The States Reform Act of 2021: Latest Comprehensive Cannabis Reform Bill

On the 15^th of November 2021, Representative Nancy Mace (R-SC) introduced the “States Reform Act” (SRA). The SRA aims to remove cannabis from the Controlled Substances ACT (CSA) and regulate it at the federal level; allowing each state the authority to regulate or prohibit cannabis.

What are the Key Features of the SRA?

1. Removing Cannabis from the CSA as Schedule I

Similar with other comprehensive reform bills such as the “Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act”, the drafted “Cannabis Administration and Opportunity Act” (CAOA), the SRA would remove cannabis from the CSA and would also amend the CSA to specifically exclude cannabis. Presently, the CSA excludes wines, distilled spirits, malt beverages, and tobacco from the meaning of “controlled substance” and the SRA aims to do the same.

2. The Regulatory Framework

The Food and Drug Administration (FDA) “shall have the same authorities with respect to cannabis products that it has with respect to alcohol and no more.” In terms of cannabis infused food and dietary supplements, the FDA will have the authority to regulate and certify “designated state medical cannabis products,” as well as determining serving sizes.

The Alcohol and Tobacco Tax and Trade Bureau (TTB) – will be renamed the Bureau of Alcohol, Tobacco, and Cannabis Tax and Trade Bureau will be in charge of:

• Collecting taxes
• Granting permits for delivery, import, sale, and transport of cannabis across state lines and international trade
• Implementing track-and-trace to deter and detect diversion
• Overseeing labeling requirements

Also, the SRA would categorize raw cannabis as an agricultural crop and is subject to regulation by the Department of Agriculture. The bill also ensures that raw cannabis is regulated similar to how raw hops, barley and grains are, and that it includes dual specialty crop designation that is pursuant to the Department of Agriculture’s rules.

3. The States’ Authority to Regulate Cannabis

The SRA preserves the states’ ascendancy in regulating (and even prohibiting) the use, sale, possession, manufacturing, distribution, and other related activities of cannabis within its own jurisdiction. Each state would also determine the age limit for purchase of adult-use only cannabis products. Furthermore, advertisements cannot target or be shown to audiences under the age of 21.

4. Taxation and Revenue Spending

Similar with other comprehensive reform proposals, the States Reform Act will impose a federal excise tax. However, Rep. Mace’s bill would impose a tax of 3% on the removal price of cannabis products. This is lower than the suggested rates compared with the other bills that aims to deschedule and tax cannabis: MORE Act (8%) and the CAOA (25%).

Revenue will be allocated to the Law Enforcement and Second Chances Fund, which helps funding for:

• Law enforcement
• Education
• Community reinvestment
• Drug treatment
• Youth use prevention
• Opioid addiction treatment
• The Small Business Administration

The States Reform Act is the latest comprehensive reform bill and contributes new ideas on policy discussions on Capitol Hill. The next steps on reform legislation remains yet to be seen and with the midterm elections in less than a year the public opinion still favors removing cannabis as a Schedule I drug and regulating cannabis commerce.

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