Marijuana

Is 2021 The Year Marijuana Becomes Federally Legal? Probably Not.

The progress made in the past few months won’t likely carry over at the federal level. 

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Thus far, 2021 has proven to be a favorable year for the cannabis industry. In the past six months, we have seen a great deal of support for cannabis reforms, including state-by-state legalization of recreational marijuana as well as the revival of two major federal bills, the Marijuana Opportunity Reinvestment and Expungement Act (the MORE Act of 2021) and the Secure and Fair Enforcement Banking Act (the SAFE Banking Act of 2021). Unfortunately, the progress made in the past few months won’t likely carry over at the federal level.

The following is an oversimplified summary of what each bill would do if enacted and the reasons why this won’t likely happen this year:

The MORE Act

The MORE Act proposes to remove marijuana from the federal Controlled Substances Act and adopt various criminal and social justice reforms, including the expungement of prior marijuana convictions.

The MORE Act was first introduced in 2019 but died in the Republican-controlled Senate for two consecutive years. At the end of May, House Representative Jerry Nadler (D-NY) reintroduced the bill with a few notable changes, including removing language that previously barred individuals with prior criminal marijuana convictions from engaging in lawful cannabis business activities.

The MORE Act of 2021 has yet to be scheduled for a vote but has already received resounding support from social justice advocacy groups, such as the ACLU, as well as e-commerce conglomerate, Amazon. While this support for the MORE Act of 2021 could compel other companies, Congress, and the Executive to broaden support for federal legalization, it is unlikely the bill will become law.

Although the bill is expected to pass in the House, it will probably die in the Senate — yet, again. This forecast is based on the fact that the bill needs 60 votes to pass, which represents a vote from every Democrat, plus 10 Republicans. However, the progressive language of the new bill takes an important step toward addressing the harms of the War on Drugs, an issue that won’t likely appeal to the reluctant centrist Democrats and the 10 Republicans needed to pass the bill.

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The SAFE Banking Act

Also first introduced in 2019, the SAFE Banking Act aims to shield banks and credit unions that provide services to cannabis-related companies from federal penalties.

The SAFE Banking Act of 2019 met the same fate as the MORE Act in that it didn’t manage to pass former Senate Majority Leader Mitch McConnell’s Senate (R-KY). Reintroduced in March 2021 with strong bipartisan support, the bill rapidly passed in the House but has since been sitting in the Senate.

Senate Majority Leader Chuck Schumer (D-NY), unlike his predecessor, is in favor of cannabis reforms and legislation; however, the Senate leader has expressed reservations about the cannabis legislation, indicating he, along with Sens. Rod Wyden (D-OR) and Cory Booker (D-NJ), view the SAFE Banking Act as too narrow. As such, the senators are working on a more comprehensive bill that would build on the MORE Act and the SAFE Banking Act, would further address social inequalities, and, in the words of the three Senators, “ensure restorative justice, public health and implement responsible taxes and regulations.”

Senate Banking Committee Chair Sherrod Brown (D-OH) has expressed similar concerns about the SAFE Banking Act, stating that marijuana banking reform should be addressed with sentencing reform. Brown’s reluctance to advance the legislation was recently confronted by Sens. Jeff Merkley (D-OR) and Steve Daines (R-MT), who issued a letter to Brown and Ranking Member Pat Toomey (R-PA), urging them  to schedule a markup for the bill, which they explained would help address an urgent public safety issue. Indeed, fear of federal sanctions has kept many financial institutions from working with the industry, forcing marijuana companies to operate on a cash basis, making them vulnerable to crime.

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So, given this collective pushback in the Senate, the SAFE Banking Act seems more likely to pass once combined with a broader legalization measure. But only time will tell.

What is clear for the time being is that the growing support of state governments, social justice groups, and influential corporations are fueling a growing appetite for social reform and, ultimately (some day), the federal legalization of marijuana.

Nathalie practices out of Harris Bricken’s Portland office and focuses on the regulatory framework of hemp-derived CBD (“hemp CBD”) products. She is an authority on FDA enforcement, Food, Drug & Cosmetic Act and other laws and regulations surrounding hemp and hemp CBD products. She also advises domestic and international clients on the sale, distribution, marketing, labeling, importation and exportation of these products. Nathalie frequently speaks on these issues and has made national media appearances, including on NPR’s Marketplace. For two consecutive years, Nathalie has been selected as a “Rising Star” by Super Lawyers Magazine, an honor bestowed on only 2.5% of eligible Oregon attorneys.  Nathalie is also a regular contributor to her firm’s Canna Law Blog.

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