Global Ganja Report

It's been a week since Senate Majority leader Chuck Schumer of New York, joined by Sen. Cory Booker (D-NJ) and Sen. Ron Wyden (D-OR), unveiled much-anticipated draft legislation to legalize cannabis at the federal level, calling it a "long overdue" move "to right the wrongs of the failed war on drugs." The proposed Cannabis Administration & Opportunity Act would remove the plant from the Controlled Substances Act, and allow states to craft their own cannabis policies as they do with alcohol. It would also create a federal regulatory framework and impose an excise tax for cannabis products. It includes measures that would expunge prior convictions and allow those serving time for applicable crimes to petition for resentencing.

Unexpectedly, cannabis stocks actually fell on the big news. On the day of the announcement, July 15, the US Marijuana Index dropped 2.8%, while the Canadian Marijuana Index fell 5.3%.

Speaking to Benzinga, Cantor Fitzgerald’s Pablo Zuanic offered possible reasons for this reaction. He cited Schumer's acknowledgment that the current draft may not garner enough votes to pass in the Senate. He also noted White House Press Secretary Jen Psaki's unenthused response to Schumer's plan; she said that President Biden has not endorsed the draft bill, and prefers an incremental decriminalization.

To help Schumer's proposal get approved, Zuanic said that the possession limit should be reduced from 10 pounds to 20 ounces. However, this is slightly misleading. As a Prohibition Partners breakdown of the proposed legislation states: "A maximum of 10 ounces to be sold in any one transaction; a maximum of 10 pounds to be handled by anyone without an appropriate licence."    

Zuanic also called for the proposed federal excise tax to be capped at 15% for the first five years. The draft now calls for the tax to be increased by increments to 25% by the fifth year. After that, it foresees taxation on the basis of THC content—an idea already being met with skepticism by the cannabis industry. (More at National Law Journal)
 

Graphic: DRCNet

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