Source: https://lawprofessors.typepad.com/marijuana_law/federal-marijuana-laws-policies-and-practices/
Timestamp: 2019-04-23 20:55:17+00:00

Document:
"The Good, the Bad, and the Ugly: Why IRC § 280E is not the Industry Killer it is Portrayed to be"
State legalization of marijuana, and the rising prevalence of marijuana businesses, has continually thrust Internal Revenue Code (IRC) § 280E into the spotlight. Many scholars have argued for the provision’s abolishment, but the IRS’s staunch stance remains unyielding. The literature seems to suggest a tacit assumption that IRC § 280E will remain a hurdle if/until marijuana is removed from Schedule I. Although IRC § 280E is a hurdle, other mechanisms are shifting to allow marijuana businesses to be successful despite this tax provision.
For example, in many cases, the Tax Cuts and Jobs Act of 2017 did more for marijuana businesses than a repeal of IRC § 280E would have. Yes, marijuana businesses are still worse off than other businesses from a tax perspective, but marijuana’s competition is not necessarily other sectors, it is the black market. There is something to be said for the fact that the marijuana industry continues to grow, despite claims of IRC § 280E making growth “impossible.” However, the primary focus of this paper is not to explain why IRC § 280E predictions were incorrect, it is to look forward at why and how the industry can continue to succeed regardless of IRC § 280E.
Fortune article, "The Marijuana Industry’s Battle Against the IRS"
Cannabis Business Times article, "Tax Court Reinforces IRS Code 280E in Harborside Ruling"
Memo from Rosenberg Martin Greenberg law firm, "Are Owners of Cannabusinesses Eligible for the Qualified Business Income Deduction Under Section 199A?"
Will the new, reintroduced version of the STATES Act be able to get even a hearing in Congress?
Reps. Earl Blumenauer (D-OR) and David Joyce (R-OH) filed the Strengthening the Tenth Amendment Through Entrusting States (STATES) Act, appearing alongside cosponsors Reps. Barbara Lee (D-CA) and Joe Neguse (D-CO) at a press conference. Sen. Cory Gardner (R-CO) and Elizabeth Warren (D-MA) filed the Senate version of the bill.... The legislation would amend the Controlled Substances Act to protect people complying with state legal cannabis laws from federal intervention, and the sponsors are hoping that the bipartisan and bicameral nature of the bill will advance it through the 116th Congress.
There are 26 initial cosponsors — half Democrats and half Republicans—on the House version. Reps. Ro Khanna (D-CA), Lou Correa (D-CA), Ed Perlmutter (D-CO), Matt Gaetz (R-FL) and Don Young (R-AK) are among those supporters. The previous version ended the 115th Congress with 45 cosponsors.
For the most part, the latest versions of the legislation are identical to the previous Congress’s bills, though there are two exceptions. Previously, there was a provision exempting hemp from the definition of marijuana, but that was removed—presumably because it is no longer needed in light of the passage of the 2018 Farm Bill, which federally legalized the crop.
The bigger change is that the new version contains a section that requires the Government Accountability Office to conduct a study on the “effects of marihuana legalization on traffic safety.” Among other data points, the office would be directed to collect info on “traffic crashes, fatalities, and injuries in States that have legalized marihuana use, including whether States are able to accurately evaluate marihuana impairment in those incidents.” A report on those effects would be due one year after the law is enacted.
Gardner is up for re-election in 2020 in a state that legalized recreational marijuana, and allowing him a legislative win could help the GOP retain control of the Senate. On the other hand, Republican leadership may be loath to give some Democratic co-sponsors running in 2020 — whether for re-election or the presidency — political victories.
If Congress passes the proposal, Gardner said President Donald Trump will sign it. “The president has been very clear to me that he supports our legislation,” Gardner said. “He opposed the actions that were taken by the Attorney General [Jeff Sessions] to reverse the Cole memorandum and believes we have to fix this.” The Cole memorandum is Justice Department guidance against prosecuting federal marijuana laws in states that have legalized it.
Perhaps not realizing federal law imposes prohibition, commentary urges someone to "implement a two-year moratorium on further legalization and commercialization of marijuana"
Marijuana legalization is gaining momentum across the country, backed by supportive public opinion, politicians, Wall Street investors and the increasingly influential for–profit cannabis industry. By 2025, the legal U.S. marijuana market could be a roughly $50 billion business as a cornucopia of cannabis-based products become easily available in shops and online.
But in the rush to legalize marijuana, we are not taking adequate precautions and lack comprehensive and conclusive scientific evidence about what the impact might be. In today’s largely unregulated environment, for example, marijuana marketers can seemingly tout the purported benefits of pot to relieve anxiety and aches and pains and even treat Alzheimer’s disease, without any oversight, regulation or recourse for disappointed users.
Consumers would be better served if we first implement a two-year moratorium on further legalization to ascertain the potential risks and possible benefits of marijuana. Under the current haphazard laws and rules adopted by states that have legalized, we are simply not able to ensure public health and safety as marijuana becomes mainstream.
As a psychiatrist who has treated substance abusers for decades, I understand that calling for a legalization slowdown might suggest a return to the fear-filled Reefer Madness past. But it is more about being responsible, especially as many clinical studies indicate that pot is not as benign as many would like to believe and can be addictive as well as potentially harmful to the developing teenage brain.
To safeguard public health, we need clarity and consistent guidelines on a federal level for the legalization and commercialization of marijuana. Questions abound about the appropriate age of consumption, where cannabis should be located — hopefully not near schools and parks and playgrounds — and whether marijuana is an effective treatment for opioid addiction, as many claim.
A two-year moratorium on marijuana legalization would enable us to answer many of these questions and lead to practical and enforceable guidelines based on scientific evidence, not the hyped claims of pot marketers. Consumers — especially parents — have the right and the need to know.
Because this commentary speaks of the need for "clarity and consistent guidelines on a federal level for the legalization and commercialization of marijuana," I presume it is imagining the federal government as the legal entity to "implement a two-year moratorium on further legalization and commercialization of marijuana." But, of course, federal law right now has long-standing and on-going complete prohibition on legalization and commercialization of marijuana. That legal fact has not stopped "marijuana legalization is gaining momentum across the country" because prohibition cannot easily be enforced effectively against states interested in pursuing reforms.
Perhaps this commentary means to suggest (and would be more reasonable to suggest) that all states considering legalization sit tight for two years to provide more time and "opportunity to study the impact so far on health and social behavior in legalized states." But legalization has been a reality in some form in California for more than two decades and in modern forms in Colorado and Washington for five years. It seems highly unlikely that we will have "comprehensive and conclusive scientific evidence about what the impact might be" of legalization by early 2021. Because it may take decades to reach "definitive understanding of the effect pot has on everything from driving impairment to workplace performance and learning development in young people," I am not sure just a two-year pause would be all that productive even if it were some how legally achievable.
That all said, this commentary is not misguided in identifying a range of issues that states should consider with respect to public health and safety in the reform of marijuana prohibition, and especially in (indirectly) suggesting that the federal government play a more active and productive role as states continue to move forward with reforms. I think the Obama Administration was remiss when failing to set up a task force or study group on these critical health and safety issues when modern state marijuana reforms were heating up, and the Trump Administration also seems content to continue to ignore these issues all while Congress cannot itself move forward on any production reforms at the federal level.
House Subcommittee to hold hearing on Feb. 13 on "Challenges and Solutions: Access to Banking Services for Cannabis-Related Businesses"
Tomorrow afternoon, as detailed on this official webpage, the Subcommittee on Consumer Protection and Financial Institutions of the US House Committee on Financial Services will have hearing on the topic of banking access for cannabis businesses. One focal point for the hearing is consideration of draft legislation, the "Secure And Fair Enforcement Banking Act of 2019" or the "SAFE Banking Act of 2019," which is designed to allow marijuana-related businesses in states with existing regulatory structures to access the banking system.
In 2018, pot reached a tipping point. A clear majority of Americans now wants to see the drug made fully legal. California and Canada began selling marijuana to anyone over 21. Corporate behemoths like Altria (parent company of Marlboro cigarettes) and Constellation Brands (parent of Corona beer and Svedka vodka) made multi-billion dollar weed investments. And Senate Majority Leader Mitch McConnell (R-KY) managed to include hemp legalization in the 2018 Farm Bill — de facto legalizing every part of the cannabis plant except THC.
As for the 2018 Farm Bill, it’s not yet clear what the regulatory landscape will look like for CBD in 2019. [Some expect] researchers will soon be able to access CBD without jumping through the hoops necessary to acquire a Schedule I drug license from the DEA, which could finally allow scientists to provide more evidence of the compound’s uses and dosage. Still, many people in the cannabis industry are concerned about what the exact guidelines will look like on the commercial production side, and how the rollout will go.
Taxes, in particular, are a thorny issue. Local and state governments generally consider pot taxes to be a primary incentive for legalization, but if tax rates are too high, fewer growers and dispensaries will try to go legal. Already, lax oversight and an oversupply of legal cannabis in states like Oregon and Washington have led to diversion rates of at least 30 percent — meaning at a minimum about a third of legal pot is being sold on the illicit market. Meanwhile, in places like California, Canada and Michigan, hundreds of illegal storefront marijuana dispensaries compete with legal vendors, consistently undercutting them on price. Illicit operators tell me again and again that they cannot afford to survive in the highly taxed and regulated legal market, so they intend to continue breaking the law — sometimes while simultaneously operating a legal business.
Because wealthy (and typically white) applicants have an easier time covering high taxes and licensing fees, some states and municipalities have created so-called “equity” programs to ensure a more diverse industry. In 2017 and 2018, places like Oakland and Sacramento garnered fawning headlines for setting the lofty goal of legislating solutions to the catastrophic and racially disproportionate impact of the War on Drugs. But moving into 2019, California cannabis operators of all colors and political stripes now often describe equity a well-intentioned idea that is failing in practice. The words “tokenism” and “paternalistic” come up a lot.
“Equity is a marketing tool. All of the licenses are going to be given to the people with the most money,” predicts Ophelia Chong, the founder of StockPot Images and executive creative director of Aura Ventures. “Social equity will work for a few, but even then it will be 2 percent [from disadvantaged backgrounds], and those 2 percent will have to really climb a mountain to do it, with no help.” Outside of California, however, including equity and restorative justice in cannabis legalization remains an alluring prospect.
“What I like about California is they give a chance for minorities to get in. They doing the opposite in Michigan,” says Jason, whose cannabis social club, the OMS Dab House, has been a crucial gathering place for Detroit’s marijuana movement for the past decade. Michigan legalized adult-use cannabis in 2018, but as in California, quasi-legal medical dispensaries began proliferating years ago, serving stoners and sick people alike. (The ongoing legal confusion around sales and social spaces is why Jason preferred to not give his last name). Though the city of Detroit is more than 80-percent black, black activists there have previously asserted that only three to five percent of local marijuana dispensaries were owned by black people. Jason predicts that, as Michigan’s legal cannabis industry becomes increasingly corporate and consolidated, those numbers will only go down.
President Trump has repeatedly cited drug smuggling to justify a border wall. Because it is difficult to conceal, marijuana is the main drug transported between ports of entry where a border wall would matter. However, Border Patrol seizure figures demonstrate that marijuana flows have fallen continuously since 2014, when states began to legalize marijuana. After decades of no progress in reducing marijuana smuggling, the average Border Patrol agent between ports of entry confiscated 78 percent less marijuana in fiscal year (FY) 2018 than in FY 2013.
As a result, the value of all drugs seized by the average agent has fallen by 70 percent since FY 2013. Without marijuana coming in between ports of entry, drug smuggling activity now primarily occurs at ports of entry, where a border wall would have no effect. In FY 2018, the average inspector at ports of entry made drug seizures that were three times more valuable overall than those made by Border Patrol agents between ports of entry — a radical change from 2013 when Border Patrol agents averaged more valuable seizures. This is because smugglers bring mainly hard drugs through ports. By weight, the average port inspector seized 8 times more cocaine, 17 times more fentanyl, 23 times more methamphetamine, and 36 times more heroin than the average Border Patrol agent seized at the physical border in early 2018.
Given these trends, a border wall or more Border Patrol agents to stop drugs between ports of entry makes little sense. State marijuana legalization starting in 2014 did more to reduce marijuana smuggling than the doubling of Border Patrol agents or the construction of hundreds of miles of border fencing did from 2003 to 2009. As more states — particularly on the East Coast — legalize marijuana in 2019, these trends will only accelerate. The administration should avoid endangering this success and not prosecute state-legal sellers of marijuana. This success also provides a model for addressing illegal immigration. Just as legalization has reduced the incentives to smuggle marijuana illegally, greater legal migration opportunities undercut the incentive to enter illegally. Congress should recognize marijuana legalization’s success and replicate it for immigration.
Today, the Agriculture Improvement Act of 2018 was signed into law. Among other things, this new law changes certain federal authorities relating to the production and marketing of hemp, defined as cannabis (Cannabis sativa L.), and derivatives of cannabis with extremely low (less than 0.3 percent on a dry weight basis) concentrations of the psychoactive compound delta-9-tetrahydrocannabinol (THC). These changes include removing hemp from the Controlled Substances Act, which means that it will no longer be an illegal substance under federal law.
Just as important for the FDA and our commitment to protect and promote the public health is what the law didn’t change: Congress explicitly preserved the agency’s current authority to regulate products containing cannabis or cannabis-derived compounds under the Federal Food, Drug, and Cosmetic Act (FD&C Act) and section 351 of the Public Health Service Act. In doing so, Congress recognized the agency’s important public health role with respect to all the products it regulates. This allows the FDA to continue enforcing the law to protect patients and the public while also providing potential regulatory pathways for products containing cannabis and cannabis-derived compounds.
We’re aware of the growing public interest in cannabis and cannabis-derived products, including cannabidiol (CBD). This increasing public interest in these products makes it even more important with the passage of this law for the FDA to clarify its regulatory authority over these products. In short, we treat products containing cannabis or cannabis-derived compounds as we do any other FDA-regulated products — meaning they’re subject to the same authorities and requirements as FDA-regulated products containing any other substance. This is true regardless of the source of the substance, including whether the substance is derived from a plant that is classified as hemp under the Agriculture Improvement Act. To help members of the public understand how the FDA’s requirements apply to these products, the FDA has maintained a webpage with answers to frequently asked questions, which we intend to update moving forward to address questions regarding the Agriculture Improvement Act and regulation of these products generally.
In view of the proliferation of products containing cannabis or cannabis-derived substances, the FDA will advance new steps to better define our public health obligations in this area. We’ll also continue to closely scrutinize products that could pose risks to consumers. Where we believe consumers are being put at risk, the FDA will warn consumers and take enforcement actions.
In particular, we continue to be concerned at the number of drug claims being made about products not approved by the FDA that claim to contain CBD or other cannabis-derived compounds. Among other things, the FDA requires a cannabis product (hemp-derived or otherwise) that is marketed with a claim of therapeutic benefit, or with any other disease claim, to be approved by the FDA for its intended use before it may be introduced into interstate commerce. This is the same standard to which we hold any product marketed as a drug for human or animal use. Cannabis and cannabis-derived products claiming in their marketing and promotional materials that they’re intended for use in the diagnosis, cure, mitigation, treatment, or prevention of diseases (such as cancer, Alzheimer’s disease, psychiatric disorders and diabetes) are considered new drugs or new animal drugs and must go through the FDA drug approval process for human or animal use before they are marketed in the U.S. Selling unapproved products with unsubstantiated therapeutic claims is not only a violation of the law, but also can put patients at risk, as these products have not been proven to be safe or effective. This deceptive marketing of unproven treatments raises significant public health concerns, as it may keep some patients from accessing appropriate, recognized therapies to treat serious and even fatal diseases.
Additionally, it’s unlawful under the FD&C Act to introduce food containing added CBD or THC into interstate commerce, or to market CBD or THC products as, or in, dietary supplements, regardless of whether the substances are hemp-derived. This is because both CBD and THC are active ingredients in FDA-approved drugs and were the subject of substantial clinical investigations before they were marketed as foods or dietary supplements. Under the FD&C Act, it’s illegal to introduce drug ingredients like these into the food supply, or to market them as dietary supplements. This is a requirement that we apply across the board to food products that contain substances that are active ingredients in any drug.
We’ll take enforcement action needed to protect public health against companies illegally selling cannabis and cannabis-derived products that can put consumers at risk and are being marketed in violation of the FDA’s authorities. The FDA has sent warning letters in the past to companies illegally selling CBD products that claimed to prevent, diagnose, treat, or cure serious diseases, such as cancer. Some of these products were in further violation of the FD&C Act because they were marketed as dietary supplements or because they involved the addition of CBD to food.
It should also be noted that some foods are derived from parts of the hemp plant that may not contain CBD or THC, meaning that their addition to foods might not raise the same issues as the addition of drug ingredients like CBD and THC. We are able to advance the lawful marketing of three such ingredients today. We are announcing that the agency has completed our evaluation of three Generally Recognized as Safe (GRAS) notices related to hulled hemp seeds, hemp seed protein and hemp seed oil and that the agency had no questions regarding the company’s conclusion that the use of such products as described in the notices is safe. Therefore, these products can be legally marketed in human foods for these uses without food additive approval, provided they comply with all other requirements and do not make disease treatment claims.
Democrat wing of congressional Joint Economic Committee releases report on "The National Cannabis Economy"
Cannabis, or marijuana, is the most commonly used illicit drug in the United States. Though illegal at the federal level, states are taking action to legalize cannabis — from recreational use in states like Colorado and Maine to medical use in New Mexico and Florida. A record 66 percent of Americans now support legalizing cannabis, a dramatic increase from just 12 percent in 1969.
The legalization of cannabis has significant implications for state economies, as well as the national economy. The industry totaled more than $8 billion in sales in 2017, with sales estimated to reach $11 billion this year and $23 billion by 2022. There were more than 9,000 active licenses for cannabis businesses in the U.S. in 2017, with the industry employing more than 120,000 people.
There are a variety of proposals to fix the conflicts between state and federal cannabis laws. Of these proposals, the bipartisan STATES Act has drawn support from President Trump and the cannabis industry. The STATES Act would amend the Controlled Substances Act so that its provisions no longer apply to individuals acting in accordance with state laws. Importantly, the bill would also clarify that financial transactions with state-legal cannabis businesses are not drug-trafficking, creating a solution for financial institutions and the cannabis industry. Several states could be next to legalize cannabis. A bill to legalize cannabis is progressing through the New Jersey legislature, while New York lawmakers are preparing to consider similar legislation this year. Similarly, newly elected governors in New Mexico, Minnesota, Illinois, and Connecticut have all voiced support for legal cannabis, positioning their states to consider the issue.
The growth of the cannabis economy presents opportunities for greater job creation, more tax revenue, and better patient care. But current conflicts between state and federal law threaten to impede social and economic growth. Going forward, lawmakers and regulators should prioritize solutions that promote greater research into the health effects of cannabis and reduce regulations that restrict the industry’s ability to conduct business.
New commentary assails "The Medical Marijuana Delusion"
To be sure, the belief that marijuana could have legitimate therapeutic benefits has a basis in science. FDA has found that a few cannabinoids — that is, biologically active constituents of cannabis — can have positive medical benefits, and FDA has approved the manufacture and distribution of synthetic forms of those substances to treat disease, most recently the spasticity caused by rare, severe forms of childhood epilepsy. There might be other therapeutically useful cannabinoids as well. Regulators and scientists should conduct the necessary research to learn if that is true.
But the states that have authorized marijuana to be smoked for medical purposes have simply taken the law into their own hands. Since 1996, more than 30 states have permitted marijuana to be smoked for medical purposes, despite the fact that FDA has never approved marijuana for medical use and there is no FDA-approved medicine that is smoked. The reason is that there are serious, adverse, and undeniable health risks associated with smoking any agricultural product. Since 1964, U.S. Surgeons General have consistently found that smoking tobacco is dangerous. Congress finally agreed in 2009 by passing the Family Smoking Prevention and Tobacco Control Act, which empowers FDA to regulate cigarettes. Smoking marijuana carries many of the same risks as smoking tobacco, so no FDA Commissioner could legitimately treat marijuana in a unique manner.
Much of the debate over marijuana legalization has been misguided — intentionally so. Legalization’s advocates have urged states to adopt medical marijuana laws to ease the suffering of the afflicted and dying. In so doing, the medical marijuana movement has played on the compassion that Americans feel toward people about to traverse the River Styx or who are in such pain or distress that they would gladly make that crossing now. State approval of marijuana for medical purposes, however, is proof that hypocrisy is the tribute that vice pays to virtue.
The real question is whether lawmakers should revise federal law to allow marijuana to be used for recreational purposes, just as alcohol and tobacco can be so used today. If Americans are to honestly debate marijuana use, the debate must be over its utility as a recreational drug, not as medicine, and who should regulate its potential uses — the FDA Commissioner or the U.S. Attorney General. The United States has followed the wrong approach to marijuana regulation for 80 years. It is time to get it right.
Could Prez Trump's new Chief of Staff become major force pushing federal marijuana reforms in 2019?
Mulvaney, who currently serves as director of the Office of Management and Budget and acting director of the Consumer Financial Protection Bureau, was previously a member of the U.S. House, where he consistently voted to support marijuana reform amendments and cosponsored cannabis bills.
In 2015, for example, he voted for a floor amendment that would have barred the Justice Department from spending money to interfere with state marijuana laws. The proposal, which came just nine flipped votes short of passage, would have expanded on existing protections for state medical cannabis programs by covering recreational laws as well. Mulvaney also voted for the medical marijuana rider three years in a row.
In 2014, 2015 and 2016, he supported amendments to allow Department of Veterans Affairs doctors to recommend medical marijuana to military veterans. Mulvaney backed a 2014 amendment to prevent the Treasury Department from punishing banks that work with marijuana businesses. The South Carolina congressman he also voted for an amendment to protect limited cannabidiol (CBD) medical cannabis laws as well as a number of proposals concerning industrial hemp.
He also signed his name on as a cosponsor of several pieces of standalone marijuana legislation, including a comprehensive bill to reschedule cannabis and protect state medical-use laws, a measure to allow banking access for marijuana businesses, a hemp legalization bill and two separate CBD proposals.
“Mulvaney’s history of opposing wasteful government spending and support for states’ rights, specifically when it comes to marijuana, makes him our strongest ally in the White House,” Don Murphy, director of federal policies for the Marijuana Policy Project, told Marijuana Moment.
It is unclear how long Mulvaney will serve as acting chief of staff, or how frequently marijuana issues will come across his desk, but the fact that he — and not an ardent legalization opponent like Chris Christie, who was also under consideration for the job — will sit a door away from the Oval Office is likely to be seen as a positive development for cannabis reform supporters.
In his new capacity, Mulvaney will be party to conversations about which congressional legislation the president should back as well as discussions about potential marijuana enforcement policy changes at the Department of Justice under a new attorney general.
“This is by far and away the best shot we’ve had so far,” Gardner told the Denver Post on Friday morning. The reason Gardner thinks this might work is because of how the Senate works. When a bill comes up for a vote, it’s a lot easier to attach a germane amendment than one that has nothing to do with the bill. Any one senator can object to an unrelated amendment, but relevant amendments often become pending — meaning they get a vote from the full Senate. “I can’t think of a more appropriate piece of legislation than this bill to try as an amendment to,” Gardner said.
The criminal justice bill is a priority for both President Donald Trump and Senate Majority Leader Mitch McConnell, R-Kentucky. Gardner said he hadn’t spoken to the president about his plan to attach his measure to the bill, but said “the president supports this legislation, and in its purest form it is sentencing reform.” He’s also confident that he has Senate support to add it as an amendment if he can get a vote.
Given that the leadership of the Senate Judiciary Committee and of the Senate generally has shown, to date, absolutely no interest in holding hearings or moving forward with the STATES Act, I will not dispute Senator Garnder's statement that this is "the best shot [supporters have] had so far." But given that the leadership of the Senate Judiciary Committee and of the Senate generally has shown, to date, absolutely no interest in the STATES Act, I would be shocked if it gets the procedural or substantive support needed to get through the Senate in the coming weeks. And even if it somehow did, there is limited basis to think it would also make it through the House. Ergo, I think this proposed gambit by Senator Gardner has improve the chances of the STATES Act passing in 2018 from 0.1% to maybe 0.5%.
That said, especially with Democrats in control of the House of Representatives come 2019, there is a brighten chance for some meaningful federal marijuana reform in the next Congress. And it is great that Senator Gardner remains highly motivated to try to get his version of reform before his colleague and ultimately into law.
Members of Congress introduce STATES Act described as "Bicameral, Bipartisan Legislation to Protect State Marijuana Policies"
"Marijuana Federalism's Time Has Come"
Today, 33 states have legalized medical marijuana while ten have legalized recreational marijuana. The majority of Americans now live in states where some type of marijuana is legal. Further proof of changing attitudes is that in 2016, Donald Trump's stated support for respecting state's authority over marijuana policy not only did not damage his campaign, it did not even cost him support from the religious right.
In this year's elections, medical marijuana was legalized in the conservative states of Utah and Oklahoma while recreational marijuana was legalized in Michigan. Texas Representative Pete Sessions' use of his powerful position as chair of the House Rules Committee to block legislation prohibiting federal government from jailing sick people for the "crime" of using medical marijuana in accordance with their state laws may have played a role in his defeat. Voters, especially young voters, are increasingly turned off by conservatives who favor individual liberty and federalism when it comes to guns and Obamacare but favor a federal police state when it comes to marijuana.
Ironically, the other drug warrior to lose his government job this month is also named Sessions. Former Attorney General Jeff Sessions was very devoted to the war on marijuana. He revoked Obama-era policy prohibiting federal prosecution of individuals using marijuana in compliance with laws in their states.
Sessions resignation gave President Trump the ability to appoint an attorney general who agrees with his support for marijuana federalism. Unfortunately, Trump's pick to replace Sessions, William Barr, was a staunch supporter of the war on drugs when he previously served as attorney general from 1991-1993. Congress should make sure Mr. Barr will respect states' authority to set their own marijuana policies before confirming him.
Congress should protect states right to nullify federal anti-marijuana laws by passing the STATES Act. Introduced by Sen. Elizabeth Warren (D-Mass.), the bill is supported by conservative Colorado Sen. Cory Gardner (R) and libertarians like my son, Kentucky Senator Rand Paul (R). The STATES Act enjoys true bipartisan support and advances the cause of limited, constitutional government.
The federal war on marijuana failed to reduce marijuana use. It did succeed in expanding the federal police state and shredding large parts of the Bill of Rights. Fortunately, the majority of Americans ejected the inane policy of locking people up for using a non-government approved drug. President Trump and Congress can side with this pro-Constitution majority by making sure the next Attorney General is a consistent supporter of the 10th Amendment and by passing the STATES Act.
The final text of the 2018 Farm Bill was released on Monday, and industrial hemp legalization made the cut. Votes to send the legislation to President Trump’s desk are expected this week.
The bipartisan provision, championed by Senate Majority Leader Mitch McConnell (R-KY), will enable U.S. farmers to cultivate, process and sell hemp, the market for which is now a multi-billion dollar industry.
Under the legislation, hemp would no longer be in the jurisdiction of the Justice Department. Rather, the U.S. Department of Agriculture will lightly regulate the crop. If the bill passes and President Trump signs it, hemp legalization will go into effect on January 1, according to VoteHemp.
Here is the definition of "HEMP" as set forth in this draft legislation: "The term ‘hemp’ means the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis." In other words, if and when this bill becomes law, it will be possible to produce and sell, without violating federal law, "certain version of the "plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids" etc. This seems to me a very big deal, though one that also seems certain to create even more confusion about what is and is not allowed under federal law with respect to so-called "medical marijuana."
"The vast majority of the market right now is going for CBD products," said Brightfield Group's [Bethany] Gomez. "You can find some hemp seed-based beauty products or hemp in some cereals and things like that, and there's such usage on the fibers for like clothes and other industrial purposes, but that's really minimal right now."
The hemp provisions in the 2018 Farm Bill were in the Senate version of the legislation sponsored by Senate Majority Leader McConnell. The Kentucky Republican put himself on the joint Senate-House conference committee formed to hammer out the details of the final farm bill. "I know there are farming communities all over the country who are interested in this," McConnell said in June when discussing the hemp legalization legislation before the Senate Agriculture Committee. "Mine are particularly interested in it, and the reason for that is — as all of you know — our No. 1 cash crop used to be something that's really not good for you: tobacco. And that has declined significantly, as it should, given the public health concerns."
Thanks to Senate Majority Leader Mitch McConnell, the [Farm] bill includes an amendment that would permanently remove hemp from the list of federally banned drugs like heroin and cocaine, freeing hemp from the crippling legal stigma that has made it economically unviable for the past four decades. But that amendment also includes a little-noticed ban on people convicted of drug felonies from participating in the soon-to-be-federally-legal hemp industry.
[L]awmakers like McConnell, who have discovered the economic benefits of relaxing prohibitions on products such as hemp, have nevertheless quietly found ways, like the Farm Bill felon ban, to satisfy the demands of their anti-legalization constituents, to the chagrin of pro-cannabis lawmakers and activists. After POLITICO Magazine reported on the drug-crime felon ban in August, three senators — Cory Booker (D-New Jersey), Rand Paul (R-Kentucky), and Jeff Merkley (D-Oregon) — wrote to Senate leadership demanding the removal of the ban, citing its “disparate impact on minorities,” among other concerns.
[The] once-radical notion that felons ought to gain priority for entry into a newly legal industry — instead of being shut out — has quietly gained bipartisan support on Capitol Hill, albeit not among Republican leadership. In the House, this mounting opposition to the continuing punishment of felons first cropped up in September when the Judiciary Committee passed its first pro-marijuana bill. It would expand access to scientific study of the cannabis plant, a notion agreed-upon by marijuana’s supporters and detractors alike. However, Democrats almost killed the bill because it included language that barred felons (and even people convicted of misdemeanors) from receiving licenses to produce the marijuana.
Felon bans are commonplace in legal marijuana programs. Every state has some version of it, but most of them have a five- or 10-year limit. But the felon bans in both the Senate’s Farm Bill and the House’s marijuana research bill are lifetime bans, and the House bill includes misdemeanors, too. “Any restriction on misdemeanors goes in the exact contrary direction of the Second Chance Act,” said Rep. Jerry Nadler (D-New York), who will become chairman of the Judiciary Committee in January. His criticism was echoed by Steve Cohen (D-Tennessee), who sought to have the misdemeanor language struck from the bill until its sponsor, Matt Gaetz (R-Florida), promised to address that language when it comes to the House floor.
In the Senate, the movement to protect the legal marijuana trade has taken the form of the proposed bipartisan Gardner-Warren STATES Act, which would maintain the status quo of federal non-interference of state-legal programs that was upended when then-Attorney General Jeff Sessions repealed the Cole Memo, an Obama-era document that outlined a hands-off approach to state-legal programs. Booker’s Marijuana Justice Act would adopt California-style principles and apply them federally, going far beyond the STATES Act, removing marijuana from Schedule I (defined as having no medical value and a high risk of abuse) and eliminating criminal penalties for marijuana. But unlike other pro-marijuana bills, it would also deny federal law-enforcement grants to states that don’t legalize marijuana; direct federal courts to expunge marijuana convictions; and establish a grant-making fund through the Department of Housing and Urban Development for communities most affected by the War on Drugs.
Recent polling shows that Americans agree with Wyden — to a point. There is a widespread acceptance of legalizing marijuana. Gallup has been tracking this number since 1969, when only 12 percent of Americans believed in legalizing it; in October, Gallup put the number at 64 percent, the highest ever number recorded. Pew says it is 62 percent, also its highest number ever.
Legal marijuana is the fastest-growing industry in the United States. Tens of thousands of new businesses have arisen to meet the demand created by over 34 million Americans who use marijuana. And the millions of pounds of marijuana grown, processed, and sold this year will generate more than $11 billion in revenue. This industry is premised on the assumption that marijuana ownership will be protected by law. But can marijuana be owned? This Article is the first scholarship to explore the issue.
Federal law classifies marijuana as contraband per se in which property rights cannot exist. Yet the Article demonstrates that marijuana can now be owned under the law of most states, even though no state statute or decision expressly addresses the issue. This conflict presents a fundamental question of federalism: Can property rights exist under state law if they are forbidden by federal law? The Article explains why federal law does not preempt state law on marijuana ownership.
This creates a paradox: state courts and other state authorities will protect property rights in marijuana, but their federal counterparts will not. The Article analyzes the challenges that this hybrid approach to marijuana ownership poses for businesses and individuals. It also examines the fragmented status of marijuana ownership in the interstate context, where business transactions involve states with conflicting approaches to the issue.

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