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Cannabis Decriminalization: A Breakdown of the CAOA

Cannabis Decriminalization: A Breakdown of the CAOA

Capitol hill, by Harold Mendoza via Unsplash
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Nation-wide decriminalization in the United States. Something virtually unthinkable even as little as fifteen years ago now seems like a looming reality (though not a future that’s guaranteed, as we’ll detail later in today’s piece).

But what exactly does this “decriminalization” bill mean for cannabis consumers? Is it the same as legalization? And how comprehensive is the proposed legislation?

In this article we’re going to be breaking down the newly proposed “Cannabis Administration & Opportunity Act”, outlining what the bill does – and doesn’t – address, and include some frank talk on exactly how likely the proposal is to be ratified into law. There’s a lot to go over, so let’s dive right in.

What is the Cannabis Administration & Opportunity Act?

Cover of the CAOA summary

Proposed by Senate Majority Leader Chuck Schumer in July of 2021, the Cannabis Administration & Opportunity Act (or “CAOA”, as we’ll be referring to it in this article) is a rather sweeping piece of potential legislation, primarily focused around the removal of marijuana from the Controlled Substances Act.

At over 160 pages this bill covers a lot of ground; we’ll be detailing out some the important bits below, with page references for the legislation itself as we go.

(Full PDF linked here: Cannabis Administration & Opportunity Act [via democrats.senate.gov])

Cover of the CAOA summary

Proposed by Senate Majority Leader Chuck Schumer in July of 2021, the Cannabis Administration & Opportunity Act (or “CAOA”, as we’ll be referring to it in this article) is a rather sweeping piece of potential legislation, primarily focused around the removal of marijuana from the Controlled Substances Act.

At over 160 pages this bill covers a lot of ground; we’ll be detailing out some the important bits below, with page references for the legislation itself as we go.

(Full PDF linked here: Cannabis Administration & Opportunity Act [via democrats.senate.gov])

What Does the CAOA Do for America?

First and foremost, the CAOA would require the removal of cannabis, in its entirety, from the list of controlled substances as defined by the DEA (pg. 6).

After being removed from the DEA’s jurisdiction multiple government agencies would then split the duties of regulation & oversight:

The Food & Drug Administration would be “recognized as the primary federal regulatory authority” when it comes to the manufacturing & marketing of cannabis goods, including quality control standards, labeling information for ingredients & usage instructions, and the like (pg. 111).

Taxation & trade would, sensibly, fall under the Alcohol and Tobacco Tax and Trade Bureau, giving the agency complete oversight on collecting tax revenue from marijuana sales (pg. 18).

And enforcement of cannabis laws at a federal level would be removed from the DEA and instead moved onto the Bureau of Alcohol, Tobacco, Firearms & Explosives, adding “Cannabis” to it’s title (“The Bureau of Alcohol, Tobacco, Cannabis, Firearms & Explosives”, or “ATCFE”) (pg. 17).

What Does the Federal Cannabis Tax Look Like?

Importantly to the Tax & Trade Bureau, the bill also creates a new federal-level cannabis sales tax, which would begin at a 10% rate for the first two years, then increase by 5% every year thereafter until reaching a maximum amount of 25% (pg. 65). This federal tax rate is nation-wide, and on top of existing cannabis taxation taken by individual states.

The federal cannabis tax rates do not effect all businesses equally, however. Under a similar ‘growing’ scheme as the tax rate, by year 5 any small business with less than $5 million dollars worth of profit each year is eligible for a 50% reduction in their tax rate, taking them to 12.5% instead of 25% (pg. 68).

Once collected, these taxes are (at least in part) earmarked for programs meant to aid “individuals adversely impacted by the War on Drugs” via varying governmental agencies.

Tax paperwork, by Kelly Sikkema via Unsplash

What Will Cannabis Tax Revenue Be Spent On?

The establishment of a new “Cannabis Justice Office” underneath the Justice Department would seek to use cannabis tax revenue to provide legal aid, job training, and other public services for those who have been arrested for marijuana charges while living significantly underneath the federal poverty level (pg. 38).

Also the “Equitable Licensing Grant Program & Small Business Administration” would “provide funding to eligible states & localities”, offering loans & other assistance to those effected by the war on drugs & small business owners from socioeconomically-disadvantaged backgrounds (pg. 42).

Black Market No More

Removing cannabis from the Controlled Substances Act makes these programs & taxation revenue streams possible by allowing cannabis-related businesses (in legalized states) to officially and openly do trade in the United States.

Legal cannabis businesses would have access to the federal banking system, be allowed to list companies on the stock market, could conduct interstate commerce, and apply for small business loans; where tax breaks exist for small businesses they could now benefit from those as well.

Federal agencies would also no longer be able to deny public housing and other services to cannabis users; this includes US veterans, who often use medical marijuana under fear of having their benefits stripped due to drug testing.

Likewise individuals cannot be denied government employment based on prior cannabis convictions (pg. 61), and would go further to expunge the criminal records of those who have been convicted on cannabis-related charges (pg. 56).

Where the CAOA Succeeds & Fails

First & foremost, the CAOA removes the issue of enforcing federal cannabis prohibition.

Over 600,000 arrests were made in 2020 for cannabis possession, often targeting the disenfranchised & socioeconomically vulnerable, and typically with a heavy bias against non-white US residents.

These arrests prevent what are often non-violent offenders from fully re-entering the work force, particularly with regards to cannabis businesses – Most states bar individuals with federal criminal records from owning, operating, or working at a legal cannabis business place, which will no longer be the case if the CAOA succeeds in striking cannabis arrest records.

This changeover in policy effects issues both civil and fiscal. As stated in the bill:

“According to the American Civil Liberties Union (ACLU), enforcing cannabis prohibition laws costs taxpayers approximately $3,600,000,000 a year” (pg. 4). This means over three billion dollars of tax revenue can be reclaimed each year by removing marijuana prohibition.

What the CAOA Doesn’t Do

While the CAOA goes to great lengths to improve the damage done by the War On Drugs in America, there are still large questions that need to be contended with, and despite being a 160+ page bill there are some surprising gaps in the current proposal.

No language exists in the CAOA regulating or controlling consumers growing cannabis on their own, IE: the home grow op. With the taxation rates set as they are, and laid on top of existing state tax rates, states without strict language controlling who can cultivate cannabis will likely see a plethora of home grows from those attempting to bypass steep prices.

Additionally, no part of the proposal addresses the topics of public consumption or intoxication. Marijuana intoxication itself can be hard to define with current methods, and while consuming a weed brownie at a coffee shop might not do any particular harm, smoking cannabis can see others nearby sharing in its effects.

Man trimming cannabis leaves, by GreenForce Staffing via Unsplash

Legalization vs. Decriminalization

As stands the bill does not federally legalize cannabis – The word “decriminalization” is an important distinction.

Though cannabis would be removed from the list of scheduled & controlled substances on a federal level the legislation explicitly says that individual states would still be granted the authority to create & enforce their own cannabis laws.

With this language the bill does not address access for medical marijuana consumers living in non-legalized states; those who wish to consume cannabis as medical treatment will still be subjected to their state’s laws, potentially blocking them from medication.

And, though the bill does open up new opportunities for those who have had prior cannabis convictions, federal employees may still be subject to random drug tests – And fired if they do not pass.

Overall the language regarding governmental oversight in the bill is somewhat hazy and ill-defined; the legislation as-written does address some aspects of reform in detail, but the actual participation requirements & duties assigned to the ATF, FDA & DEA are not entirely rounded out.

Though details such as these are likely to change and be added as the bill goes through rounds of feedback & alteration, knowing exactly what duties will fall to which agencies & how is an important part of the proposal that will need to be filled out.

Will The CAOA Pass?

We would love to be able to unilaterally say “yes”. Here’s why we can’t.

While Senator Schumer’s proposal comes at a time when acceptance of cannabis use is at an all-time high throughout most American citizens this attitude is not always reflected in the opinions of our elected officials.

Sen. Schumer himself has gone on record as saying that, currently, the bill does not have the votes needed to pass. Within the Democrat party are several senators still not on-board with the bill, and though there is strong bipartisan support from Republican senate members the leadership of each camp is strongly opposed:

On the Democrat side are President Joe Biden & Vice President Kamala Harris, both of whom have been staunch supporters of keeping marijuana federally illegal.

Though Biden has come out in favor of decriminalization while on the campaign trail in the past, recent word via officials at the White House say that the President is only interested in more incremental change, such as decriminalization & rescheduling, not the removal of cannabis from the controlled substances list.

Meanwhile, the record of Harris on cannabis legalization has been inconsistently hazy. Her time spent as San Fransisco District Attorney does not speak kindly for itself, with 1,900+ convictions over cannabis made during her tenure.

More recently Vice President Harris has spoken out in support of cannabis legislation, including sponsoring the recent MORE act, but has so far remained silent on the topic of the CAOA.

For Republican senators very little matters save the support or denial of Senate minority leader Mitch McConnell, who has gone on record multiple times saying that cannabis will not be legalized under his watch, and can be expected seek to prevent members of his party from voting in favor of the bill.

McConnell can be swayed, particularly if cannabis makes fiscal sense for his home state (as his support for hemp legislation saw an – albeit brief – boom for Kentucky farmers), but considering the political importance of cannabis legislation we don’t see the minority leader coming to the table with an open mind and giving nature.

Will The CAOA Fail?

All of the above in mind, while we can’t convincingly say “yes” to the question of whether the CAOA will pass, we can’t exactly say “no” either.

As mentioned earlier there is bipartisan support for the bill, and as there are likely to be multiple rounds of changes & alterations to the bill’s current text, more support should come on-board as the bill is discussed & modified based on collected feedback.

Though the CAOA has a hard road in front of it there remains strong support within the government, and even those who may show outward opposition now can potentially be bent and swayed by overwhelming public opinion.

Man writing a letter, hopefully to Congress in support of cannabis legislation, by Scott Graham via Unsplash

What You Can Do To Help

If national decriminalization is important to you, there is no better time to get involved than the present. Writing letters to your government representatives in Congress – particularly those who do not already support the removal of cannabis from the controlled substances list – is an excellent and still very valid way of showing support and potentially changing minds.

The CAOA has an open commentary period lasting until September 1st, 2021, after which time the Senators involved will take submitted feedback and begin the revision process for the legislation.

Though that means there’s little time between the announcement of the bill & the first revision process, it’s good to contact your state Senators, and lend your voice & support to the proposal.

Wrapping Up

The road to decriminalization is likely to be a long one, and sadly far from a slam dunk – Differing opinions among governmental leadership & opposition in the form of political maneuvering are both pitfalls the CAOA can easily stumble into.

Again, though, that doesn’t mean the effort is without hope, and given the increasing public sentiment in favor of cannabis use it seems decriminalization or legalization of some fashion will likely occur sooner over later.

We hope you’ve enjoyed today’s breakdown. We’ll have more news, information and opinions on this topic in the coming months – Thank you for reading, and happy smoking!

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