Free Domestic Shipping Over $100

Sept 10th: Update on the Federal Movement

With provisions in the infrastructure bill plus the administration and opportunity act, it’s an exciting time for the industry. Read on for updates on the federal movement.

The Infrastructure Bill (the INVEST in America Act) includes provisions for items like roads, railways, broadband internet, clean water, and...cannabis? Yes, you read that right. 

While the cannabis provisions don’t address federal legalization, additional legislation is being discussed that could potentially remove cannabis from the federal list of controlled substances. 

Before lighting up in celebration, however, it’s important to understand the details of both the cannabis provisions in the Infrastructure Bill and the Cannabis Administration And Opportunity Act. Read on for all that and more.

Reading Time - 6.5 min


Update on Federal Cannabis Movement

Here’s a quick summary of our news highlights:

  1. The Infrastructure Bill includes provisions that would allow scientists to study the cannabis consumers are actually using instead of limiting them to government-grown cannabis. Additionally, it encourages states with legal cannabis to educate citizens about cannabis-impaired driving.
  2. If the bill is enacted, a report must be completed within two years that describes methods and/or recommendations for getting cannabis into the hands of researchers, creating a national clearinghouse to facilitate the collection and distribution of cannabis, and addressing barriers to research procedures.
  3. The DEA may soon approve applications from several companies that applied for federal authorization to manufacture cannabis for research purposes.
  4. The proposed Cannabis Administration And Opportunity Act, if enacted, would federally legalize cannabis.
  5. More specifically, it discusses removing cannabis from the Controlled Substances Act, redefining cannabis under the FFDCA, transferring jurisdiction away from the DEA, and taxation.
  6. The Substance Abuse and Mental Health Services Administration (SAMHSA) removed language from some of its policies that previously blocked federal grant money from programs that provided or allowed cannabis use in the treatment of substance abuse or mental health disorders.
  7. Insurance has long been a hurdle for cannabis businesses. However, with legalization on the horizon, insurance companies who are prepared with the right coverage at the right costs could see a massive boom.

What Cannabis Provisions Are Included in the Infrastructure Bill?

The bill in question, H.R. 3684, mainly focuses on improving transportation and various utilities like water and power. However, it also includes text addressing cannabis research. Essentially, researchers would be allowed to study the cannabis consumers are actually using. 

Currently, scientists can only research government-grown cannabis. If the bill becomes law with this provision intact, the Transportation Secretary, in collaboration with the Justice Department and U.S. Department of Health and Human Services, will have two years to complete a public report.

Section 25026 of the bill details the requirements of that report. In summary, it must describe methods and/or recommendations regarding:

  • Increasing and improving access, for researchers, to cannabis and cannabis products that are already lawfully available to patients or consumers.
  • Creating a “national clearinghouse” to facilitate the collection and distribution of cannabis and cannabis products that are already lawfully available.
  • The same items must be provided “for scientific researchers located in States that have not legalized marijuana for medicinal or recreational use.”
  • Identify and provide recommendations that address Federal Statutory and regulatory barriers to research procedures in regard to cannabis-impaired driving and “establishing a national clearinghouse for purposes of facilitating” said research.

The research is meant to encourage states with legal cannabis to provide citizens with education about cannabis-impaired driving. So, while it may have seemed odd to include cannabis provisions in an infrastructure bill of this type, this particular provision aims to “reduce injuries and deaths resulting from individuals driving motor vehicles while impaired by marijuana.”

There’s still much debate, however, when it comes to accurately assessing “impairment” from cannabis use. A report from the National Institute of Justice said, “Researchers investigated how marijuana affects skills required for safe driving and found that biofluid levels of THC did not correlate with field sobriety test performance or marijuana intoxication, regardless of how the cannabis was ingested.” 

Federal Cannabis Legalization

Considering that the cannabis provisions in the Infrastructure Bill don’t even address legalization, federal legalization is likely still quite a ways off. However, there are several important items to consider.

First, the DEA may soon approve applications from several companies that applied for federal authorization to manufacture cannabis for research purposes. Federal cannabis cultivation takes place in just one facility at the University of Mississippi. So, the possibility of additional facilities is significant. They’ll also be essential if the cannabis research provisions in the Infrastructure Bill are enacted. 

Second, the Cannabis Administration And Opportunity Act, drafted by Senator Cory Booker (D-NJ), U.S. Senate Finance Committee Chairman Ron Wyden (D-OR), and Senate Majority Leader Chuck Schumer (D-NY), directly addresses federal legalization. 

What is the Cannabis Administration and Opportunity Act? 

While the legislation is still in its infancy, it currently includes the following important items:

  • Removing cannabis from the Controlled Substances Act and from the list of controlled substances.
  • Redefining cannabis “within the Federal Food Drug and Cosmetic Act (FFDCA) under title 21 of the U.S. Code.”
  • “...transfer primary agency jurisdiction over cannabis from the DEA to the FDA within the Department of Health and Human Services, TTB within the Treasury Department, and ATF, within the Department of Justice, as appropriate.”
  • And, of course, taxation.

A discussion of the legislation from Senate Democrats states it, “would help put an end to the unfair targeting and treatment of communities of color by removing cannabis from the federal list of controlled substances and empowering states to implement their own cannabis laws.”

Some are concerned it doesn’t adequately address the needs of medical cannabis patients. Their main argument is that “Leaving out patient care overlooks the largest group of people who will or may be affected by this new law.” 

The National Industrial Hemp Council, on the other hand, believes authority on licensing cannabis cultivation should reside with the Department of Agriculture instead of the Treasury Department. Additionally, they said, “The tax structure proposed in the bill is too onerous and severely disadvantages small and minority-owned businesses, which will promote rather than reduce illicit production.”

The current federal status of cannabis creates immense logistical problems even in legal states (banking, transportation, taxes, insurance, etc.). So, while the Cannabis Administration and Opportunity Act has a long way to go before it sees a vote, producers and retailers alike are hopeful.

Cannabis Grant Funds and Insurance Booms

Last month, the federal Substance Abuse and Mental Health Services Administration (SAMHSA) removed language from some of its policies. While that might not sound terribly exciting, the language in question previously blocked federal grant money from programs that provided or allowed cannabis use in the treatment of substance abuse or mental health disorders. However, SAMHSA still prohibits using federal grant money to directly purchase, prescribe, or provide cannabis.

In other news, insurance companies are anticipating additional policy options with federal legalization on the horizon. The insurance needs of cannabis producers and retailers are vast. Reuters interviewed insurers, brokers, agents, lawyers, and cannabis business owners and found there’s a desperate need for additional, affordable coverage across the board. 

“As Congress considers bills that would loosen federal laws, some insurers are trying to fill the gap with new types of coverage. Because insurers are regulated at the state level, they can now offer coverage in states where [cannabis] is legal, and federal decriminalization would expand the market.” 

Lack of insurance, or even just not enough insurance, can increase operational expenses. For example, some companies are forced to split shipments up to stay within the limits of their cargo insurance. Larger insurance providers often offer policies through subsidiaries, but costs are sometimes twenty to thirty percent more expensive for cannabis retailers. 

Yes, federal legalization could still be years away. However, insurance companies with the right coverage at the right price will see a massive boom when legalization finally does happen.

Final Thoughts

Make sure to follow us on social media to stay up to date on the latest cannabis news and terpene science. Plus, consider signing up for our Wholesale Platform for volume discounts, early access to new products, and more.

Older Post Newer Post