``(e) Revocation, Suspension, and Annulment.--
            ``(1) Generally.--After due notice and opportunity 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 Secretary finds 
                that the permittee has willfully violated 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 Secretary with respect 
to any denial of application, suspension, 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 internal revenue or customs 
        officer authorized by the Secretary for the purpose; or
            ``(2) by mailing the order by registered mail, addressed to 
        the applicant or respondent at his or her 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 amended from time to time, shall be 
applicable to the jurisdiction, 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, revoked, or annulled as provided in 
        this title, or voluntarily surrendered.
            ``(2) Effect of transfer.--If operations under a permit 
        issued under this title are transferred, 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 period for a permit under this title for 
        those operations. If such an application is made, the 
        outstanding permit shall continue in effect until such 
        application is finally acted on by the Secretary.
            ``(3) Definition of transfer.--For the purposes of this 
        section, the term `transfer' means any 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 annulling, 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 his or 
        her principal place of business, or in the United States Court 
        of Appeals for the District of Columbia, within sixty 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 Secretary, 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 complained 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 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 additional 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 evidence to be taken before 
        the Secretary and to be adduced upon the hearing in such manner 
        and upon such terms and conditions as to the court may seem 
        proper. The Secretary may modify his or her findings as to the 
        facts by reason of the additional evidence so taken, and he or 
        she shall file with the court such modified or new findings, 
        which, if supported by substantial evidence, shall be 
        conclusive, and his or her recommendation, 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 certification 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 
        requirements of the Administrative Procedure Act (5 U.S.C. 500 
        et seq.). Should the permitee substantially prevail, such 
        permitee shall be entitled to attorneys' fees and costs 
        associated with compelling a decision under this section.
            ``(2) Additional applicant mandamus remedy.--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 permit pursuant to 28 U.S.C. 1361 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 applicants under the Administrative 
        Procedure Act.
    ``(j) Statute of Limitations.--
            ``(1) In general.--No proceeding for the suspension or 
        revocation of a permit for violation of any condition thereof 
        relating to compliance with Federal law shall be instituted by 
        the Secretary more than 18 months after conviction of the 
        violation of Federal law, or, if no conviction has been had, 
        more than 3 years after the violation occurred.
            ``(2) Compromise.--No permit shall be suspended or revoked 
        for a violation of any such condition thereof if the alleged 
        violation of Federal law has been compromised by any officer of 
        the Government authorized to compromise such violation.
    ``(k) Permit Application.--
            ``(1) In general.--Applications for permits to engage in 
        any of the operations set forth in this section must be made on 
        the required form. The application will include all data, 
        written statements, affidavits, documents, or other evidence 
        submitted in support of the application, or upon a hearing.
            ``(2) Confidentiality.--All financial information submitted 
        by a permit applicant in connection with an application shall 
        be deemed confidential business information and exempt from 
        disclosure under the Freedom of Information Act.
            ``(3) Incomplete or incorrectly executed applications.--
        Incomplete or incorrectly executed applications will not be 
        acted upon, but the applicant shall be entitled to file a new 
        application without prejudice, or to complete the application 
        already filed. The Secretary shall notify the applicant of such 
        defects in the application within 90 days of application or 
        within ten days of the discovery of the defect after the first 
        30 days following the filing of the application.
            ``(4) Change in ownership, management, or control of the 
        applicant.--In the event of any change in the ownership, 
        management, or control of the applicant (in case of a 
        corporation, any change in the officers, directors, or persons 
        holding more than 10 percent of the corporate stock), after the 
        date of filing of any application for a permit and prior to 
        final action on such application, the applicant shall notify 
        the appropriate officer immediately of such change.
            ``(5) Individual plant or premises.--An application for a 
        basic permit must be filed, and permit issued, to cover each 
        individual plant or premises where any of the businesses 
        specified in this section is engaged in.
            ``(6) Deadline.--Within 90 days of receipt of an 
        application, the Secretary or his or her designee must notify 
        the applicant whether the application has been approved or 
        denied. This 90-day period may be extended once, by an 
        additional 90 days, if the Secretary or his or her designee 
        finds that unusual circumstances require additional time to 
        consider the issues presented by an application. If the 
        Secretary or the appropriate designee extends the period, he or 
        she must notify the applicant by letter, along with a brief 
        explanation of the unusual circumstances causing the time 
        period for consideration of the application to be extended. If 
        the applicant receives no decision from the Secretary or his or 
        her designee within the time periods set forth in this 
        paragraph, the applicant may file a mandamus action as provided 
        for in this section.

``SEC. 304. DEFINITIONS.

    ``In this title--
            ``(1) the term `marijuana' or `cannabis' has the same 
        meaning given the term `marihuana' in section 102 of the 
        Controlled Substances Act (21 U.S.C. 121); and
            ``(2) the term `State' includes the District of Columbia, 
        Puerto Rico, and any commonwealth, territory, enclave, Indian 
        tribe, or possession of the United States.''.

    TITLE III--DESIGNATED STATE MEDICAL CANNABIS PRODUCT SAFETY ACT

SEC. 301. GRANDFATHERING OF STATE MEDICAL CANNABIS PRODUCTS INTO 
              INTERSTATE COMMERCE.

    Subchapter V of chapter 9 of title 21 of the United States Code 
(the Federal Food, Drug, and Cosmetic Act) is amended by adding at the 
end the following new part:

          ``PART J--DESIGNATED STATE MEDICAL CANNABIS PRODUCTS

``Sec. 360ggg. Definitions.
``Sec. 360ggg-1. Regulation of medical cannabis products.
``Sec. 360ggg-2. Cannabis-infused foods, beverages, and supplements.
``Sec. 360ggg-3. Cannabis cosmetics.
``Sec. 360ggg-4. Liability and method of payment.
``Sec. 360ggg-5. Private right of action and administrative remedy.

``SEC. 360GGG. DEFINITIONS.

    ``In this part:
            ``(1) The term `designated State medical cannabis 
        product'--
                    ``(A) means an article that is produced by a State 
                and federally licensed or permitted medical cannabis 
                business, pursuant to a State medical cannabis program 
                and contains `marihuana', as defined in section 102(16) 
                of the Controlled Substances Act;
                    ``(B) means any other article that contains either 
                `marihuana', as defined in section 102 of the 
                Controlled Substances Act, 21 U.S.C. 802, deemed 
                appropriate by the Secretary, after taking into account 
                any investigational new drug application or 
                investigational new animal drug application for the 
                same medical cannabis product submitted in accordance 
                with regulations applicable to such applications in 
                title 21 of the Code of Federal Regulations, unless any 
                period of exclusivity for a new drug under section 
                355(c)(3)(E)(ii) of this title or section 
                355(j)(5)(F)(ii) of this title, or the extension of any 
                such period under section 355a of this title, or any 
                period of exclusivity for a new animal drug under 
                section 360b(c)(2)(F) of this title, applicable to such 
                medical cannabis product has not expired;
                    ``(C) means any article that contains either 
                `marihuana', as defined in section 102(16) of the 
                Controlled Substances Act, 21 U.S.C. 802(16) that also 
                meets the standards set forth in an official 
                compendium; and
                    ``(D) does not mean articles or cannabis products 
                produced and intended for nonmedical use, such as those 
                regulated under title III of the Federal Alcohol 
                Administration Act (27 U.S.C. 201 et seq.).
            ``(2) The term `State' includes the District of Columbia, 
        Puerto Rico, and any commonwealth, territory, enclave, Indian 
        tribe, or possession of the United States.

``SEC. 360GGG-1. REGULATION OF MEDICAL CANNABIS PRODUCTS.

    ``(a) Medical Cannabis Regulation and Authority.--The Food and Drug 
Administration shall have jurisdiction over the regulation of 
designated State medical cannabis products described herein.
    ``(b) Certification of Designated State Medical Cannabis 
Products.--
            ``(1) Submission.--Beginning 30 days after the effective 
        date of this Act, any person who seeks to initially introduce 
        or deliver for introduction a designated State medical cannabis 
        product into interstate commerce may file with the Secretary a 
        request for certification as a designated State medical 
        cannabis product. Any such request shall contain the following 
        information:
                    ``(A) A description of the designated State medical 
                cannabis product.
                    ``(B) The name and address of the sponsor.
                    ``(C) The name and address of the facility or 
                facilities where the designated State medical cannabis 
                product is or will be cultivated and manufactured.
                    ``(D) Any other information deemed appropriate by 
                the Secretary to determine whether the designated State 
                medical cannabis product is in fact a designated State 
                medical cannabis product.
            ``(2) Grant of certification.--The certification requested 
        under paragraph (1) is deemed to be granted unless, within 30 
        days of the filing of such request, the Secretary finds that--
                    ``(A) the designated State medical cannabis product 
                subject to the certification is not in fact a 
                designated State medical cannabis product;
                    ``(B) the request does not contain the information 
                required under paragraph (1) or otherwise lacks 
                sufficient information to permit the Secretary to 
                determine that the designated State medical cannabis 
                product is in fact a designated State medical cannabis 
                product; or
                    ``(C) denying the request is necessary to protect 
                the public health.
            ``(3) Effect of certification.--
                    ``(A) In general.--
                            ``(i) Approved uses.--A designated State 
                        medical cannabis product for which a 
                        certification is granted under paragraph (2) is 
                        deemed, alone or in combination, as medically 
                        appropriate, with another designated State 
                        medical cannabis product or products for which 
                        a certification or certifications have been 
                        granted, to be sold in interstate commerce as a 
                        non-drug designated State medical cannabis 
                        product, for the following indications for use:
                                    ``(I) The treatment of arthritis.
                                    ``(II) The treatment of 
                                chemotherapy-induced and non-
                                chemotherapy-induced nausea and 
                                vomiting.
                                    ``(III) The stimulation of 
                                appetite.
                                    ``(IV) The treatment of the 
                                symptoms of patients with HIV/AIDS or 
                                for anorexia associated with AIDS.
                                    ``(V) The treatment of temporary or 
                                chronic pain and analgesia.
                                    ``(VI) The treatment of muscle 
                                spasms.
                                    ``(VII) The treatment of insomnia 
                                and restlessness.
                                    ``(VIII) The treatment of post-
                                traumatic stress disorder.
                                    ``(IX) The treatment of chronic 
                                pain due to sickle cell disease.
                                    ``(X) Any other indication for use 
                                consistent with State medical cannabis 
                                law and medical cannabis labeling 
                                practice in the State in which the 
                                product is to be sold to the end 
                                consumer.
                                    ``(XI) Any other indication for use 
                                for a designated State medical cannabis 
                                product or combination of designated 
                                State medical cannabis products deemed 
                                appropriate by the Secretary, unless 
                                any period of exclusivity for a new 
                                drug under clause (iii) or (iv) of 
                                section 355(c)(3)(E) of this title, 
                                clause (iii) or (iv) of section 
                                355(j)(5)(F) of this title, or section 
                                360cc of this title, or the extension 
                                of any such period under section 355a 
                                of this title, applicable to such 
                                indication for use for such medical 
                                cannabis product or combination of 
                                products has not expired.
                            ``(ii) Labeling.--The requirements of 
                        sections 353(b)(4) and 352(f) of this title are 
                        deemed to have been met for a designated State 
                        medical cannabis product if the labeling on the 
                        final use container for such medical cannabis 
                        product bears--
                                    ``(I) the information required by 
                                section 353(b)(4) of this title;
                                    ``(II) a warning statement 
                                concerning the use of the medical 
                                cannabis products as determined by the 
                                Secretary by regulation; and
                                    ``(III) appropriate directions and 
                                warnings concerning storage and 
                                handling.
                    ``(B) Inapplicability of exclusivity provisions.--
                            ``(i) No exclusivity for a certified 
                        medical cannabis product. No designated State 
                        medical cannabis product deemed under 
                        subparagraph (A)(i) to have in effect an 
                        approved application is eligible for any period 
                        of exclusivity for a new drug under section 
                        355(c), 355(j), or 360cc of this title, or the 
                        extension of any such period under section 355a 
                        of this title, on the basis of such deemed 
                        approval.
                            ``(ii) Effect on certification.--No period 
                        of exclusivity under section 355(c), 355(j), or 
                        section 360cc of this title, or the extension 
                        of any such period under section 355a of this 
                        title, with respect to an application for a 
                        drug product, shall prohibit, limit, or 
                        otherwise affect the submission, grant, or 
                        effect of a certification under this section, 
                        except as provided in subsection 
                        (a)(3)(A)(i)(VIII) and section 360ddd(1)(H) of 
                        this title.
            ``(4) Withdrawal, suspension, or revocation of approval.--
                    ``(A) Withdrawal, suspension of approval.--Nothing 
                in this part limits the Secretary's authority to 
                withdraw or suspend approval of a drug product, 
                including a designated State medical cannabis product 
                deemed under this section to have in effect an approved 
                application under section 355 of this title or section 
                360b of this title.
                    ``(B) Revocation of certification.--The Secretary 
                may revoke the grant of a certification under paragraph 
                (2) if the Secretary determines that the request for 
                certification contains any material omission or 
                falsification.
            ``(5) Prescription or recommendation requirement for 
        designated state medical cannabis products.--
                    ``(A) In general.--A designated State medical 
                cannabis product is not approved for use without a 
                prescription by a qualified medical professional or a 
                recommendation by a qualified medical professional as 
                defined by the law of the State in which the qualified 
                medical professional is providing said prescription or 
                recommendation.
                    ``(B) Labeling.--For medical cannabis products 
                provided pursuant to subparagraph (A), the Secretary 
                shall issue labeling requirements within 90 days of the 
                passage of this Act.
            ``(6) No drug preclusion.--Notwithstanding any other law, 
        21 U.S.C. 331(ll), the `drug preclusion' rule, shall not apply 
        to `marihuana', as defined in 21 U.S.C. 802(16). 
        Notwithstanding any other Federal law or provision of the 
        Federal Food, Drug, and Cosmetic Act, the Food and Drug 
        Administration shall treat cannabis without respect to the 
        doctrine of drug preclusion. Nothing in this provision is meant 
        to diminish or otherwise affect the ability of the Food and 
        Drug Administration to regulate drug products (as defined in 21 
        U.S.C. 321(g)), including those containing `marihuana', (as 
        defined in 21 U.S.C. 802(16)) that are intended and marketed 
        for use as a `drug' rather than a `designated State medical 
        cannabis product'.
            ``(7) Timeline for rulemaking to effectuate provision.--
        Within 30 days of the passage of this Act, the Food and Drug 
        Administration shall promulgate an interim final rule and 
        undertake rulemaking under the Administrative Procedure Act (5 
        U.S.C. 500 et seq.) for the purposes of effectuating this 
        provision, including any forms that may be required for 
        application for certification. Such final rule shall be 
        promulgated within 90 days of the publication of the interim 
        final rule.

``SEC. 360GGG-2. CANNABIS-INFUSED FOODS, BEVERAGES, AND SUPPLEMENTS.

    ``(a) No Supplement/Additive Preclusion.--Notwithstanding any other 
law, 21 U.S.C. 321(s)(6) shall not apply to `marihuana', as defined in 
21 U.S.C. 802(16), nor to `industrial hemp', as defined in 7 U.S.C. 
5490(a)(2). Notwithstanding any other Federal law or provision of the 
Federal Food, Drug, and Cosmetic Act, the Food and Drug Administration 
shall treat cannabis without respect to the doctrine of dietary 
supplement and food additive preclusion.
    ``(b) Cannabis-Infused Dietary Supplements; Classification as Old 
Dietary Ingredient.--Notwithstanding any other law, `marihuana', as 
defined in 21 U.S.C. 802(16), and `industrial hemp', as defined in 7 
U.S.C. 5490(a)(2), shall be deemed to have been marketed in the United 
States as a dietary ingredient before October 15, 1994 for the purposes 
of 21 U.S.C. 350b(a), 350b(d).
            ``(1) Within 30 days of the passage of this Act, the Food 
        and Drug Administration shall promulgate an interim final rule 
        and undertake rulemaking under the Administrative Procedure Act 
        (5 U.S.C. 500 et seq.) for the purposes of establishing a 
        standard serving size and further clarifying intended 
        conditions of use of whole-plant cannabis extracts and 
        individual cannabinoid extracts used as dietary supplements.
            ``(2) Such final rule shall be promulgated within 90 days 
        of the publication of the interim final rule.
    ``(c) Cannabis-Infused Foods and Beverages; Classification as 
Generally Safe Through Common Experience.--Notwithstanding any other 
law, `marihuana', as defined in 21 U.S.C. 802(16), or `industrial 
hemp', as defined in 7 U.S.C. 5490(a)(2), shall be deemed to be 
generally recognized as safe through experience based on common use in 
food prior to January 1, 1958, for the purposes of 21 U.S.C. 321(s) and 
21 CFR 170.30(a). Cannabis-infused foods and beverages, unless a 
designated State medical cannabis product, shall be considered as 
regulated under title III of the Federal Alcohol Administration Act (27 
U.S.C. 201 et seq.).
            ``(1) Within 30 days of the passage of this Act, the Food 
        and Drug Administration shall promulgate an interim final rule 
        and undertake rulemaking under the Administrative Procedure Act 
        (5 U.S.C. 500 et seq.) for the purposes of establishing a 
        standard serving size and further clarifying conditions of 
        intended use of whole-plant cannabis extracts and individual 
        cannabinoid extracts used as food additives.
            ``(2) Such final rule shall be promulgated within 90 days 
        of the publication of the interim final rule.

``SEC. 360GGG-3. CANNABIS COSMETICS.

    ``(a) Cannabis Allowed in Cosmetics, `Safe'.--The use of 
`marihuana', as defined in 21 U.S.C. 802(16), and `industrial hemp', as 
defined in 7 U.S.C. 5490(a)(2), alone in cosmetic products shall not 
cause a cosmetic to be adulterated within the meaning of 21 U.S.C. 
361(a)-(e) provided that it is properly labeled and branded within the 
meaning of title 21, chapter 6 of the United States Code generally.
            ``(1) Within 30 days of the passage of this Act, the Food 
        and Drug Administration shall promulgate an interim final rule 
        and undertake rulemaking under the Administrative Procedure Act 
        (5 U.S.C. 500 et seq.) to effectuate this provision.
            ``(2) Such final rule shall be promulgated within 90 days 
        of the publication of the interim final rule.
    ``(b) Rule of Construction.--Notwithstanding section 360ggg-3(a) of 
this title, any cosmetic containing `marihuana', as defined in 21 
U.S.C. 802(16), and `industrial hemp', as defined in 7 U.S.C. 
5490(a)(2), including any extract thereof, where the cannabis component 
actually renders it a poisonous or deleterious substance, injurious to 
users under the conditions of use prescribed in the labeling thereof, 
or under such conditions of use as are customary or usual, may be 
considered adulterated within the meaning of 21 U.S.C. 361 and/or 
misbranded under 21 U.S.C. 362.

``SEC. 360GGG-4. LIABILITY AND METHOD OF PAYMENT.

    ``A designated State medical cannabis product, alone or in 
combination with another designated State medical cannabis product or 
products (as medically appropriate) deemed under section 360ggg-1 of 
this title to have in effect an approved application shall not be 
assessed fees under section 379h(a) or 379j-12(a) of this title on the 
basis of such deemed approval.

``SEC. 360GGG-5. PRIVATE RIGHT OF ACTION AND ADMINISTRATIVE REMEDY.

    ``(a) Right of Action.--An adversely affected person or business 
shall have private right of action under the Administrative Procedure 
Act (5 U.S.C. 500 et seq.) and the Mandamus Act (28 U.S.C. 1361) to 
compel the Administrator or any other officer, employee or agent of the 
Food and Drug Administration to promulgate regulations or undertake and 
finalize rulemaking required under this Act that are not promulgated or 
published within the time frames set forth herein, or to provide the 
certification of designated State medical cannabis products within the 
time frames set forth herein, or to enjoin agency action. The exclusive 
venue for bringing any such action shall be the District Court for the 
District of Columbia. Upon demonstration of undue delay or failure to 
adhere strictly to statutory deadlines, or other violations of law and 
equity, equitable relief in the form of a writ of mandamus compelling 
action shall issue, among such other relief as the court may see 
fit.''.

           TITLE IV--SMALL BUSINESS ADMINISTRATION PROVISIONS

SEC. 401. FAIR SMALL BUSINESS ADMINISTRATION ACCESS.

    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:
            ``(36) Loans to cannabis-related legitimate businesses and 
        service providers.--
                    ``(A) In general.--The Administrator may not 
                decline to provide a guarantee for a loan under this 
                subsection to an otherwise eligible small business 
                concern solely because such concern is a cannabis-
                related legitimate business or service provider.
                    ``(B) Definitions.--In this paragraph:
                            ``(i) Cannabis.--The term `cannabis' has 
                        the meaning given the term `marihuana' in 
                        section 102 of the Controlled Substances Act.
                            ``(ii) Cannabis product.--The term 
                        `cannabis product' means any article that 
                        contains cannabis, including an article that is 
                        a designated State medical cannabis product 
                        within the meaning of part J of subchapter V of 
                        chapter 9 of title 21 of the United States Code 
                        (the Federal Food, Drug, and Cosmetic Act).
                            ``(iii) Cannabis-related legitimate 
                        business.--The term `cannabis-related 
                        legitimate business' means a cannabis farmer, 
                        cannabis producer, or any person or company 
                        that is a small business concern and that--
                                    ``(I) engages in any activity 
                                described in subclause (II) pursuant to 
                                a law established by a State or a 
                                political subdivision of a State, as 
                                determined by such State or political 
                                subdivision; and
                                    ``(II) participates in any business 
                                or organized activity that involves 
                                handling cannabis or cannabis products, 
                                including cultivating, producing, 
                                manufacturing, selling, transporting, 
                                displaying, dispensing, retailing, 
                                wholesaling, distributing, or 
                                purchasing cannabis or cannabis 
                                products.
                            ``(iv) Cannabis producer.--The term 
                        `cannabis producer' means a person who 
                        manufactures, compounds, converts, processes, 
                        prepares, or packages cannabis or cannabis 
                        products.
                            ``(v) Cannabis farmer.--The term `cannabis 
                        farmer' means a person who plants, cultivates, 
                        harvests, or in any way facilitates the natural 
                        growth of cannabis.
                            ``(vi) Service provider.--The term `service 
                        provider'--
                                    ``(I) means a business, 
                                organization, or other person that--
                                            ``(aa) sells goods or 
                                        services to a cannabis-related 
                                        legitimate business; or
                                            ``(bb) provides any 
                                        business services, including 
                                        the sale or lease of real or 
                                        any other property, legal or 
                                        other licensed services, or any 
                                        other ancillary service, 
                                        relating to cannabis; and
                                    ``(II) does not include a business, 
                                organization, or other person that 
                                participates in any business or 
                                organized activity that involves 
                                handling cannabis or cannabis products, 
                                including cultivating, producing, 
                                manufacturing, selling, transporting, 
                                displaying, dispensing, retailing, 
                                wholesaling, distributing, or 
                                purchasing cannabis or cannabis 
                                products.
                            ``(vii) State.--The term `State' means each 
                        of the several States, the District of 
                        Columbia, Puerto Rico, and any territory or 
                        possession of the United States.''.

SEC. 402. DISASTER LOAN NONDISCRIMINATION.

    Section 7(b) of the Small Business Act (15 U.S.C. 636(b)) is 
amended by inserting after paragraph (15) the following new paragraph:
            ``(16) Assistance to cannabis-related legitimate businesses 
        and service providers.--The Administrator may not decline to 
        provide assistance under this subsection to an otherwise 
        eligible borrower solely because such borrower is a cannabis-
        related legitimate business or service provider (as defined in 
        subsection (a)(36)).''.

SEC. 403. MICROLOAN NONDISCRIMINATION.

    Section 7(m) of the Small Business Act (15 U.S.C. 636(m)(13)) is 
amended by adding at the end the following new paragraph:
            ``(14) Assistance to cannabis-related legitimate businesses 
        and service providers.--An eligible intermediary may not 
        decline to provide assistance under this subsection to an 
        otherwise eligible borrower solely because such borrower is a 
        cannabis-related legitimate business or service provider (as 
        defined in subsection (a)(36)).''.

SEC. 404. SMALL BUSINESS INVESTMENT COMPANY DEBENTURE 
              NONDISCRIMINATION.

    Part A of title III 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. 321. DEBENTURES TO FINANCE CANNABIS-RELATED BUSINESSES AND 
              SERVICE PROVIDERS.

    ``(a) Guarantees.--The Administrator may not decline to purchase or 
guarantee a debenture made under this title to an otherwise eligible 
small business investment company solely because such small business 
investment company provides financing to an entity that is a cannabis-
related legitimate business or service provider (as defined in section 
7(a)(38) of the Small Business Act).
    ``(b) Other Assistance.--A small business investment company may 
not decline to provide assistance under this title to an otherwise 
eligible small business solely because such business is a cannabis-
related legitimate business or service provider (as defined in section 
7(a)(38) of the Small Business Act).''.

SEC. 405. STATE OR LOCAL DEVELOPMENT LOAN NON-DISCRIMINATION.

    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 CANNABIS-RELATED LEGITIMATE BUSINESSES AND SERVICE 
              PROVIDERS.

    ``The Administrator may not decline to provide a guarantee for a 
loan under this title to an otherwise eligible State or local 
development company solely because such State or local development 
company provides financing to an entity that is a cannabis-related 
legitimate business or service provider (as defined in section 7(a)(36) 
of the Small Business Act).''.

SEC. 406. RULEMAKING AND DISBURSEMENT.

    Not later than 30 days after the date of the enactment of this Act, 
the Administrator of the Small Business Administration shall issue or 
amend any rules or interim final rules, standard operating procedures, 
other legal or policy guidance necessary to carry out the requirements 
of this Act and the amendments made by this Act. The Administrator 
shall begin incurring obligations and disbursing funds made available 
to the Administration for the purposes of carrying out this Act within 
45 days of the enactment of this Act.

SEC. 407. ADMINISTRATIVE PROCEDURE ACT AND MANDAMUS REMEDIES.

    Should the Administrator fail to issue or amend any rules or 
interim final rules, standard operating procedures, other legal or 
policy guidance necessary to carry out the requirements of this Act and 
the amendments made by this Act within the 30 days described above, or 
fail to make an application decision within thirty days of submission 
of a completed application, an applicant shall have the right to compel 
action under the Administrative Procedure Act (5 U.S.C. 500 et seq.) 
and the Mandamus Act (28 U.S.C. 1361), 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 issue upon demonstration of 
failure to meet deadlines described herein.

               TITLE V--IMPOSITION OF CANNABIS EXCISE TAX

SEC. 501. LAW ENFORCEMENT RETRAINING AND SUCCESSFUL SECOND CHANCES 
              FUND.

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

``SEC. 9512. LAW ENFORCEMENT RETRAINING AND SUCCESSFUL SECOND CHANCES 
              FUND.

    ``(a) Creation of Law Enforcement Retraining and Successful Second 
Chances Fund.--There is established in the Treasury of the United 
States a fund to be known as the `Law Enforcement Retraining and 
Successful Second Chances Fund' (referred to in this section as the 
`Law Enforcement and Second Chances Fund'), consisting of such amounts 
as may be appropriated or credited to such a fund as provided in this 
section or section 9602(b).
    ``(b) Authorization of Appropriations.--To carry out this section, 
there are authorized to be appropriated to the Law Enforcement and 
Second Chances Fund such sums as may be necessary to carry out the 
purposes of this subchapter for fiscal year 2022, to remain available 
until expended.
    ``(c) Future Fiscal Years.--For the ten (10) fiscal years following 
fiscal year 2022, there is authorized to be appropriated to the Law 
Enforcement and Second Chances Fund such sums as may be necessary to 
carry out the purposes of this subchapter.
    ``(d) Availability of Law Enforcement and Second Chances Fund.--
Amounts in the Law Enforcement and Second Chances Fund shall be 
available, until expended, as provided under this section.
    ``(e) Set-Asides.--
            ``(1) Crisis stabilization and community reentry grant 
        program.--Of the amounts in the Law Enforcement and Second 
        Chances Fund--
                    ``(A) 10% shall be set aside for grants made under 
                section 3052(a) of part OO of the Omnibus Crime Control 
                and Safe Streets Act of 1968; and
                    ``(B) 10% shall be set aside for grants made under 
                section 3052(b) of part OO of the Omnibus Crime Control 
                and Safe Streets Act of 1968.
            ``(2) Edward byrne memorial justice assistance grant 
        program.--Of the amounts in the Law Enforcement and Second 
        Chances Fund, 10% shall be set aside for grants made under part 
        A of title 34 of the United States Code.
            ``(3) Community-oriented policing services hiring 
        program.--Of the amounts in the Law Enforcement and Second 
        Chances Fund, 10% shall be set aside for activities authorized 
        by the Violent Crime Control and Law Enforcement Act of 1994 
        (Public Law 103-322); the Omnibus Crime Control and Safe 
        Streets Act of 1968 (`the 1968 Act'); and the Violence Against 
        Women and Department of Justice Reauthorization Act of 2005 
        (Public Law 109-162) (`the 2005 Act'). No less than 5% of this 
        set-aside shall be directed towards grants made under section 
        1701 of title I of the 1968 Act (42 U.S.C. 3796dd) for the 
        hiring and rehiring of additional career law enforcement 
        officers under part Q of such title notwithstanding subsection 
        (i) of such section.
            ``(4) Successful second chances program.--Of the amounts in 
        the Law Enforcement and Second Chances Fund, 30% shall be set 
        aside for the Small Business Administrator to carry out the 
        provisions of title IV of the States Reform Act.
            ``(5) Veterans mental health funding.--Of the amounts in 
        the Law Enforcement and Second Chances Fund, 10% shall be set 
        aside for the Secretary of the Veterans Affairs to carry out 
        the provisions of title 38 of the United States Code, section 
        1720I(a) and 1720I(c).
            ``(6) State response to opioid addiction funding.--Of the 
        amounts in the Law Enforcement and Second Chances Fund, 5% 
        shall be set aside for the Secretary of Health and Human 
        Services to carry out the provisions of title 42 of the United 
        States Code, section 290ee-3.
            ``(7) Underage youth use prevention funding.--Of the 
        amounts in the Law Enforcement and Second Chances Fund, 5% 
        shall be set aside for the Assistant Secretary for Mental 
        Health and Substance Use of the Substance Abuse and Mental 
        Health Services Administration to help prevent underage 
        cannabis use in carrying out the provisions of title 42 of the 
        United States Code.
    ``(f) Allotment.--All funds for carrying out the provisions of this 
chapter shall be available for allotment to bureaus and offices of the 
Department of Justice and the Small Business Administration, and for 
transfer to such other agencies of the Federal Government, and to such 
State agencies, as the Secretary of the Treasury may request to 
cooperate or assist in carrying out the provisions of this chapter.''.

SEC. 502. CANNABIS REVENUE AND REGULATION ACT.

    Subtitle E of title I of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new chapter:

                    ``CHAPTER 56--CANNABIS PRODUCTS

                   ``subchapter a--imposition of tax

``Sec. 5901. Imposition of tax.
``Sec. 5902. Definitions.
``Sec. 5903. Liability and method of payment.
``Sec. 5904. Exemption from tax.
``Sec. 5905. Credit, refund, or drawback of tax.
                       ``subchapter b--operations

``Sec. 5911. Inventories, reports, and records.
``Sec. 5912. Packaging and labeling.
``Sec. 5913. Purchase, receipt, possession, or sale of cannabis 
                            products after removal.
``Sec. 5914. Restrictions relating to marks, labels, notices, and 
                            packages.
``Sec. 5915. Restriction on importation of previously exported cannabis 
                            products.
                       ``subchapter c--penalties

``Sec. 5921. Civil penalties.

                   ``Subchapter A--Imposition of Tax

``SEC. 5901. IMPOSITION OF TAX.

    ``(a) Imposition of Excise Tax.--There is hereby imposed on any 
cannabis product produced in or imported into the United States a tax 
equal to 3% percent of the removal price of such a cannabis product 
sold in the United States during the 12-month period ending one 
calendar quarter before such calendar year.
    ``(b) Moratorium on Cannabis Product Excise Tax Increases.--There 
is hereby imposed, notwithstanding any other law, including, but not 
limited to the Congressional Budget and Impoundment Control Act of 1974 
(Public Law 93-344, 88 Stat. 297, 2 U.S.C. 601-688), for the ten 
calendar years following the passage of this Act, a moratorium on 
increasing the excise tax imposed on cannabis products by this section 
5901.
            ``(1) Such moratorium may be waived before the ten-year 
        timeframe by a three-quarters vote to do so by both Houses of 
        Congress.
    ``(c) Removal Price Categories.--
            ``(1) In general.--For the purposes of subsection (a), the 
        Secretary shall impose the tax on the removal price--
                    ``(A) per 454 grams of cannabis flower,
                    ``(B) per 100 grams of cannabis pre-rolls,
                    ``(C) per 20 grams of cannabis extracts,
                    ``(D) per 10 grams of cannabis vaporizer 
                cartridges,
                    ``(E) of 20 units of edible cannabis product, and
                    ``(F) of 20 units of cannabis topical or cosmetic 
                product.
            ``(2) New removal price categories and basis.--For the 
        purposes of subsection (c), the Secretary may, under the 
        processes of the Administrative Procedure Act (5 U.S.C. 500 et 
        seq.), undertake formal rulemaking to establish new removal 
        price categories and bases for cannabis products that are not 
        covered under subsection (c)(1).
            ``(3) Clarifying rulemaking.--The Secretary may, consistent 
        with the Administrative Procedure Act (5 U.S.C. 500 et seq.), 
        further clarify the application of subsection (c)(1).
    ``(d) Time of Attachment on Cannabis Products.--The tax under this 
section shall attach to any cannabis product as soon as such product is 
in existence as such, whether it be subsequently separated or 
transferred into any other substance, either in the process of original 
production or by any subsequent process. Raw cannabis not yet delivered 
to a producer for processing, manufacturing, or production shall not be 
considered a product in existence for the purposes of this subsection 
(d).

``SEC. 5902. DEFINITIONS.

    ``(a) Definitions Related to Cannabis Products.--For purposes of 
this chapter:
            ``(1) Cannabis product.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `cannabis product' means any 
                article that contains or consists of cannabis.
                    ``(B) Exceptions.--The term `cannabis product' does 
                not include an FDA-approved article, industrial hemp, 
                or the unproduced, raw agricultural commodity of 
                cannabis.
            ``(2) FDA-approved article.--The term `FDA-approved 
        article' means any article if the producer or importer thereof 
        demonstrates to the satisfaction of the Secretary of Health and 
        Human Services that such article is--
                    ``(A) a drug--
                            ``(i) that is approved under section 505 of 
                        the Federal Food, Drug, and Cosmetic Act or 
                        licensed under section 351 of the Public Health 
                        Service Act,
                            ``(ii) for which an investigational use 
                        exemption has been authorized under section 
                        505(i) of the Federal Food, Drug, and Cosmetic 
                        Act or under section 351(a) of the Public 
                        Health Service Act,
                    ``(B) a combination product (as described in 
                section 503(g) of the Federal Food, Drug, and Cosmetic 
                Act), the constituent parts of which were approved or 
                cleared under section 505, 510(k), or 515 of such Act, 
                or
                    ``(C) a `designated State medical cannabis product' 
                within the meaning of part J of subchapter V of chapter 
                9 of title 21 of the United States Code (the Federal 
                Food, Drug, and Cosmetic Act).
            ``(3) Cannabis.--The term `cannabis' has the same meaning 
        given to the term `marihuana' under section 102(16) of the 
        Controlled Substances Act, 21 U.S.C. 802(16).
            ``(4) Industrial hemp.--The term `industrial hemp' has the 
        same meaning given to the term `industrial hemp' in section 
        297A of the Agricultural Marketing Act of 1946 (7 U.S.C. 1621 
        et seq.) (codified at 7 U.S.C. 5940(b)(2)).
    ``(b) Definitions Related to Cannabis Businesses and Producers.--
For purposes of this chapter:
            ``(1) Cannabis business.--The term `cannabis business' 
        means a producer, importer, or export warehouse proprietor.
            ``(2) Producer.--
                    ``(A) In general.--The term `producer' means any 
                person who manufactures, produces, compounds, converts, 
                processes, prepares, or packages any cannabis product.
                    ``(B) Personal use exception.--Subject to 
                regulation prescribed by the Secretary, the term 
                `producer' shall not include any individual otherwise 
                described in subparagraph (A) if the only cannabis 
                product described in such subparagraph with respect to 
                such individual is for personal or family use and not 
                for sale.
                    ``(C) Cannabis farmers not producers.--A producer 
                does not mean a person who plants, cultivates, 
                harvests, grows the raw agricultural commodity of 
                cannabis not yet finished into a produced article for 
                consumption. This provision shall not be constructed as 
                precluding a cannabis farmer from also being a cannabis 
                producer within the same enterprise.
            ``(3) Importer.--The term `importer' means any person who--
                    ``(A) is in the United States and to whom non-tax-
                paid cannabis products, produced in a foreign country 
                or a possession of the United States, are shipped or 
                consigned,
                    ``(B) removes cannabis products for sale or 
                consumption in the United States from a customs 
                warehouse, or
                    ``(C) smuggles or otherwise unlawfully brings any 
                cannabis product into the United States.
            ``(4) Export warehouse proprietor.--
                    ``(A) In general.--The term `export warehouse 
                proprietor' means any person who operates an export 
                warehouse.
                    ``(B) Export warehouse.--The term `export 
                warehouse' means an internal revenue warehouse for the 
                storage of cannabis products, upon which the internal 
                revenue tax has not been paid--
                            ``(i) for subsequent shipment to a foreign 
                        country or a possession of the United States, 
                        or
                            ``(ii) for consumption beyond the 
                        jurisdiction of the internal revenue laws of 
                        the United States.
            ``(5) Cannabis production facility.--The term `cannabis 
        production facility' means an establishment that is qualified 
        under subchapter C to perform any operation for which such 
        qualification is required under such subchapter.
    ``(c) Other Definitions.--For purposes of this chapter--
            ``(1) Produce.--The term `produce' includes any activity 
        described in subsection (b)(2)(A).
            ``(2) Removal; remove.--The terms `removal' or `remove' 
        mean--
                    ``(A) the transfer of cannabis products from the 
                premises of a producer (or the transfer of such 
                products from the premises of a producer to the 
                premises of such producer),
                    ``(B) release of such products from customs 
                custody, or
                    ``(C) smuggling or other unlawful importation of 
                such products into the United States.
            ``(3) Removal price.--The term `removal price' means--
                    ``(A) except as otherwise provided in this 
                paragraph, the price for which the cannabis product is 
                sold in the sale that occurs in connection with the 
                removal of such product,
                    ``(B) in the case of any such sale that is 
                described in section 5903(c), the price determined 
                under such section, and
                    ``(C) if there is no sale that occurs in connection 
                with such removal, the price that would be determined 
                under section 5903(c) if such product were sold at a 
                price that cannot be determined.

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

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

``SEC. 5904. EXEMPTION FROM TAX.

    ``(a) Exemption From Tax.--Cannabis products on which the internal 
revenue tax has not been paid or determined may, subject to such 
regulations as the Secretary shall prescribe, be withdrawn from the 
premises of any producer in approved containers free of tax and not for 
resale for use--
            ``(1) exclusively in scientific research by a laboratory,
            ``(2) by a proprietor of a cannabis production facility in 
        research, development, or testing (other than consumer testing 
        or other market analysis) of processes, systems, materials, or 
        equipment, relating to cannabis or cannabis operations, under 
        such limitations and conditions as to quantities, use, and 
        accountability as the Secretary may by regulations require for 
        the protection of the revenue,
            ``(3) by the United States or any governmental agency 
        thereof, any State, any political subdivision of a State, or 
        the District of Columbia, for nonconsumption purposes, or
            ``(4) by a qualified State medical cannabis patient or 
        patients, when the cannabis product is 100% donated to the 
        patient or patients, and such a donated article otherwise 
        qualifies for use as a `designated State medical cannabis 
        product' within the meaning of the Federal Food, Drug, and 
        Cosmetic Act, section 360ggg, part J of subchapter V of chapter 
        9 of title 21 of the United States Code.
    ``(b) Cannabis Products Transferred or Removed From Domestic 
Factories and Export Warehouses.--
            ``(1) In general.--Subject to such regulations as the 
        Secretary shall prescribe, a producer or export warehouse 
        proprietor may transfer cannabis products, without payment of 
        tax, to the premises of another producer or export warehouse 
        proprietor, or remove such articles, without payment of tax, 
        for shipment to a foreign country, Puerto Rico, the Virgin 
        Islands, or a possession of the United States, or for 
        consumption beyond the jurisdiction of the internal revenue 
        laws of the United States.
            ``(2) Labeling.--Cannabis products may not be transferred 
        or removed under this subsection unless such products bear such 
        marks, labels, or notices as the Secretary shall by regulations 
        prescribe.
    ``(c) Cannabis Products Released From Customs Custody.--Cannabis 
products imported or brought into the United States may be released 
from customs custody, without payment of tax, for delivery to a 
producer or export warehouse proprietor if such articles are not put up 
in packages, in accordance with such regulations as the Secretary shall 
prescribe.
    ``(d) Cannabis Products Exported and Returned.--Cannabis products 
classifiable under item 9801.00.10 of the Harmonized Tariff Schedule of 
the United States (relating to duty on certain articles previously 
exported and returned), as in effect on the date of the enactment of 
the States Reform Act, may be released from customs custody, without 
payment of that part of the duty attributable to the internal revenue 
tax for delivery to the original producer of such cannabis products or 
to the export warehouse proprietor authorized by such producer to 
receive such products, in accordance with such regulations as the 
Secretary shall prescribe. Upon such release such products shall be 
subject to this chapter as if they had not been exported or otherwise 
removed.

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

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

                       ``Subchapter B--Operations

``SEC. 5911. INVENTORIES, REPORTS, AND RECORDS.

    ``(a) Every cannabis business shall maintain inventories required 
by title 26, section 471 of the Internal Revenue Code as the Secretary 
shall by formal rulemaking prescribe, with such inventories to be 
subject to verification by any Internal Revenue official during 
business hours, in such form, at such times, and for such periods as 
the Secretary shall by formal rulemaking prescribe.
            ``(1) The formal rulemaking shall take into consideration 
        existing State reporting and inventory tracking mechanisms and 
        be compatible with existing State reporting and inventory 
        tracking mechanisms to the extent possible.
            ``(2) The formal rulemaking may allow for the creation of 
        Federal processes and systems to supplement, and that are 
        compatible with, existing State tracking and reporting 
        mechanisms.
            ``(3) Rulemaking with respect to this section 5911 shall 
        take place pursuant to the Administrative Procedure Act (5 
        U.S.C. 500 et seq.) and encompass Paperwork Reduction Act 
        considerations.

``SEC. 5912. 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, including, but not 
limited to, the total amount of THC or tetrahydrocannabinol.
    ``(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 a cannabis product or cannabis products.
    ``(d) 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 premises of another producer or 
        export warehouse proprietor or released from customs custody 
        for delivery to a producer.

``SEC. 5913. PURCHASE, RECEIPT, POSSESSION, OR SALE OF CANNABIS 
              PRODUCTS AFTER REMOVAL.

    ``(a) Restriction.--No person shall--
            ``(1) with intent to defraud the United States, purchase, 
        receive, possess, offer for sale, or sell or otherwise dispose 
        of, after removal, any cannabis products--
                    ``(A) upon which the tax has not been paid or 
                determined in the manner and at the time prescribed by 
                this chapter or regulations thereunder, or
                    ``(B) that, after removal without payment of tax 
                pursuant to section 5904(a), have been diverted from 
                the applicable purpose or use specified in that 
                section,
            ``(2) with intent to defraud the United States, purchase, 
        receive, possess, offer for sale, or sell or otherwise dispose 
        of, after removal, any cannabis products that are not put up in 
        packages as required under section 5912 or that are put up in 
        packages not bearing the marks, labels, and notices, as 
        required under such section, or
            ``(3) otherwise than with intent to defraud the United 
        States, purchase, receive, possess, offer for sale, or sell or 
        otherwise dispose of, after removal, any cannabis products that 
        are not put up in packages as required under section 5912 or 
        that 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. 5914. RESTRICTIONS RELATING TO MARKS, LABELS, NOTICES, AND 
              PACKAGES.

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

``SEC. 5915. RESTRICTION ON IMPORTATION OF PREVIOUSLY EXPORTED CANNABIS 
              PRODUCTS.

    ``(a) Export Labeled Cannabis Products.--
            ``(1) In general.--Cannabis products produced in the United 
        States and labeled for exportation under this chapter--
                    ``(A) may be transferred to or removed from the 
                premises of a producer or an export warehouse 
                proprietor only if such articles are being transferred 
                or removed without tax in accordance with section 5904,
                    ``(B) may be imported or brought into the United 
                States, after their exportation, only if such articles 
                either are eligible to be released from customs custody 
                with the partial duty exemption provided in section 
                5904(d) or are returned to the original producer of 
                such article as provided in section 5904(c), and
                    ``(C) may not be sold or held for sale for domestic 
                consumption in the United States unless such articles 
                are removed from their export packaging and repackaged 
                by the original producer into new packaging that does 
                not contain an export label.
            ``(2) Alterations by persons other than original 
        producer.--This section shall apply to articles labeled for 
        export even if the packaging or the appearance of such 
        packaging to the consumer of such articles has been modified or 
        altered by a person other than the original producer so as to 
        remove or conceal or attempt to remove or conceal (including by 
        the placement of a sticker over) any export label.
            ``(3) Exports include shipments to puerto rico.--For 
        purposes of this section, section 5904(d), section 5921, and 
        such other provisions as the Secretary may specify by 
        regulations, references to exportation shall be treated as 
        including a reference to shipment to the Commonwealth of Puerto 
        Rico.
    ``(b) Export Label.--For purposes of this section, an article is 
labeled for export or contains an export label if it bears the mark, 
label, or notice required under section 5904(b).

                       ``Subchapter C--Penalties

``SEC. 5921. CIVIL PENALTIES.

    ``(a) Omitting Things Required or Doing Things Forbidden.--Whoever 
willfully omits, neglects, or refuses to comply with any duty imposed 
upon them by this chapter, or to do, or cause to be done, any of the 
things required by this chapter, or does anything prohibited by this 
chapter, shall in addition to any other penalty provided in this title, 
be liable to a penalty of $10,000, to be recovered, with costs of suit, 
in a civil action, except where a penalty under subsection (b) or (c) 
or under section 6651 or 6653 or part II of subchapter A of chapter 68 
may be collected from such person by assessment.
    ``(b) Failure To Pay Tax.--Whoever fails to pay any tax imposed by 
this chapter at the time prescribed by law or regulations, shall, in 
addition to any other penalty provided in this title, be liable to a 
penalty of 10 percent of the tax due but unpaid.
    ``(c) Sale of Cannabis or Cannabis Products for Export.--Every 
person who--
            ``(1) sells, relands, or receives within the jurisdiction 
        of the United States any cannabis products that have been 
        labeled or shipped for exportation under this chapter,
            ``(2) sells or receives such relanded cannabis products, or
            ``(3) aids or abets in such selling, relanding, or 
        receiving,
shall, in addition to the tax and any other penalty provided in this 
title, be liable for a penalty equal to the greater of $10,000 or 10 
times the amount of the tax imposed by this chapter. All cannabis 
products relanded within the jurisdiction of the United States shall be 
forfeited to the United States and destroyed. All vessels, vehicles, 
and aircraft used in such relanding or in removing such cannabis 
products from the place where relanded, shall be forfeited to the 
United States.
    ``(d) Applicability of Section 6665.--The penalties imposed by 
subsections (b) and (c) shall be assessed, collected, and paid in the 
same manner as taxes, as provided in section 6665(a).
    ``(e) Cross References.--For penalty for failure to make deposits 
or for overstatement of deposits, see section 6656.
    ``(f) Fraudulent Offenses.--Whoever, with intent to defraud the 
United States--
            ``(1) engages in business as a cannabis business without 
        filing the application and obtaining the permit where required 
        by this chapter or regulations thereunder,
            ``(2) fails to keep or make any record, return, report, or 
        inventory, or keeps or makes any false or fraudulent record, 
        return, report, or inventory, required by this chapter or 
        regulations thereunder,
            ``(3) refuses to pay any tax imposed by this chapter, or 
        attempts in any manner to evade or defeat the tax or the 
        payment thereof,
            ``(4) sells or otherwise transfers, contrary to this 
        chapter or regulations thereunder, any cannabis products 
        subject to tax under this chapter, or
            ``(5) purchases, receives, or possesses, with intent to 
        redistribute or resell, any cannabis product--
                    ``(A) upon which the tax has not been paid or 
                determined in the manner and at the time prescribed by 
                this chapter or regulations thereunder, or
                    ``(B) that, without payment of tax pursuant to 
                section 5904, have been diverted from the applicable 
                purpose or use specified in that section, shall, for 
                each such offense, be fined not more than $10,000, or 
                imprisoned not more than 5 years, or both.
    ``(g) Liability to Tax.--Any person who possesses cannabis products 
in violation of subsection (f) shall be liable for a tax equal to the 
tax on such articles.''.

SEC. 503. REPORTS AND CONFORMING AMENDMENTS.

    (a) Study.--Not later than 2 years after the date of the enactment 
of this Act, and every 5 years thereafter, the Secretary of the 
Treasury, or the Secretary's delegate, shall--
            (1) conduct a study concerning the characteristics of the 
        cannabis industry, including the number of persons operating 
        cannabis businesses at each level of such industry, the volume 
        of sales, the amount of tax collected each year, and the areas 
        of evasion, and
            (2) submit to Congress recommendations to improve the 
        regulation of the industry and the administration of the 
        related tax.
    (b) Annual Reports Regarding Determination of Applicable Rates.--
Not later than 6 months before the beginning of each calendar year to 
which section 5901(a)(2) of the Internal Revenue Code of 1986 (as added 
by this section) applies, the Secretary of the Treasury, or the 
Secretary's delegate, shall make publicly available a detailed 
description of the methodology that the Secretary anticipates using to 
determine the applicable excise tax rates that will apply for such 
calendar year under section 5901(c)(2) of such Code.
    (c) Conforming Amendments.--
            (1) Section 6103(o)(1)(A) of the Internal Revenue Code of 
        1986 is amended by striking ``and firearms'' and inserting 
        ``firearms, and cannabis products''.
            (2) The table of chapters for subtitle E of the Internal 
        Revenue Code of 1986 is amended by adding at the end the 
        following new chapter:

                   ``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:

``Sec. 9512. Law Enforcement Retraining and Successful Second Chances 
                            Fund.''.
    (d) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to sales, and applications for permits under section 5912 
        of the Internal Revenue Code of 1986 (as added by subsection 
        (a)), after 180 days after the date of the enactment of this 
        Act.
            (2) Special rules for existing businesses.--In the case of 
        any producer operating under a permit issued on or before the 
        date of the enactment of this Act under State law, the 
        requirements under section 5912 of such Code (as so added) 
        shall apply beginning on the date that is 6 months after the 
        date of the enactment of this Act.
            (3) Establishment of law enforcement retraining and 
        successful second chances fund.--The amendments made by 
        subsection (a) shall take effect on the date of enactment of 
        this Act.

                  TITLE VI--VETERANS' CARE AND ACCESS

SEC. 601. NONDISCRIMINATION IN FEDERAL HIRING FOR VETERAN MEDICAL 
              CANNABIS USERS.

    (a) In General.--It shall be unlawful for a ``veteran'', as defined 
in title 38, section 101(2) of the United States Code, to be excluded 
from employment in the Federal Government solely because the veteran 
consumes or has consumed cannabis, as defined in title 21, section 
802(16) or the United States Code. For the purposes determining if a 
person is a veteran under this provision, an other than honorable, bad 
conduct, or dishonorable release premised solely on nonviolent cannabis 
charges covered under section 101 of the States Reform Act shall be 
construed as a general discharge.

SEC. 602. AUTHORIZED PROVISION OF INFORMATION ON STATE-APPROVED 
              MARIJUANA PROGRAMS TO VETERANS.

    (a) Authorized Provision of Information.--Notwithstanding the 
provisions of the Controlled Substances Act (21 U.S.C. 801 et seq.) or 
any other Federal, State, or local law regulating or prohibiting the 
provision of information on marijuana, the Secretary of Veterans 
Affairs shall authorize physicians and other health care providers of 
the Veterans Health Administration of the Department of Veterans 
Affairs to provide to veterans who are residents of States with State-
approved marijuana programs information regarding the participation of 
such veterans in such programs, recommend their participation in such 
programs or use of FDA-approved or designated State medical cannabis 
products (within the meaning of part J of subchapter V of chapter 9 of 
title 21 of the United States Code (the Federal Food, Drug, and 
Cosmetic Act)) as part of a course of Veterans Affairs treatment, or 
prescribe the use of FDA-approved or designated State medical cannabis 
products (within the meaning of part J of subchapter V of chapter 9 of 
title 21 of the United States Code (the Federal Food, Drug, and 
Cosmetic Act)).
    (b) Definitions.--In this section:
            (1) The term ``information'' includes details such as 
        informational materials, internet websites, and relevant 
        contact information for State-approved marijuana programs.
            (2) The term ``marijuana'' has the meaning given the term 
        ``marihuana'' in section 102 of the Controlled Substances Act 
        (21 U.S.C. 802).
            (3) The term ``State'' means each of the several States, 
        the District of Columbia, the Commonwealth of Puerto Rico, any 
        territory, Federal enclave, or possession of the United States, 
        and each federally recognized Indian Tribe.

       TITLE VII--MISCELLANEOUS UPDATES AND TECHNICAL AMENDMENTS

SEC. 701. UNITED STATES INTERNATIONAL CANNABIS COMMERCE POLICY.

    (a) United States Foreign Policy Objectives With Respect to 
Cannabis.--
            (1) The President of the United States and the United 
        States Trade Representative shall send trade missions and 
        engage in treaty-making with foreign jurisdictions that have 
        legalized the import and export of cannabis to provide for the 
        legal trade between the United States and foreign 
        jurisdictions.
            (2) The principal negotiating objectives of the United 
        States with respect to trade shall include the removal of 
        unjustified foreign barriers to trade in cannabis, cannabis 
        derivatives, and cannabis products.
            (3) The United Nations Ambassador is tasked with similarly 
        ensuring updates to international accords to reflect current 
        practices.
    (b) Rule of Construction for International Treaties Respecting Drug 
Policy; Federal Primacy on Scheduling Decisions.--
            (1) It is the policy of the United States that the power of 
        the Federal Government to control, alter, heighten, lower, 
        abolish, decontrol, or likewise modify drug control scheduling 
        for any particular substance, including cannabis, is a vested 
        power of the article I constitutional lawmaking power that no 
        treaty, including the 1961 Single Convention on Narcotic Drugs, 
        the 1971 Convention on Psychotropic Substances, 1972 Protocol 
        Amending the Single Convention on Narcotic Drugs, and the 1988 
        United Nations Convention Against Illicit Traffic in Narcotic 
        Drugs and Psychotropic Substances, may infringe upon, oblige or 
        impose a duty on the United States not to undertake at its 
        pleasure, or otherwise modify. This provision shall constitute 
        a rule of construction for all Federal courts to apply in all 
        cases.

SEC. 702. CONTINUED FEDERAL EMPLOYEE DRUG TESTING.

    (a) Special Rule for Federal Employee Testing.--Section 503 of the 
Supplemental Appropriations Act, 1987 (5 U.S.C. 7301 note) is amended 
by adding at the end the following:
    ``(h) Cannabis.--
            ``(1) Continued testing.--Notwithstanding the States Reform 
        Act and the amendments made thereby, the Secretary of Health 
        and Human Services may continue to include cannabis for 
        purposes of drug testing of Federal employees subject to 
        Executive Order 12564, or other applicable Federal laws and 
        orders.
            ``(2) Definition.--The term `cannabis' has the meaning 
        given to the term `marihuana' in section 102 of the Controlled 
        Substances Act (21 U.S.C. 802).''.
    (b) Special Rule for Certain Regulations.--
            (1) In general.--The amendments made by this section may 
        not be construed to abridge the authority of the Secretary of 
        Transportation, or the Secretary of the department in which the 
        Coast Guard is operating, to regulate and screen for the use of 
        cannabis or a controlled substance within the meaning of 
        section 102 of the Controlled Substances Act (21 U.S.C. 802).

SEC. 703. DEMOGRAPHIC DATA ON NEW INDUSTRY OF CANNABIS BUSINESS OWNERS 
              AND EMPLOYEES.

    (a) In General.--The Bureau of Labor Statistics shall regularly 
compile, maintain, and make public data on the demographics of--
            (1) individuals who are business owners in the cannabis 
        industry; and
            (2) individuals who are employed in the cannabis industry.
    (b) Demographic Data.--The data collected under subsection (a) 
shall include data regarding--
            (1) age;
            (2) certifications and licenses;
            (3) disability status;
            (4) educational attainment;
            (5) family and marital status;
            (6) nativity;
            (7) race and Hispanic ethnicity;
            (8) school enrollment;
            (9) veteran status; and
            (10) sex.
    (c) Confidentiality.--The name, address, and other identifying 
information of individuals employed in the cannabis industry shall be 
kept confidential by the Bureau and not be made available to the 
public.
    (d) Definitions.--In this section:
            (1) Cannabis.--The term ``cannabis'' means either 
        ``marihuana'', as defined in section 102 of the Controlled 
        Substances Act (21 U.S.C. 802), or ``cannabis'', as defined 
        under the State law authorizing the sale or use of cannabis in 
        which the individual or entity is located.
            (2) Cannabis industry.--The term ``cannabis industry'' 
        means an individual or entity that is licensed or permitted 
        under a State or local law to engage in commercial cannabis-
        related activity.
            (3) Owner.--The term ``owner'' means an individual or 
        entity that is defined as an owner under the State or local law 
        where the individual or business is licensed or permitted.

SEC. 704. CONFORMING AMENDMENT TO CREATE UNIFORMITY OF REFERENCES IN 
              EXISTING LAW TO CANNABIS, MARIJUANA, OR MARIHUANA.

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

SEC. 705. EFFECTIVE UPON ENACTMENT.

    Except for the provisions made in section 101(d) of title I of this 
Act and throughout title V, this Act shall be considered effective as 
of its date of enactment.
                                 <all>