420 Bill To Legalize Cannabis Hits Congress – Here’s What’s Really Going On

The journey toward full legalization of cannabis inches closer to the finish line as two bills within the past month have been introduced in the Senate. Both bills, recognizably named after the long-running pot-smoker code of “420,” aim to remove marijuana from the Controlled Substance Act and aggressively regulate the business side of cannabis.

Introduced in early January by Oregon’s 3rd District Congressman, Earl Blumenauer (D), the H.R.420 Bill plans to decriminalize marijuana at the federal level and implement laws that regulate it similar to alcohol. A month later another Democrat from Oregon, Senator Ron Wyden, announced the S.420 that dived deeper into an amendment of the IRS tax code of 1986, which regulates marijuana finance laws.

How will the Bills Affect the Marijuana Industry?

Cannabis legalization isn’t as simple as allowing people to smoke it. The 420 Bill first demands that the Drug Enforcement Administration remove it from its list of dangerous schedule I substances within 60 days of it passing. Even though this would make cannabis legal, sales and distribution laws would still be regulated by the state. So, states, where marijuana is illegal or only sell medical marijuana, would not be forced to sell cannabis.

Those states that do consume medical marijuana and recreational cannabis would be subject to an excise tax on businesses. This would increase product prices similar to alcohol and tobacco. Permits would also have to be obtained for the sale of cannabis while the labeling of buds would need to abide by the FDA (Food and Drug Administration) standards.

Making Cannabis Business Easier

It sure sounds like regulation and taxation will be a pain for the marijuana industry, but it won’t all be permits and penalties. The diverse state laws and federal blockades brought on by prohibition stunted the growth of many cannabis businesses. With legalization, the 420 legislation, will open of banking and credit card opportunities, remove advertising limitations, and allow tax deductions for cannabis businesses.

With a growing market resulting from state legalization, the net worth of the cannabis industry is set to reach $146.4 billion by 2025. But, this can only happen if the roadblocks are cleared by federal legalization.

Who Supports Cannabis Legalization?

A Gallup poll from 2018 shows that 2 out 3 Americans now support cannabis legalization. More importantly in the case of the 420 bill, the U.S. government’s support for legalizing marijuana has increased this past year. Republican endorsement has reached 53%, Democrats, at 75%, and independents at 71%. This is good news for the bill as it first needs to pass the Senate. If it gets past the Republican Senate, then it can easily win the vote in House of Representatives that has a democratic majority. Finally, getting the president to sign the bill might be its biggest feat.

What are the Chances of the Bill Passing?

Even though support for legalization is high among the populace and government representatives, the chances of the entire bill being passed is slim. According to govtrack.us, the two 420 bills have a 2-3% chance of passing. But, do not get discouraged as this is a common negotiation tactic. Both Oregon representatives have a plan of slowly implementing sections of the bill.

For instance, Senator Wyden introduced two other legislative bills, S.421 and S.422. The first aims to “reduce the gap between Federal and State marijuana policy.” This means allowing cannabis business banking options, dissolving criminal records, removing advertisement restrictions, giving medical marijuana options to veterans, and protecting the deportation of immigrants over marijuana charges. The S.422 would remove the restrictions of allowing tax deductions for cannabis businesses.

While the full 420 legislation might not pass all at once, it is highly likely that baby steps (proven in the past with cannabis reform) using new federal regulation and fair taxation will lead to it.

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