Congress Rethinking Marijuana; ETFs May Benefit

July 08, 2019

On Wednesday, July 10, the U.S. House of Representatives will take up the question of how to end the longstanding federal criminalization of cannabis, potentially clearing the way for marijuana ETFs to attract billions in new investment assets.

The Judiciary Crime, Terrorism and Homeland Security subcommittee hearing—serendipitously scheduled the day after ETF.com's "The Case For Cannabis ETFs" webinar (sign up at the “Register Today” link)—will be effectively the first congressional conversation on how to end the federal prohibition on marijuana.

4 Proposals To Decriminalize Marijuana

The committee will likely discuss several extant legislative proposals, including the STATES Act, the Marijuana Justice Act, the Marijuana Freedom and Opportunity Act and the Ending Federal Marijuana Prohibition Act.

Each of these bills, if passed, would have different effects, though all four would remove marijuana from the list of Schedule 1 drugs that are federally outlawed for any usage.

The Ending Federal Marijuana Prohibition Act, the narrowest of the four proposals, would simply eliminate marijuana's status as a controlled substance and do away with the felony offenses surrounding its use, sale or possession.

The STATES Act would do this and also explicitly allow individual states to establish their own laws regarding marijuana sale, possession and usage without federal intervention, thus encoding the current de facto paradigm into federal law.

The Marijuana Freedom and Opportunity Act has a similar impact to the STATES Act, while also expunging low-level marijuana convictions and providing funding for minority- and women-owned marijuana businesses.

The Marijuana Justice Act would also automatically expunge criminal records of use- and possession-related crimes; additionally, it would establish a community fund to reinvest money toward the communities of color most impacted by the war on drugs.

Quickly Evolving Attitudes In Congress

Even if committee members cast no votes on these proposals during the hearing, the mere fact that Congress is discussing decriminalization represents a massive shift in the government's attitude toward marijuana.

Just two years ago, after years of gradually relaxing restrictions on cannabis commerce, former U.S. Attorney General Jeff Sessions threw out the Cole memorandum and renewed the Department of Justice's efforts on prosecuting federal marijuana-related crimes.

Since his departure, marijuana legalization has become a bipartisan issue, with Congressional Democrats and Republicans alike finding common ground in recent months over legislation designed to protect cannabis-related businesses and financial institutions serving the industry.

Voters clearly favor legalization: Thirty-three states have now legalized some form of marijuana usage, with 11 of those having legalized full recreational usage by adults; the other 22 have legalized the use of marijuana for medical purposes.

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