Rep. Nancy Mace, a South Carolina Republican, filed legislation this week that would legalize cannabis on the federal level, although some questioned whether the measure would survive the U.S. Senate.
The legislation, known as the States Reform Act, is seen as a fresh potential path for cannabis legislation because it comes from the Republican side of the aisle, after Democrats fared poorly in statewide elections in Virginia and elsewhere earlier this month.
News of the pending proposal helped spark a rally in cannabis stocks on Nov. 8.
In a press conference, Mace said the bill amounts to a compromise between measures proposed in the past by both parties.
“There are pieces of this legislation that have elements of Republican and Democrat efforts,” she said. “This legislation has something good for everyone.”
Mace said she has been working on the measure for nine months and has five Republican co-sponsors thus far and emerged with these key elements:
Decriminalization of cannabis from Schedule I with states to decide on prohibition or regulation.
Regulates cannabis on a federal level similar to alcohol. The U.S. Department of Agriculture for growers and the Bureau of Alcohol, Tobacco, Firearms and Explosives as well as the Alcohol and Tobacco Tax and Trade Bureau for sellers.
Would introduce a 3% federal excise tax on cannabis to pay for law enforcement, small business and veterans’ health.
Allows medical research of cannabis.
Prohibits use of cannabis for anyone under 21 except for medical patients
Release and expungement for about 2,600 nonviolent cannabis offenders on the federal level. This would not include cartel members, agents of cartel gangs or those convicted of driving under the influence (DUI).
Prohibits discrimination against military veterans in federal hiring; they will not lose their VA healthcare benefits for cannabis.
Cannabis industry members welcomed the legislation.
“The fact that you have a GOP congresswoman introducing legislation may be helpful in refocusing the conversation around policy measures that could pass both chambers of Congress,” Kim Rivers, CEO of Trulieve
told MarketWatch. “It’ll encourage action.”
Matt Hawkins, managing partner of Entourage Effect Capital, said Mace’s measure “applies necessary pressure on Congress to pass cannabis reforms,” Hawkins said.
“Considering the immense growth of the legal industry in the past year alone, it is imperative to bring cannabis into the mainstream financial system so that businesses of all sizes can build constructive relationships with federal regulators and access the appropriate resources to scale,” he said.
When word of the Mace legislation was initially reported last week, analysts said they didn’t think it would go very far in Congress, particularly in the U.S. Senate, where the SAFE Banking measure has yet to come to a vote. Mace remains a freshman Congresswoman, with less potential influence on Capitol Hill as a relative newcomer.
“We view the bill…as moderate compared with the all-encompassing Cannabis Administration and Opportunity Act (CAOA) proposed by Senate Majority Leader Chuck Schumer, including a more moderate excise tax…as well as limited FDA regulatory authority,” said Aaron Grey, analyst with Alliance Global Partners. “Given both the House and Senate are still controlled by Democrats, we’re hesitant to put too much into Into a single bill introduced by a freshman Republican congresswoman.”