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Off to a good start but “more” needs to be done

The U.S. House of Representatives passed the Marijuana Opportunity, Reinvestment, and Expungement bill, commonly known as the MORE Act. If passed by the Senate and then signed into law by the President, the bill would, among other things, end federal cannabis prohibition by removing cannabis from the Controlled Substances Act (CSA) and expunging some cannabis-related criminal convictions.

Although many pundits are touting it as such, MORE is not a legalization bill. Instead, it removes criminal penalties for the cultivation, manufacturing, distribution, and sale of cannabis and allows states to decide how they wish to regulate cannabis.

The bill also attempts to address the unjust and racially-disparate enforcement of cannabis prohibition laws by including retroactive relief measures, community reinvestment funding, and social equity initiatives designed to encourage the market participation of the communities that continue to bear the brunt of cannabis criminalization.

MORE History

The MORE Act has now been passed twice in the House. The bill was first introduced in 2019 by House Judiciary Committee Chairman Jerry Nadler (D-NY) and passed the full House in December 2020. It passed for the second time on April 1st, 2022. Despite bipartisan support, however, the bill did not receive a hearing in the Senate in 2020. It is highly unlikely to be considered in the Senate, as the chamber is focused on a similar but different bill known as the Cannabis Administration and Opportunity Act (CAOA).

For perspective, MORE is the first cannabis decriminalization bill to pass any chamber of Congress since President Nixon began the so-called “War on Drugs.” The MORE Act’s passage in the “People’s House” reflects the sweeping changes in state-level cannabis policies and shifting public sentiment toward cannabis. In just the past decade, the number of states that legalized adult-use (21+) cannabis went from 0 to 18, and public support for legalization rose from 48% to 68%. A cannabis decriminalization bill even making it this far indicates that times have certainly changed.

“If states are the laboratories of democracy, it is long past time for the federal government to recognize that legalization has been a resounding success and that the conflict with federal law has become untenable.” – Rep. Jerry Nadler (Source)

Next Steps for MORE

So what’s next for MORE? The answer is: probably not much. Similar to its first go-around, the bill faces significant hurdles in the upper chamber. If taken up in the Senate, the bill is unlikely to receive the 60 votes necessary to make its way to the President’s desk. The votes in the House fell primarily along party lines, with only three Republicans voting in favor of the bill (two fewer votes than last time), indicating a troubled pathway in the Senate. But there is still hope as Senate Majority Leader Chuck Schumer (D-NY) is expected to introduce his own highly-anticipated legalization bill sometime in April.

The 30,000-foot view? MORE is a decriminalization, state’s rights, and expungement bill that is unlikely to pass in the Senate this year, though its passage in the House reflects recent changes in public policy and opinion regarding cannabis. 

For an additional in-depth overview of MORE from WM Policy, including the highlights of the bill and some areas of improvement, keep reading.

The Highlights 

  • Removal of cannabis from the Controlled Substances Act. MORE’s most prominent and sweeping provision is the removal of cannabis from the federal CSA. Cannabis’ classification as a Schedule I substance in the CSA- a designation reserved only for those substances deemed to have “no currently accepted medical use and a high potential for abuse” – is erroneous and outdated. Despite this, there are currently 37 states that regulate legal medicinal cannabis, many of which deemed the industry “essential” during the COVID pandemic because of medical reasons. Removing cannabis from the CSA will eliminate barriers to research, significantly improve access to banking and financial services, alleviate Section 280E tax restrictions, resolve legal uncertainty for state governments and the industry, allow patients to travel across state lines with their medical cannabis, and end the failed policy of cannabis criminalization.
  • Automatic expungement of non-violent federal cannabis convictions. This bill would enable the automatic expungement of non-violent federal cannabis convictions. If passed, each Federal district would be required to identify and expunge all eligible records within one year of the bill’s enactment. Expungement is a critical component of equitable cannabis policy reform, as it relieves individuals of the collateral consequences associated with a criminal record. Automatic expungement– as opposed to petition-based expungement– ensures that all eligible individuals receive relief, regardless of their income or access to resources. This provision is especially noteworthy as there is no existing mechanism for record relief at the federal level (with some extremely limited exceptions). If passed, this bill has the potential to set a precedent for future federal drug-related expungement efforts. 
  • Resentencing for individuals serving time for non-violent federal cannabis convictions. In addition to expungement, MORE allows for some currently incarcerated individuals to have their sentence reviewed and potentially modified. According to a report from the nonpartisan Congressional Budget Office, “thousands of current inmates” could be released if the bill were to pass. Sentence modification, or resentencing, ensures that individuals no longer serve erroneous sentences for offenses that would not be considered a crime under the new law or would otherwise receive a lighter sentence.

  • Community Reinvestment Grant Program. MORE creates a “Community Reinvestment Grant Program” to allocate funding to organizations that provide services to individuals impacted by the so-called “War on Drugs.” These services include job training, reentry services, legal aid for civil and criminal cases (including expungement); as well as literacy, youth recreation,  mentoring and health education programs. Directing funding from cannabis tax revenue to community reinvestment efforts can ensure that those adversely impacted by the criminalization of cannabis can meaningfully benefit from its legalization, even those that do not wish to participate in the legal cannabis industry.
  • SBA loans for cannabis businesses. The bill includes protections for cannabis businesses seeking programs and services through the Small Business Administration (SBA). Additionally, it directs the SBA to establish a “Cannabis Restorative Opportunity Program ” to provide loans and technical assistance to small cannabis businesses owned by “socially and economically disadvantaged individuals.” Access to funding is one of the greatest barriers preventing small operators from entering — and succeeding in — the legal cannabis industry, and creating legitimate, non-predatory funding options for these prospective business owners is essential.

  • Equitable Licensing Grant Program. MORE tasks the SBA with establishing an “Equitable Licensing Grant Program” to provide funding for the development and implementation of equitable cannabis licensing programs at the local and state government levels. These programs must focus on minimizing barriers to cannabis licensing and employment for communities adversely impacted by the so-called “War on Drugs.” To receive funding, the eligible state or locality must first have taken steps to establish an automatic record clearance process for cannabis-related convictions. 

In addition, grant funding is only available for recipients who agree to include four of the following elements in their cannabis licensing program: (1) an application fee waiver for low-income individuals; (2) a prohibition on denying an individual a cannabis license due to a prior cannabis conviction; (3) a prohibition on rejecting a cannabis business application based solely on a prior criminal conviction (except for criminal convictions related to business ownership); (4) a prohibition on cannabis licensees conducting “suspicionless” cannabis drug testing on prospective or current employees, and; (5) the establishment of a cannabis licensing board that reflects the racial, ethnic, economic, and gender composition of the community.

  • Protections for cannabis use and possession. Under MORE, individuals could no longer be denied any federal public benefit on the basis of cannabis use or possession or because of a past cannabis-related criminal conviction. The bill also establishes protections for immigrants, affirming that no immigration benefit or protection can be denied due to cannabis-related reasons. These protections are imperative, as cannabis use and possession should never result in a loss of rights or federal benefits.

  • Data collection, studies, and reporting requirements. A major benefit of legalization is the ability to direct cannabis tax revenue to fund studies and collect data on the impact and externalities associated with the regulated cannabis market. MORE tasks various government agencies with collecting and publishing data on the demographics of cannabis business owners and employees, the recipients of the newly-formed Cannabis Restorative Opportunity and Equitable Licensing programs, and individuals convicted of a federal cannabis offense. 

The bill also requires studies on the societal impacts of cannabis legalization, cannabis impairment, the workplace impact of cannabis, and the impact of legalization on schools and school-aged children. In part due to the limitations of studying a Schedule I substance, there is a lack of comprehensive research and demographic data on the cannabis industry. The research and data collection requirements found in MORE will be critical in tracking the progress and efficacy of existing cannabis programs and informing future public policy decisions and initiatives at all levels of government.

As Bridget Hennessey, my colleague and Weedmaps’ Vice President of Public Affairs, wrote the first time MORE passed, “..the MORE Act could be better. It should be better. And we can make it better.” While there is a lot to celebrate in the bill, there is always room for improvement. Below is a list of issues and recommendations that could help strengthen MORE.

Areas of Improvement

  • 8% federal cannabis tax. If signed into law, the MORE Act establishes an 8% federal excise tax on all cannabis products. The rate would start at 5% and gradually increase to 8% over five years. An 8% cannabis tax rate is certainly preferable to the proposed 25% tax rate in the Cannabis Administration and Opportunity Act, drafted by Senators Chuck Schumer (D-NY), Cory Booker (D-NJ) and Ron Wyden (D-OR). However, an 8% tax will further exacerbate the already-high tax burden of cannabis businesses and likely push out smaller operators. When high tax rates significantly raise the price of legal cannabis for consumers and patients, they are far more likely to seek out cheaper cannabis from the unregulated market. An 8% federal tax added on top of the already high local and state cannabis taxes will harm the legal industry and hinder the goals of transitioning the unregulated market to a fully regulated legal industry. Regardless, tax reform at all levels of government is a critical component of shifting cannabis consumption to the legal market.

  • No tax exemption for medical cannabis. Under the tax framework outlined in MORE, the 8% excise tax would be passed onto medical cannabis patients. While the bill technically exempts “FDA-approved articles” from the excise tax, no medical cannabis products have received FDA approval (note: Epidolex is an FDA-approved drug containing CBD, and Marinol, Syndros, and Cesamet are FDA-approved drugs containing synthetically-derived THC). In other words, all medical cannabis is taxable under MORE. 

In many states, cannabis is treated as medicine with respect to taxation, meaning that patients registered with their state’s medical cannabis program are exempt from paying cannabis taxes. Medical cannabis patients already pay out-of-pocket for their medicine, as insurance does not cover medical cannabis. An excise tax should not apply to medicine, and medical cannabis products should be exempt from any proposed federal tax. A possible solution would be allowing cultivators and processors to designate a portion of their inventory for medical patients, which will then be exempt from the federal excise tax

  • Absence of advertising language. There is no mention of advertising in MORE beyond a requirement for the Secretary of Health and Human Services to meet at least once to address “the regulation, safety, manufacturing, product quality, marketing, labeling, and sale of products containing cannabis or cannabis-derived compounds.” While the removal of cannabis from the Controlled Substances Act would no longer subject cannabis businesses to the advertising restrictions imposed on Schedule I substances, explicit permission to allow advertising, with reasonable regulations, would provide clarity to both the cannabis and advertising industries. Advertising is a critical component of supporting a legal, well-regulated cannabis industry and allowing cannabis businesses to compete, build brand awareness, foster customer loyalty, and increase revenue.
  • Expungement provisions do not include non-conviction arrests. The expungement language in MORE only applies to those with a cannabis-related conviction on their record, leaving out many individuals who were arrested but never convicted. A conviction occurs when a formal declaration of guilt is made against an individual. In many cases, an arrest may not lead to a conviction, but a record of that arrest remains on one’s RAP sheet (Record of Arrests and Prosecutions). While there is a process for individuals to challenge a federal arrest record, petition-based expungement prevents many from having their record cleared due to a lack of resources or even awareness that the record exists. The automatic expungement language in MORE should extend to cannabis-related non-conviction arrest records.
  • Unclear process for resentencing. While the bill allows individuals incarcerated for nonviolent cannabis offenses to have their sentences modified, it’s unclear who is responsible for initiating the resentencing process. According to the bill, a sentence review hearing can be initiated on motion of “the individual, the Director of the Bureau of Prisons, the attorney for the Government, or the court.” In the spirit of the bill and to ensure that all eligible individuals have their sentences modified, the responsibility to identify and review all qualifying sentences should fall on the appropriate government bodies, not the incarcerated individual.

(Note: for an in-depth analysis of the criminal justice provisions in MORE, check out the Last Prisoner Project’s review of the first version of the bill) 

Recommendations and Future Considerations

  • National disparity study. MORE should include a requirement that the federal government fund a national disparity study to determine if racial, ethnic, and/or gender inequities exist in the provision of cannabis business licenses in states with legal cannabis programs. The study should also examine the efficacy of local and state programs designed to promote cannabis business ownership and employment opportunities for individuals adversely impacted by the so-called “War on Drugs” (commonly referred to as “social equity programs”). A national science-based study will help determine if and where inequities exist in cannabis licensing at the state level and whether social equity programs have been effective in increasing the market participation of communities disproportionately harmed by these efforts.   
  • National study to identify areas of disproportionate impact. MORE should also include a requirement for the federal government to conduct a national study to identify areas disproportionately impacted by cannabis criminalization. These disproportionately impacted areas should be at the census tract level and defined in terms of socio-economic factors and areas of concentrated over-policing of outdated cannabis enforcement policies. Several state and local governments have conducted similar studies to help inform the eligibility requirements for participation in their cannabis social equity program. A national study of disproportionately impacted areas should not serve to undermine existing social equity efforts. Instead, a national study could be used as the basis for future local and state social equity programs and to determine eligibility for federal programs and benefits geared toward the communities adversely harmed by the so-called “War on Drugs.” 
  • Direct funding for local and state expungement efforts. Funding for local and state expungement efforts is critical, as most cannabis-related records exist at the state level. However, MORE as written would do little to encourage local and state adoption of automatic expungement for cannabis-related offenses. The bill creates funding opportunities for local and state governments to develop and implement equitable cannabis programs that minimize barriers to licensing and employment for individuals adversely impacted by the so-called “War on Drugs,” but only if they’ve already taken steps to create an automatic process for expungement. In other words, funding is only available to local and state governments that have already adopted automatic expungement procedures for cannabis-related records. This incentive will likely have minimal-to-no effect on states without a legal cannabis program and conservative-leaning states that are less likely to apply for cannabis social equity funding.

Social equity programs and retroactive relief measures are both critical to equitable cannabis policy reform, but funding for one should not be contingent upon the existence of another. Not all states have social equity programs or have even legalized cannabis, but all states have individuals with cannabis-related criminal records deserving of expungement. Instead, the authors of MORE should consider creating a stand-alone direct grant program to aid local and state governments in implementing automatic expungement for cannabis-related records.