The federal marijuana legalization bill passed in a historic vote last week by the U.S. House of Representatives would generate about $13.7 billion in net revenue for the U.S. treasury over the next decade, according to a new report by the Congressional Budget Office (CBO). It would also cut federal prison spending by nearly $1 billion.
Most of the new funds—roughly $8 billion—would come from business taxes on the legal marijuana industry, such as income and payroll taxes. A separate excise tax, initially based on the price of cannabis products, is estimated to yield another $5.7 billion.
“CBO and the staff of the Joint Committee on Taxation estimate that H.R. 3884 would increase revenues, on net, by about $13.7 billion over the 2021-2030 period,” says the nonpartisan report, published Friday.
Known as the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, the House-approved legislation would remove cannabis from the federal Controlled Substances Act, expunge past marijuana-related convictions and require certain criminal cases to be resentenced.
Those changes “would reduce time served by 73,000 person-years” among current and future inmates, the report says. “CBO estimates that provision would result in net savings of about $1 billion over the 2021-2030 period.”
Legalization would also bring additional government costs, the CBO report says, though all spending would be entirely offset by new revenue.
The expected reduction in the federal prison population, for example, would lead to an estimated $636 million in new spending on federal benefits programs, such as Medicare and Medicaid.
“Federal prisoners generally are not eligible for these benefits,” says the report. “By reducing the prison population, CBO estimates, H.R. 3884 would increase the number of federal beneficiaries, compared with current law, and thus increase direct spending for federal benefit programs.”
The $5.7 billion in expected revenue from the marijuana excise tax, meanwhile, would go into the so-called Opportunity Trust Fund. From that, an estimated $3 billion would be spent by the Department of Justice over the 10-year period to provide job training, legal aid and other services to disproportionately impacted communities. The remaining $2.7 billion would go to the Small Business Administration to be used on state and local grants to cannabis-related small businesses that help develop licensing rules.
It wasn’t immediately clear whether the CBO report analyzed the bill as originally introduced last year or included the impacts of new changes made to the legislation last week that would adjust cannabis excise taxes as the market matures. Under the amendment, the excise tax would initially start at 5 percent of a product’s cost, then increase over time to 8 percent and later shift to a weight-based tax.
In any case, supportive lawmakers held up the new CBO score as one more reason to pass the legislation.
“It was sad that my Republican colleagues were unable to understand why we voted to reform our failed prohibition of cannabis. They don’t care about honoring the will of the people and they are unable to grasp the enormity of the racial injustice and damage by selective enforcement against young Black and Brown Americans,” Rep. Earl Blumenauer (D-OR) said in a press release. “But the CBO score may have some other reasons for them. It shows that the MORE Act would reduce 73,000 person-years of prison time. It would increase revenues by $13.7 billion. It would provide $3 billion for job training and legal aid to people harmed by the war on drugs. While doing all of this, it would reduce the deficit by $7.344 billion.”
The new CBO report was a long time coming. The office is supposed to assess the financial impact of most bills that advance out of congressional committees, but it’s been more than a year since the MORE Act won approval from the House Judiciary Committee.
Only a handful of marijuana-related bills have been scored by CBO in the past. Last year, the office said that a proposed marijuana banking bill would save federal money and lead to a $1.4 billion increase in deposits to banks and credit unions starting in 2022, which the office said would rise to roughly $2.5 billion by 2029.
Measures related to marijuana cultivation for research purposes, clinical trials of medical marijuana by the U.S. Department of Veterans Affairs (VA) and letting VA doctors recommend marijuana to patients, meanwhile, were all estimated by CBO in recent years to have little to no effect on the nation’s budget.
While the MORE Act faces an uphill battle in the Senate—some have called the issue a nonstarter unless Democrats gain control of the chamber—legalization proponents have nevertheless cheered the bill’s House passage as a major milestone.
Blumenauer, a longtime champion of cannabis reform, said the bill is “going to make a huge difference for people all across America as Congress starts to catch up to where the American public is.”
Senate Majority leader Mitch McConnell (R-KY), for his part, is one of numerous Republicans in Congress who criticized House leadership for even holding a vote on the measure last week.
This story was updated to include comment from Blumenauer.
Top Pennsylvania Official Restores Marijuana Flag After GOP Lawmakers Allegedly Got It Removed
Lt. Gov. John Fetterman’s (D) marijuana and LGBTQ flags are waving again at his Capitol office after state officials removed them Monday night, allegedly at the behest of certain GOP lawmakers who feel strongly about the activist decor.
The day after their removal, the lieutenant governor proudly announced on Twitter that he’d restored the flags—one rainbow-themed and the other displaying cannabis leaves.
“I really can’t emphasize this enough, my issue isn’t with the individuals that came to take them down. They’re kind of caught in the middle of it so it’s not them,” Fetterman told Marijuana Moment. “But the Pennsylvania GOP exerted enough pressure and made enough drama so they felt that they needed to do something and they took them down. When I realized that, I just put them back up.”
I even had to rehang this one. 🙄 pic.twitter.com/NPuADtb1Lt
— John Fetterman (@JohnFetterman) January 26, 2021
The flags have been an unusual source of controversy for some members of the legislature. In November, Republican lawmakers passed budget legislation that included a provision targeting his cannabis-themed office decor, making it so only the American flag, the Pennsylvania flag and those honoring missing soldiers could be displayed at the Capitol building.
It’s kinda flattering that they changed Pennsylvania law just for me. 🥺👉👈
Speaking of changing laws…
I’ll take them down when we get:
LEGAL WEED 🟩 FOR PA + EQUAL PROTECTION UNDER THE LAW for LGBTQIA+ community in PA.
— John Fetterman (@JohnFetterman) November 20, 2020
“There’s one great way to get them down for good and we can end this,” the lieutenant governor said. And that’s by enacting legislative reform.
“It shouldn’t have to be this way. These are not controversial things. These are very fundamentally American things. It’s freedom-related. It’s individuality-related. It’s jobs. It’s revenue,” he said. “These are not controversial, but these flags are. For the party that thinks it’s A-OK to talk about how an election that was secure was rigged, they sure have a real thin skin when it comes to free speech.”
A spokesperson for the state Department of General Services confirmed to Marijuana Moment that it was tasked with removing the flags and did so “in order to comply with section 1724-E of the fiscal code.” Asked whether lawmakers from the legislature’s Republican majority influenced the recent action, the representative repeated: “All I can say is the Department of General Services removed the flag in order to comply with section 1724-E of the fiscal code.”
Marijuana Moment reached out to the offices of the Senate majority leader and House speaker for comment, but representatives did not respond by the time of publication.
Defying the flag order is par for the course for Fetterman, a longtime marijuana reform advocate who is weighing a run for the U.S. Senate. His enthusiastic embrace of the issue has often put him in the spotlight, and he said he’d take that advocacy to Congress if he ultimately decides to enter the race and is elected.
“I’m the only person that’s actually called out my own party for its failure to embrace it when it is appropriate,” he said, referring to his repeated criticism of the Democratic National Committee’s rejection of a pro-legalization platform. “There has never been—or would ever be—a more committed advocate to ending this awful superstition over a plant for the United States.”
🚨🚨 PENNSYLVANIA *AND* DNC IS BEING LAPPED ON LEGAL WEED BY THE DAKOTAS NOW
— John Fetterman (@JohnFetterman) January 26, 2021
On his campaign website, the lieutenant governor touts his role in leading a listening tour across the state to solicit public input on the policy change. He noted that, following his efforts, Gov. Tom Wolf (D) “announced his support for legalization for the first time.”
It remains to be seen when legalization will happen in Pennsylvania, however. Despite Fetterman and Wolf’s support for legalization and the pressure they’re applying on lawmakers, convincing Republican legislative leaders to go along with the plan remains a challenge.
Fetterman previously told Marijuana Moment that pursuing reform through the governor’s budget request is a possibility. But in the meantime the administration is exploring the constitutionality of issuing “wholesale pardons for certain marijuana convictions and charges.”
Since adopting a pro-legalization position in 2019, Wolf has repeatedly called on the legislature to enact the policy change. He’s stressed that stressed that marijuana reform could generate tax revenue to support the state’s economic recovery from the coronavirus pandemic and that ending criminalization is necessary for social justice.
In September, he took a dig at the Republican-controlled legislature for failing to act on reform in the previous session. And in August, he suggested that the state itself could potentially control marijuana sales rather than just license private retailers as other legalized jurisdictions have done.
Fetterman previously said that farmers in his state can grow better marijuana than people in New Jersey—where voters approved a legalization referendum in November—and that’s one reason why Pennsylvania should expeditiously reform its cannabis laws.
He also hosted a virtual forum where he got advice on how to effectively implement a cannabis system from the lieutenant governors of Illinois and Michigan, which have enacted legalization.
Shortly after the governor announced that he was embracing the policy change, a lawmaker filed a bill to legalize marijuana through a state-run model.
A majority of Senate Democrats sent Wolf a letter in July arguing that legislators should pursue the policy change in order to generate revenue to make up for losses resulting from the COVID-19 pandemic.
Photo courtesy of Twitter/John Fetterman.
Hawaii Could Legalize Psychedelic Mushroom Therapy Under New Senate Bill
Hawaii could legalize the use of psychedelic mushrooms for therapy under a newly filed bill in the state legislature.
The measure, if approved, would direct the state Department of Health to “establish designated treatment centers for the therapeutic administration of psilocybin and psilocyn,” two psychoactive substances produced by certain fungi.
It would also remove the two compounds from the state’s list of Schedule I controlled substances and create a seven-person psilocybin review panel to assess the impacts of the policy change.
Few other specifics are provided in the bill, SB 738, introduced in the state Senate on Friday. It doesn’t specify who would qualify for the therapy, for example, or how precisely the drugs—which remain federally illegal—would be administered. The legislation simply says the Department of Health “shall adopt rules” in accordance with state law.
The new legislation comes less than a year after Hawaii lawmakers introduced bills to begin studying the therapeutic use of psychedelic mushrooms with the goal of eventually legalizing them, though those measures did not advance.
Entheogens—including other substances like ayahuasca and ibogaine—have emerged as a promising treatment for severe depression, anxiety and other conditions, although research remains ongoing.
In November, voters in Oregon approved a ballot measure to legalize psilocybin therapy that the state is now in the process of implementing.
The new Hawaii bill was introduced by Sens. Stanley Chang, Laura Clint Acasio, Les Ihara Jr. and Maile Shimabukuro, all Democrats. It has not yet been scheduled for a hearing, according to the state legislature’s website.
Marijuana Moment is already tracking more than 400 cannabis, psychedelics and drug policy bills in state legislatures and Congress this year. Patreon supporters pledging at least $25/month get access to our interactive maps, charts and hearing calendar so they don’t miss any developments.
Learn more about our marijuana bill tracker and become a supporter on Patreon to get access.
The Hawaii proposal is one of a growing number of broader reform bills to have been introduced across the country this year as the debate on drug policy moves beyond marijuana. A measure introduced in New York earlier this month would remove criminal penalties for possessing small amounts of any controlled substance, instead imposing a $50 fine. Similar measures are expected to be introduced in California and Washington State this year.
A Florida lawmaker recently announced plans to introduce legislation to legalize psilocybin for therapeutic purposes in the state.
Lawmakers in New Jersey last month sent a bill to Gov. Phil Murphy (D) that would reduce criminal charges for the possession of psilocybin, but so far Murphy hasn’t signed the measure.
Voters, meanwhile, have been broadly supportive of drug reform measures in recent years. In addition to the psilocybin. measure, Oregon voters in November also approved an initiative to decriminalize possession of all drugs. Washington, D.C. voters overwhelmingly enacted a proposal to decriminalize the possession of psychedelics.
Despite the growing discussion of drug reform at statehouses across the country, some high-profile advocates are setting their sights on the 2022 election. Dr. Bronner’s CEO David Bronner, a key financial backer of successful reform efforts in Oregon, told Marijuana Moment last month that he’s expecting both Washington state and Colorado voters will see decriminalization or psilocybin therapy on their 2022 ballots.
Meanwhile, a new advocacy group is pushing Congress to allocate $100 million to support research into the therapeutic potential of psychedelics.
Photo courtesy of Wikimedia/Workman
Minnesota Governor Urges Lawmakers To Pursue Marijuana Legalization Amid Budget Talks
The governor of Minnesota on Tuesday implored the legislature to look into legalizing marijuana as a means to boost the economy and promote racial justice.
During a briefing focused on his budget proposal for the 2022-23 biennium, Gov. Tim Walz (D) was asked whether he is open to allowing sports betting in the state to generate tax revenue. He replied he wasn’t closing the door on that proposal, but said he is more interested in seeing lawmakers “take a look at recreational cannabis.”
Not only would tax revenue from adult-use marijuana “dwarf” those collected through sports betting, he said, but legalization would also help address “the equity issue and, quite honestly, the racial impact of our cannabis laws.”
Watch the governor discuss marijuana legalization below:
“I will say this, I will certainly leave open that possibility. Our neighboring states have done both of those things,” Walz said of legalizing sports gambling and cannabis. “I obviously recognize that that’s not a 100 percent slam dunk for people, and they realize that there’s cost associated with both. But my message would be is, I don’t think this is the time for me to say I’m shutting the door on anything.”
The Minnesota governor did say in 2019, however, that he was directing state agencies to prepare to implement reform in anticipation of legalization passing.
Earlier this month, the House majority leader said he would again introduce a bill to legalize marijuana in the new session. And if Senate Republicans don’t go along with the reform, he said he hopes they will at least let voters decide on cannabis as a 2022 ballot measure.
Heading into the 2020 election, Democrats believed they had a shot of taking control of the Senate, but that didn’t happen. The result appears to be partly due to the fact that candidates from marijuana-focused parties in the state earned a sizable share of votes that may have otherwise gone to Democrats, perhaps inadvertently hurting the chances of reform passing.
House Speaker Melissa Hortman (D) said this month that “Senate Republicans remain the biggest obstacle to progress on this issue.”
“Minnesota’s current cannabis laws are doing more harm than good,” she told The Center Square. “By creating a regulatory framework we can address the harms caused by cannabis and establish a more sensible set of laws to improve our health care and criminal justice systems and ensure better outcomes for communities,” she said.
Senate Majority Leader Paul Gazelka (R), for his part, said that while he would be “open to expanding medical use or hearing criminal justice reforms,” he doesn’t “believe fully legalized marijuana is right for the state.”
“Other states that have legalized marijuana are having issues with public safety,” he argued, “and we are concerned that we haven’t fully seen how this works with employment issues, education outcomes and mental health.”
Last month, the Minnesota House Select Committee On Racial Justice adopted a report that broadly details race-based disparities in criminal enforcement and recommends a series of policy changes, including marijuana decriminalization and expungements.
Another factor that might add pressure on lawmakers to enact the reform is the November vote in neighboring South Dakota to legalize adult-use cannabis.
Also next door, Wisconsin Gov. Tony Evers (D) is pushing lawmakers to enact marijuana reform and recently said that he is considering putting legalization in his upcoming budget request.
Photo courtesy of Philip Steffan.