Our Summary of the new Cannabis Administration and Opportunity Act
On July 14, Senate Majority Leader Chuck Schumer (D-NY) announced the long-awaited introduction of comprehensive federal cannabis reform legislation – the Cannabis Administration and Opportunity Act (CAOA). The discussion draft was introduced in partnership with Senators Cory Booker (D-NJ) and Ron Wyden (D-OR), and offers reform proposals to address a wide range of issues ranging from the conflict of laws between the federal and state governments on cannabis to research and restorative justice. While the bill represents an ambitious step forward in federal cannabis policy reform, offering the most comprehensive approach yet contemplated by federal lawmakers with the backing of the highest-ranking elected member of the Senate, we believe there is more work that can be done to protect patients. The three Senate offices are taking public comment on the draft until September 1. ASA is preparing a letter to submit with additional recommendations. Below is a short summary of the current measure.
Title I – Decriminalization of Cannabis, Public Safety, and States’ Rights
- Would remove cannabis from the Controlled Substances Act within 60 days of enactment.
- Would transfer primary jurisdiction over cannabis from the Drug Enforcement Agency (DEA) to the Food and Drug Administration (FDA), Alcohol and Tobacco Tax and Trade Bureau (TTB), and Alcohol, Tobacco, Firearms and Explosives (ATF). The FDA would regulate the manufacturing of cannabis products, the TTB would regulate taxation of cannabis products (to include track-and-trace of licensed cannabis products), and ATF would conduct enforcement related to diversion control. The three agencies are directed to coordinate regulatory responsibilities by the bill. This approach is similar to the model that federal regulators apply to tobacco and alcohol.
- Later in the bill (Title V) FDA jurisdiction of cannabis is addressed. Under Title V the Center for Cannabis Products would be created under FDA, which would be focused on regulating and overseeing the review and approval of proposals from state-licensed medical cannabis product cultivators and manufacturers, as well as organizing standards for everything from manufacturing and cultivation practices to product and labeling standards and related distribution requirements. The Center would also organize rules related to cannabis in cosmetics and food products, and would prohibit use of natural or artificial flavors in cannabis vaping products and delivery systems. Finally the Center would define a regulatory approval process for CBD in dietary supplements, and the legislation defines ‘adulterated cannabis products’ and ‘misbranded cannabis products’ to give the new office a starting point in shaping federal cannabis product safety requirements.
- Would recognize state law regarding the possession, production, and distribution of cannabis, but maintain federal criminal penalties in the case of illegal cannabis diversion of 10lbs or more, and establish 21 years of age minimum age to purchase cannabis.
- Would limit consumer retail transactions to no more than 10 ounces of cannabis.
- Would retain authority for the Health and Human Services to continue drug testing of federal employees and contractors.
Title II – Research, Training & Prevention
- Would direct the Comptroller General to conduct research and issue a report to several congressional committees within two years of the bill’s enactment focused on the societal impact of state adult-use cannabis reforms. The draft bill specifically directs evaluation of:
- The number of sick days reported to workers comp claims, traffic deaths and school suspensions, cannabis-related hospital admissions,
- Rate of and any changes in the rate of arrests related to methamphetamine possession, hospitalization related to methamphetamine and narcotics, use of cannabis and its byproducts for medical purposes, use of cannabis and its byproducts relating to the health, including the mental health of veterans,
- An overview of government spending related to enforcement actions and court proceedings, district-wide and state-wide standardized testing scores,
- An analysis of state and local tax revenue resulting from legal cannabis sales, and
- An overview of any diversion of cannabis into neighboring states and drug seizures in neighboring states.
- Would direct the Department of Health and Human Services and National Institutes of Health to research the impacts of cannabis, with a focus on the effects of THC on the brain, efficacy of cannabis medicine in treating health conditions ranging from physical to neurological, as well as identify additional medical benefits and uses of cannabis. Federal health regulators would be required to consider applications of varying forms of cannabis to include whole plant extracts and broad variation in plant compound ratios.
- Would direct federal health regulators to submit a report to several congressional committees annually on research conducted under this bill.
- Would direct federal health and transportation safety regulators to collect and share data on cannabis-impaired driving, and organize public health prevention strategies to prevent cannabis-impaired driving, to include grants to states to collaborate on safety strategies and improve roadside testing to determine cannabis impairment.
Title III – Restorative Justice & Opportunity
Would create the Cannabis Justice Office within the Office of Justice Programs (OJP) to administer a community reinvestment program. The program would provide grants to non-profit organizations to administer services to individuals adversely impacted by the war on drugs, to include job training, reentry services, legal aid to include cannabis-related criminal records expungement, literacy programs, youth recreation and mentoring as well as health education programs.
- Would create a federal definition of ‘individual adversely impacted by the war on drugs’, as an individual who has had an income below 250% of the federal poverty level for not fewer than 5 of the past 10 years, who has been arrested for or convicted of sale, possession, use manufacture or cultivation of cannabis (except for distribution to a minor) or the parent, sibling, spouse, or child of whom has been arrested for, or convicted of, an offense described above.
- Would establish a Small Business Administration (SBA) program to state and local governments to implement cannabis licensing programs that assist businesses owned by individuals adversely impacted by the war on drugs.
- Would require the Bureau of Labor Statistics (BLS) to compile and maintain data on the demographics of individuals who are business owners in the cannabis industry and individuals who are employed in the cannabis industry.
- Would authorize the rights of individuals to petition the courts for expungements of cannabis-related criminal offenses, direct federal districts to expunge conviction records for non-violent federal cannabis offenses in federal court districts on or after 5/1/71, and require courts imposing sentences on individuals currently serving in the criminal justice system for non-violent cannabis offenses to review and reduce sentences of these individuals.
- Would direct the Comptroller General with HHS to issue a report two years after the bill’s enactment detailing the demographics of individuals convicted of federal cannabis offenses, as well as require the Treasury Department to submit a report to Congress on the characteristics of the licensed cannabis industry. Characteristics identified by the bill include the number of persons operating at each level, volume of sales, amount of tax collected annually, areas of evasion, and recommendations to improve industry regulation related tax administration.
- Later under Title IV of the bill, would direct the Treasury Department to issue a description of the methodology used to determine the applicable tax rate per ounce, and the applicable rate per gram which will apply for each calendar year.
- Would impose nondiscrimination in the provision of federal public benefits based on cannabis possession, use or past non-violent cannabis related conviction.
- Would prohibit non-violent cannabis related convictions from affecting immigration status decisions.
- Authorizes the Department of Veterans Affairs (VA) to recommend and issue opinions regarding veteran use of state-regulated cannabis, participation in related state medical cannabis programs, and for VA physicians to be able to complete related forms.
Title IV – Taxation and Establishment of Trust Fund (and General Provisions)
- Would create a personal use exception that would authorize a person to cultivate cannabis for personal or family use and not for sale, so long as material produced is grown in personal residence and does not exceed any personal production limits to be set by the Secretary of HHS.
- Would authorize the FDA to develop regulations to be issued within one year of enactment for expedited review of certain cannabis drugs produced by equity operators.
- Would authorize HHS to award grants to public and non-profit private institutions to conduct research on:
- Short-and long-term health effects of cannabis, considering beneficial and harmful effects and public health impacts, with specific emphasis on health effects of cannabis use in at-risk or under researched populations, such as pediatric and older populations, pregnant and breast-feeding women, and heavy cannabis users:
- The pharmacokinetic and pharmacodynamic properties of cannabis, modes of delivery, different concentrations, in various populations, including the dose-response relationships of cannabis and tetrahydrocannabinol or other cannabinoids, as well as consider the harms and benefits associated with understudied cannabis products, such as edibles, concentrates, and topical products;
- That involve well-controlled clinical trials on the potential beneficial and harmful health effects of using different forms of cannabis, such as inhaled (e.g., smoked or vaporized) whole cannabis plant and oral cannabis;
- That seek to characterize the health effects of cannabis on unstudied and understudied health endpoints, such as epilepsy in pediatric populations, symptoms of posttraumatic stress disorder, childhood and adult cancers, cannabis-related overdoses and poisonings, and other high-priority health endpoints;
- That include a workshop to develop a set of research standards and benchmarks to guide and ensure the production of high-quality cannabis research;
- That seek to enable improvements to Federal public health surveillance systems and state-based public health surveillance efforts to inform research on the short- and long-term health effects of cannabis use (both beneficial and harmful effects); and
- That provide support for the development of novel diagnostic technologies that allow for rapid, accurate, and noninvasive assessment of cannabis exposure and impairment.
- Would impose an excise tax on cannabis products at retail of 10% for the year under the bill, which would increase annually by 5% for 5 years. After 5 years, the tax would be levied on a per-ounce rate for cannabis flower, and a per-milligram of THC rate in the case of any cannabis extract. Specialty rates would be set for small as well as large producers. The bill does not require insurance companies to extend coverage to subsidize the cost of cannabis medicine, and layers federal taxes on top of already outrageous state and local taxes imposed on medical cannabis products.
- Would require a federal permit to sell cannabis products at wholesale, which cannabis producers would need to maintain in compliance.
- Would restrict remote sales of cannabis for 1 year after enactment of the bill, and direct the HHS Secretary to issue regulations on the promotion, sale, distribution of cannabis products that occur through other means than a direct, face-to-face exchange between a retailer and consumer in order to prevent the sale of cannabis to minors.
- Would direct the HHS Secretary to issue regulations on cannabis product labeling, as well as product standards.
- Would establish a Cannabis Products Advisory Committee within six months of enactment that would be authorized to review and provide comment on any rules organized by the HHS Secretary before they are promulgated.
- Would modify the federal definition of cannabis and cannabis product.
- Would prohibit sale or distribution of cannabis to a minor, sale or distribution of more than 10 ounces of cannabis, cannabis products that contain alcohol, caffeine or nicotine.
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