They say that politics makes for strange bedfellows, and nowhere is that more true than in the unlikely coalition of lawmakers working to reform the nation’s cannabis laws. In recent years, public support for legalizing cannabis has increased and legislators have begun introducing more bills than ever. While legalization legislation languished during the last Congress as Republican leaders remained steadfast in their opposition to any changes, advocates are optimistic that Democratic control of the House could finally bring significant reform. That, coupled with mounting pressure to clean up the disparity between state and federal laws, could propel incremental changes through the Republican-controlled Senate.

There are signs that cannabis reform may receive bipartisan support. The creation of the Congressional Cannabis Caucus was driven two years ago by the rise in states, both red and blue, with some type of legal marijuana. The group has since reorganized for this Congress, adding left-leaning Barbara Lee of California and moderate Republican David Joyce of Ohio to its leadership team of Earl Blumenauer, an Oregon Democrat, and Don Young, an Alaska Republican. The fact that they are a somewhat odd collection of lawmakers has not escaped the group’s attention, but they have said that they do not expect this to prevent them from working together to get common-sense bills onto the House floor (and possibly through the Senate).

The various bipartisan bills are designed to address banking, tax, and criminal enforcement conflicts that have emerged as more and more states license marijuana dispensaries despite federal law. Among the unsolved issues are: (1) the lack of protection from federal prosecution for dispensaries in the ten states that allow recreational marijuana; (2) barriers to medical research; (3) regulations that make it difficult for state-approved dispensaries to use banks, forcing them to be all-cash businesses; and (4) a tax code that prevents shop owners from deducting business expenses. In addition, veterans in states that have legalized medical marijuana also cannot obtain a prescription from their Veterans Affairs doctors under current law.

The Marijuana Justice Act, recently re-introduced by Cory Booker in the Senate and Representative Lee in the House, would (1) remove marijuana from the schedule of controlled substances, thus de-criminalizing it at the federal level; (2) expunge the records of anyone convicted in a federal court of marijuana possession; and (3) establish a fund that would assist communities most impacted by the “war on drugs” with job training and similar programs. Although the legislation received no Republican co-sponsors, a virtual Who’s Who of 2020 Democratic presidential candidates signed on in the Senate, including Cory Booker of New Jersey, Kirsten Gillibrand of New York, Kamala Harris of California, Bernie Sanders of Vermont, and Elizabeth Warren of Massachusetts. Though the bill has long odds of being taken up in the Republican-controlled Senate, Representative Lee hopes to convey to her fellow lawmakers that reform is no longer about whether members actually support cannabis use, but rather protecting people who comply with state legal cannabis laws from federal prosecution.

The legislation that appears to have the best chance of becoming law this Congress is the STATES Act, reintroduced in the Senate by Senators Cory Gardner and Elizabeth Warren on April 4, 2019 and in the House by Representatives Blumenauer and Joyce. The STATES Act would leave cannabis on Schedule I, but would amend the Controlled Substances Act so that its marijuana provisions no longer apply to individuals acting in compliance with state or tribal laws. The Act also addresses financial issues caused by federal prohibition by providing that state-compliant transactions do not generate “criminal proceeds” for purposes of money laundering prosecutions, which would give banks the legal protection they need to do business with marijuana companies. The bill would also allow individuals acting in compliance with state or tribal laws to begin deducting business expenses on their tax returns. Although it has bipartisan sponsorship, it still faces steep opposition from conservative “law-and-order” legislators such as Senate Judiciary Chairman Lindsey Graham. Those legislators may be moved, however, by Attorney General Barr’s April 10, 2019 statements on marijuana enforcement. Although his preference would be one unified law prohibiting marijuana nationwide, he favored state-deferential legislation like the STATES Act to the current status quo of disparate state and federal enforcement regimes.

Another avenue of reform may be must-pass spending bills. A key legal reason medical marijuana dispensaries are insulated from federal law enforcement is that appropriators have added a provision to the last five Department of Justice spending bills restricting DoJ from using appropriated funds to prevent states from implementing state laws that allow the use, distribution, possession, or cultivation of medical marijuana. Members on House and Senate appropriations committees have proposed additional amendments, including allowing the Department of Veterans Affairs to prescribe medical marijuana in states that have legalized it and encouraging the Drug Enforcement Administration to process applications for companies that want to grow marijuana for research purposes. To date, however, neither provision has made it into law.

Public attitudes towards cannabis are changing. However, Congress is a different beast. The bills introduced to date, including the Marijuana Justice Act and the STATES Act, contain certain ideas that factions in both parties support, although passage of a comprehensive and radical reform bill like the Marijuana Justice Act is unlikely, at least in the near future. Reform is much more likely to take the form of less controversial changes involving protections for state-compliant businesses.


Bruce Linskens is a Senior Analyst for International and Legislative Affairs in Baker McKenzie's Washington office. He assists clients with compliance matters extending into federal legislative, regulatory, and policy issues.