This past election cycle saw big wins for cannabis. Voters in eight states approved measures to legalize marijuana in some form, joining more than a dozen other states and the District of Columbia.
At the same time, the federal government has threatened to enforce federal drug laws against states where marijuana use is legal. In response, nearly four dozen Congress members sent a letter last week to the chair and ranking member of the House Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies, urging them to include an amendment in the 2018 spending bill that would prevent the Department of Justice from obstructing state marijuana programs.
“The people have been pretty clear that this is something they don’t want the federal government to interfere with,” said Democratic Rep. Earl Blumenauer of Oregon, one of the signees and sponsor of the amendment, during a press call Wednesday.
The cannabis industry is a multibillion-dollar business that’s expected to grow exponentially over the coming decade. Marijuana sales in North America last year grew by 30 percent, earning the industry $6.7 billion in revenue, according to a recent report by Arcview Market Research. The cannabis market research firm also projects North American sales to reach $20.2 billion by 2021 – a record amount for a fledgling industry.
But state legal marijuana firms shoulder a tax burden far greater than any other “similarly situated business would face,” Blumenauer said. Under Section 280E of the federal tax code, businesses “trafficking in controlled substances” – in this case, marijuana – have to pay up to 70 percent in taxes. That’s more than twice the typical 30 percent rate.
Having to fork over more money to the federal government only stymies the cannabis industry, Blumenauer said. In March, Blumenauer, along with fellow Oregon Democrat, Sen. Ron Wyden, introduced a legislative package that would open a path to marijuana legalization and reform. The bills aim to achieve three major goals: eliminate punitive tax; close the gap between federal and state policies by removing federal criminal penalties and civil asset forfeiture; and de-schedule, tax and regulate marijuana.
“We need to build the momentum and educate the public, and I want the industry to be fully engaged,” said Blumenauer, who in February helped launch the first-ever Congressional Cannabis Caucus. “This is a pivotal time.”
Blumenauer said his legislative package is just the tip of the iceberg. Voters can expect a wave of other cannabis reform bills introduced by a bipartisan group of lawmakers this spring.
Though the Trump administration has sent “confusing signals” on its enforcement tactics, Blumenauer said he is confident that lawmakers will succeed in reforming policy and descheduling marijuana.
“This is a very unusual climate in the nation’s capital,” Blumenauer said. “Nothing is certain until it happens, but the indications are pretty strong that we would be successful.”