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Marijuana Advocates Raise Concern About Social Equity Problem In House-Passed Legalization Bill



The House passage of a bill to federally legalize marijuana this month marked a historic step forward for reform advocates. Yet amid the celebration, there are increasing concerns about certain language that was added to the legislation at the last minute that activists say undermines their social equity goals.

Days before the floor vote, the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act was amended in the form of a House Rules Committee Print. While the main thrust of the bill remained intact, including a tax to fund programs to repair the harms of the drug war, a provision was added requiring a federal permit to operate a “cannabis enterprise”—along with restrictions that could ban people with prior marijuana convictions from being eligible.

That runs counter to the principles of social equity that advocates have been pushing for, arguing that it’s not enough to simply end prohibition and that communities most impacted by the enforcement of the war on drugs need to be specifically uplifted in the newly legal market.

There are some nuances to the language, but in general what it says is that, under federal regulations, a permit must be issued in order for certain marijuana businesses to operate. There are a series of considerations that go into a permit approval, but the one advocates view as the most problematic states that it can be suspended or revoked if a person has a past or current legal proceeding related to a felony violation of any state or federal cannabis law.

That would raise questions about their ability to “maintain operations in compliance with this chapter,” the text of the bill says.

It would not be an automatic revocation, however, as the government would need to “issue an order, stating the facts charged, citing such person to show cause why their permit should not be suspended or revoked.” Then a hearing would be held to determine in the permit holder can show “cause why their permit should not be suspended or revoked.”

Read the language in question below:

SEC. 5923. PERMIT.
(a) Issuance.—A person shall not engage in business as a cannabis enterprise without a permit to engage in such business. Such permit, conditioned upon compliance with this chapter and regulations issued thereunder, shall be issued in such form and in such manner as the Secretary shall by regulation prescribe. A new permit may be required at such other time as the Secretary shall by regulation prescribe.

(b) Suspension Or Revocation.—

(1) SHOW CAUSE HEARING.—If the Secretary has reason to believe that any person holding a permit—

(A) has not in good faith complied with this chapter, or with any other provision of this title involving intent to defraud,

(B) has violated the conditions of such permit,

(C) has failed to disclose any material information required or made any material false statement in the application for such permit,

(D) has failed to maintain their premises in such manner as to protect the revenue, or

(E) is, by reason of previous or current legal proceedings involving a felony violation of any other provision of Federal or State criminal law relating to cannabis, not likely to maintain operations in compliance with this chapter,

the Secretary shall issue an order, stating the facts charged, citing such person to show cause why their permit should not be suspended or revoked.

The bill does not define which departmental secretary would be responsible for making the permitting decision as outlined in the text, as that was left out in a drafting error. There are mentions of at least three different secretaries—health and human services, transportation and treasury—throughout the legislation.

There’s another caveat to this, as it doesn’t appear the permit requirement would apply to retail dispensaries. Only businesses that meet the definition of a “cannabis enterprise” would be affected, and that includes “a producer, importer, or export warehouse proprietor,” with producer being defined as “any person who plants, cultivates, harvests, grows, manufactures, produces, compounds, converts, processes, prepares, or packages any cannabis product.”

But even so, advocates are pushing to have the language removed. They point out that, because marijuana criminalization has disproportionately impacted people of color despite comparable usage rates with white people, the policy is inherently discriminatory.

“The felony exclusion provision was not just concerning, for social equity licensees and the organizations and communities that support, there was genuine fear and concern the exclusion would send signals to investors, companies and state and local lawmakers that could have an immediate chilling impact on investment, hiring and support for social equity operators and programs,” Brandon Banks, a board member of the Minority Cannabis Business Association (MCBA), told Marijuana Moment.

MCBA Vice President Kaliko Castille said the organization “worked with House leadership to make clear the intent of Congress to ensure those most impacted by cannabis prohibition would have access to the legal cannabis industry instead of continuing to face criminal penalties for activities generating billions and that any provisions to the contrary would not stand in future legislation.”

Overall, the legislation would federally deschedule cannabis, and those with prior convictions would have their records expunged. The descheduling provisions would be retroactive, too.

The reason the language at issue got into the MORE Act is because much of the text of a separate, previously introduced cannabis reform bill was inserted in the Rules Committee Print shortly before the floor vote. And its inclusion in that legislation, the Marijuana Revenue and Regulation Act, is somewhat curious given that the bill’s lead sponsor is Rep. Earl Blumenauer (D-OR), a fierce advocate for legalization who is intimately familiar with social equity concerns as the co-chair of the Congressional Cannabis Caucus.

When it came to Blumenauer’s attention, he attempted to get it removed from the MORE Act, but there wasn’t enough time between the Rules hearing and the floor vote, a spokesperson for the congressman said. She added that he has since secured a commitment from House Ways & Means Chairman Richard Neal (D-MA) to have the language nixed the next time the bill comes up.

In a letter submitted to the Congressional Record, Blumenauer touted the progress that the legislation represents but added a caveat about the particular section that advocates have raised concerns about.

“No bill is perfect, and the MORE Act contains a provision that is contrary to our legislative intent,” he wrote. “Without hesitation, I am committed to correcting this language to ensure that the millions of Americans, especially Black and Latino people, who have been most harmed by cannabis prohibition can participate equally in this emerging industry. Equity, inclusion and opportunity are fundamental values that must be at the center of all federal cannabis legislation.”

“This is not the end of the story, it’s the beginning of the next chapter,” he said. “This is a fight for racial justice, economic justice, and freedom. This policy is long-overdue.”

It was an oversight that advocates and industry stakeholders, who meticulously review and help draft cannabis bills, share the blame for, Justin Strekal, political director of NORML, acknowledged to Marijuana Moment.

Blumenauer’s office did not provide a response to an inquiry about why the provisions was added to his original bill, the first version of which was filed in 2017. A representative for Sen. Ron Wyden (D-OR), another champion of cannabis reform who sponsored the Senate companion version of the legislation, did not immediately respond to a request for comment on the origins of the marijuana felony ban language.

Queen Adesuyi, policy manager of national affairs for DPA, told Filter that she understands the concerns about “problematic provisions” of the revised MORE Act—but that “it was really difficult to walk away from the entire vehicle because of the longer-term implications that we’re able to see, in terms of our ability to actually move anything at all.”

Of course, it should be noted that while the MORE Act cleared the House, it’s seriously unlikely to get a vote in the GOP-controlled Senate, which is run by anti-marijuana Senate Majority Leader Mitch McConnell (R-KY), before the end of the current Congress. So if Democrats take the bill back up next session, they will have an opportunity to address advocates’ concerns. And Strekal said they have a “commitment” from allies on the Hill to remove the problematic language.

Shaleen Title, a commissioner on the Massachusetts Cannabis Control Commission who has focused on equity issues, wrote in a blog post earlier this month that while advocates are “encouraged by any forward movement on cannabis criminal justice reform, we strongly believe that we will not get racial justice without economic justice.”

“We very much appreciate your support of cannabis legalization and restorative justice and look forward to the opportunity to work with you on changes to the Act that will support the ground breaking cannabis equity work already occurring across the country,” she wrote to lawmakers on behalf of the Cannabis Regulators of Color Coalition.

Other than the permit provision, the bill was also revised before reaching the floor with a series of mostly technical amendments, though there was one significant change as it relates to the proposed tax structure for marijuana.

As now structured, the MORE Act would make it so cannabis would be federally taxed at five percent for the first two years after implementation and then increased by one percent each year until reaching eight percent. After five years, taxes would be applied to marijuana products based on weight rather than price.

The bill would also create a pathway for resentencing for those incarcerated for marijuana offenses, as well as protect immigrants from being denied citizenship over cannabis and prevent federal agencies from denying public benefits or security clearances due to its use.

A new Cannabis Justice Office under the Justice Department would be responsible for distributing funds providing loans for small cannabis businesses owned and controlled by socially and economically disadvantaged individuals. The bill also seeks to minimize barriers to licensing and employment in the legal industry.

It would also establish a Community Reinvestment Grant Program. Tax dollars appropriated to that program would go to job training, legal aid for criminal and civil cases such as those concerning marijuana-related expungements, literacy programs and youth recreation and mentoring services, among other programs.

Some advocates also took issue with other late changes that stipulate that the heads of the Transportation Department and Coast Guard may continue to include marijuana in drug testing programs for safety-sensitive positions and clarify that the expungement provisions only apply to “non-violent marijuana offenders” and bars so-called “kingpins” from obtaining expungements.

“Now that we have the precedent of a bill passing to end marijuana prohibition in the House of Representatives under Democratic control—and with Democratic control returning in the next session—I feel confident that we can improve the bill,” Strekal said. “And it is our hope that working with more stakeholders, we will make many improvements in the bill such as including a post-prohibition regulatory structure that will provide greater certainty to new emerging markets and promote standardization of labeling and weights and metrics as more and more states legalize marijuana in the future.”

Overall, the passage of the legalization legislation could send a strong signal to the incoming presidential administration, and it sets the stage for similar action in 2021—especially if Democrats win control of the Senate after two runoff elections in Georgia next month.

Given President-elect Joe Biden’s former approach to championing punitive anti-drug legislation as a senator and his ongoing obstinance on marijuana legalization at a time when polls show that a clear majority of Americans favor the policy change, there remains some skepticism about his willingness to make good on his campaign promises to achieve more modest reforms he has endorsed, such as decriminalizing possession and expunging records.

A transition document the incoming Biden-Harris administration released last month left out mention of those cannabis pledges. While Vice President-elect Kamala Harris is sponsoring the MORE Act in the Senate, she’s indicated that she would not necessarily push the president-elect to adopt a pro-legalization position.

That said, the president-elect has conceded that his work on punitive anti-drug legislation during his time in Congress was a “mistake.”

For his part, Blumenauer told Marijuana Moment in August that “the Biden administration and a Biden Department of Justice would be a constructive player” in advancing legalization.

Meanwhile, the Congressional Research Service released an analysis of the MORE Act last month, finding that the bill’s passage could “reverse” the current cannabis policy gap that exists between states and the federal government.

Read Blumenauer’s submission to the Congressional Record on the MORE Act below:

Blumenauer MORE Act by Marijuana Moment

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Photo courtesy of Mike Latimer.

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