The MORE Act's Controversial Licensing Provisions
by Omar Figueroa, originally published at www.omarfigueroa.com
On Friday, December 4, 2020, the United States House of Representatives passed H.R. 3884, known as the Marijuana Opportunity Reinvestment and Expungement Act of 2020 (MORE Act.) This historic bill aimed to decriminalize and deschedule cannabis, to provide for reinvestment in persons adversely impacted by the War on Drugs, to provide for expungement of federal cannabis offenses, and “for other purposes.” It is these “other purposes” that are of concern here.
The House Committee on Rules has a helpful web site with links to the video of the vote as well as the text. Several versions of the text are presented; perhaps the most illuminating is a Comparative Print of the text which can be used to compare the former version of H.R. 3884 (as reported by the Committee on the Judiciary) with the amended version printed by the Rules Committee (Print 116-67). The former version did not contain any provisions for federal licenses. The amended version contains licensing provisions which are controversial precisely because, contrary to the stated purpose of the MORE Act, they exclude persons adversely impacted by the War on Drugs.
The MORE Act is divided into several sections, such as Section 3, which would retroactively decriminalize and deschedule cannabis from the Controlled Substances Act, and Section 10, which pertains to the resentencing and expungement of convictions for federal cannabis offenses. Section 5 is of concern here.
While the previous version of Section 5 provided for the “Creation of Opportunity Trust Fund and imposition of tax on cannabis products”, the amended version increases the federal excise tax from 5% to 8% over a period of five years (§ 5901) , adds a $1,000 federal occupational tax on any “person engaged in business as a producer or an export warehouse proprietor” (§ 5911), and requires a federal permit and bond “in such form, amount, and manner as the Secretary shall by regulation prescribe.” (§ 5921). The Secretary referred to is the Secretary of the Treasury. In practical terms, the amended MORE Act would give tremendous power to former UC Berkeley professor Janet Yellen, selected to be Secretary of the Treasury by President-Elect Joe Biden.
Given that the previous version of Section 5 of the MORE Act treated cannabis products as tobacco products (former § 9512), this new federal regulatory regime appears similar to the federal regulatory regime for tobacco products, which is overseen by two bureaus within the Department of the Treasury: the Alcohol and Tobacco Tax and Trade Bureau (TTB) and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF).
Section 5 contains controversial provisions that result in discrimination against victims of cannabis prohibition. For example, § 5922, which pertains to applications for a federal cannabis permit, states that an application may be rejected and a permit denied if the Secretary of Treasury finds that the legal person (including in the case of a corporation, any officer, director, or principal shareholder) 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 or cannabis products, not likely to maintain operations in compliance with this chapter.”
The reference to “this chapter” is a reference to Section 5 of the MORE Act, which would add a new Chapter 56 to Subtitle E of the Internal Revenue Code.
Similarly, § 5923, which pertains to suspension or revocation of federal cannabis permits, states that if the Secretary of Treasury has reason to believe that any person holding a federal cannabis permit “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,” then the Secretary of Treasury shall issue an order to show cause requiring the licensee to demonstrate why the permit should not be suspended or revoked, with the burden on the permit holder.
These provisions are controversial for many reasons. First, the language is overbroad, and it is not limited to criminal convictions. Anyone who has been enmeshed in a “previous or current legal proceeding involving a felony violation of Federal or State criminal law relating to cannabis” (even if the legal proceeding resulted in an acquittal or dismissal of charges) would be seen as suspect. Such language would encompass individuals facing a situation where no criminal charges of any kind were filed after an arrest, but an asset forfeiture proceeding alleging felony violations was initiated and in the end dismissed with the return of all seized assets.
Second, there is no time limit on these “legal proceedings.” Legal proceedings which are decades old could result in a permit denial, or if a permit is obtained, in suspension or revocation.
Third, the MORE Act purports to expunge cannabis convictions in order to remedy the wrongs of the War on Drugs, yet these provisions would come with collateral consequences which would effectively disqualify cannabis victims of the War on Drugs from obtaining federal permits for activity considered federally lawful. These provisions are extremely counterproductive and would compound the damage of cannabis prohibition.
Fourth, these provisions do nothing to screen out those “not likely to maintain operations in compliance” with the new Chapter 56, as they unfairly target those involved in “legal proceedings” relating to cannabis offenses. Someone with criminal convictions for violations such as methamphetamine manufacturing, cocaine trafficking, or heroin distribution, would not be affected by the current language.
In conclusion, Section 5 of the amended MORE Act needs to be amended. Rather than discriminate against those peaceful individuals who at some point in their lives have been targeted by the War on Drugs because of cannabis, Section 5 of the MORE Act should clarify that no permit application should be denied, and no adverse action taken against a permit holder, on the basis of legal proceedings involving violations of Federal or State criminal law relating to cannabis. Freeing the victims of cannabis prohibition from these unfair collateral consequences would advance the MORE Act’s goal of assisting those adversely impacted by the War on Drugs.
This information is provided as public educational service and is not intended as legal advice. For specific questions regarding cannabis and hemp laws or legislation such as the MORE Act, please contact the Law Offices of Omar Figueroa at 707-829-0215 or email@example.com.