The STATES Act was reintroduced by a small group of bipartisan members of the U.S. House of Representatives on Thursday. This bill is pro-marijuana and would nullify both the hated 280E provision of taxation for cannabis companies as well as exempt the states who have legalized the drug from federal interference.
Dave Joyce (R) (OH), Dina (DNV) Titus and Max Miller, (OH), introduced the bill. This time, it was called STATES 2.0. Joyce introduced another bill, the PREPARE Act (co-sponsored with House Minority leader Hakeem Jeffreys of NY), which was designed to prepare the ground for federal marijuana law reform.
The bill has a full name of the Strengthening the Tenth Amendment by Entrusting States 2.0 Act. It would remove the states which have legalized cannabis from federal Controlled Substances Act jurisdiction if both chambers approve it and President Donald Trump signs the bill. This will resolve the legal tensions between federal prohibition of marijuana and state legalization.
Bill would eliminate the 280E section of federal tax code that applies to cannabis companies licensed in states where marijuana is legal. Companies could claim normal business tax deductions, saving them billions each year.
According to this legislation, the federal government would regulate the cannabis industry in the United States through the Alcohol and Tobacco Tax and Trade Bureau and Food and Drug Administration. This would mean that a federal framework would be created for business that would cover every U.S. state and territory which has legalized marijuana.
We can all agree the federal cannabis policy as it is currently implemented does not work. According to President Trump, “the existing policy caused unnecessary harm, and squandered tax dollars, by diverting resources away from fighting violent crime,” Joyce, co-chairman of the Congressional Cannabis Caucus said in a release. The STATES 2.0 Act addresses this problem by creating a more rational approach to marijuana regulation. This allows states to implement policies that are best suited to their local communities.
Titus, another co-chairman of the Cannabis Caucus said that the STATES Act ensures “that the federal government doesn’t interfere with states or tribal governments who have chosen to legalize marijuana.”
Titus stated that “it’s time to get national policy in line with state policies or, at the very least, out of their way.”
Shanita Penny, the executive director of Coalition for Cannabis Policy, Education and Regulation, said that this bill would allow interstate commerce. Penny stated that the bill will also offer financial institutions a safe haven, allowing marijuana companies to access broader capital markets.
Penny added, “With the STATES Act we addressed all typical business concerns.” If the bill were to become law, it would render the SAFE Banking Act obsolete.
“This is that overarching federal framework that is going to ensure consistency across states for not only businesses … it’s an exciting bill for everybody involved,” Penny said.
It is unclear whether the bill will pass both houses of Congress, and make it to the President’s desk. In the past, many pro-cannabis measures have been killed in the Senate, despite having passed through the House of Representatives. Penny pointed out that the STATES Act has not yet been introduced in the Senate this year.
We do not have a Senate counterpart bill. So before we can even talk about giving them an opportunity to move forward with this … we still have some work to do there,” she said. “While we certainly haven’t had any indications from Trump that there’s going to be action on this, what we have right now is an opportunity to reengage members… to make sure that when the administration gives us the green light, that we have a bill we can get passed and get onto his desk.”