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U.S. Congress Takes One MORE Step Towards Legalizing Marijuana, But Don’t Hold Your Breath

By Scott D. Museles and Hunter M. Haines

On November 20, 2019, the House Judiciary Committee took another step towards legalizing marijuana.  After a favorable 24-10 vote, the House Judiciary Committee approved the Marijuana Opportunity Reinvestment and Expungement Act of 2019 (the “MORE Act of 2019”), which would decriminalize marijuana at the federal level. The MORE Act of 2019 now heads to the House for review. Although it is unlikely that the Act will pass both the full House and Senate, the favorable vote at the Committee level on this Act reflects continued momentum for social equity components of cannabis laws with a focus on the economically disadvantaged and those disproportionately impacted by the war on drugs, or both.

The MORE Act of 2019 would:

• Remove “Marijuana” from the Controlled Substance Act and retroactively apply the repeal to all prior and pending judicial proceedings;
• Require federal courts to expunge prior convictions, allows prior offenders to request expungement, and require courts, on motion, to conduct resentencing hearings for those still under supervision;
• Broaden protections for marijuana users and previous offenders by prohibiting the denial of any federal public benefit, including housing;
• Expand immigrant protections for aliens, protecting aliens from being denied any benefit or protection under the immigration laws based on any event…relating to cannabis;
• Create an Opportunity Trust Fund, a fund established to help people impacted by the war on drugs; and
• Create the Community Reinvestment Grant, the Equitable Licensing Grant, and Cannabis Opportunity Grant through the Opportunity Trust Fund.

Although the MORE Act of 2019 adds a five (5) percent sales tax to purchases of marijuana, the Act brings much needed banking and tax relief to marijuana business owners.  By removing “Marijuana” from the list of federally controlled substances, the MORE Act of 2019 would also:

• Allow marijuana businesses to bank at banks insured by the Federal Deposit Insurance Corporation;
• Allow credit cards to be used for marijuana related purchases; and
• Remove marijuana from section 280E of the Tax Code, allowing marijuana businesses to take advantage of the numerous tax benefits offered to other businesses.

Please contact us if you have any questions regarding your cannabis business or how the Act may affect the operation of your business.

Link to Bill Text: https://www.congress.gov/116/bills/hr3884/BILLS-116hr3884ih.pdf

DISCLAIMER: The contents of this Alert are for informational purposes only and do not constitute legal advice. If you have any questions about this Alert, please contact the Shulman Rogers attorney with whom you regularly work or a member of the Shulman Rogers Cannabis Industry Group.