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Polis and Blumenauer Introduce Bills to End the Federal Prohibition and Tax Marijuana

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Washington, February 20, 2015 | comments

Today, Representatives Jared Polis (D-CO) and Earl Blumenauer (D-OR)  introduced two bills that together would legalize and tax marijuana at the federal level. Representative Polis’s legislation, H.R. 1013, the Regulate Marijuana Like Alcohol Act, removes marijuana from the schedule set by the Controlled Substances Act; transitions marijuana oversight from the jurisdiction of the Drug Enforcement Agency to the Bureau of Alcohol, Tobacco, Firearms and Explosives; and regulates marijuana like alcohol by inserting into the section of the U.S. Code governing “intoxicating liquors.” Representative Blumenauer’s legislation, H.R. 1014, the Marijuana Tax Revenue Act of 2015, creates a federal excise tax on non-medical marijuana sales and moves this quickly growing industry out of the shadows. 

More than 213 million people live in a state or jurisdiction that allows the some form of legal use of marijuana. Twenty-three states currently allow for medical marijuana, while four states--Colorado, Washington, Oregon, and Alaska--and the District of Columbia recently legalized the recreational use of small amounts of marijuana. Eleven additional states have passed laws allowing the use of low-THC forms of marijuana to treat certain medical conditions.

Following federal legalization, the Marijuana Tax Revenue Act would impose a federal excise tax on the sale of marijuana for non-medical purposes as well as apply an occupational tax for marijuana businesses. The bill would establish civil and criminal penalties for those who fail to comply, like those in place for the tobacco industry.  The bill also requires the IRS to produce periodic studies of the marijuana industry and to issue recommendations to Congress. It phases in an excise tax on the sale by a producer (generally the grower) to the next stage of production (generally the processor creating the useable product).  This tax is initially set at 10% and rises over time to 25% as the legal market displaces the black market.  Medical marijuana is exempt from this tax.

The Regulate Marijuana Like Alcohol Act would remove marijuana from the schedule set by the Controlled Substances Act; transition marijuana oversight from the jurisdiction of the Drug Enforcement Agency to the Bureau of Alcohol, Tobacco, Firearms and Explosives; and regulate marijuana like alcohol by inserting into the section of the U.S. Code that governs “intoxicating liquors.”

“Over the past year, Colorado has demonstrated that regulating marijuana like alcohol takes money away from criminals and cartels, grows our economy, and keeps marijuana out of the hands of children,” said Representative Polis. “While President Obama and the Justice Department have allowed the will of voters in states like Colorado and 22 other jurisdictions to move forward, small business owners, medical  marijuana patients, and others who follow state laws still live with the fear that a new administration – or this one—could reverse course and turn them into criminals. It is time for us to replace the failed prohibition with a regulatory system that works and let states and municipalities decide for themselves if they want, or don’t want, to have legal marijuana within their borders.”

"It’s time for the federal government to chart a new path forward for marijuana.” said Representative Blumenauer. “Together these bills create a federal framework to legalize, regulate and tax marijuana, much like we treat alcohol and tobacco. The federal prohibition of marijuana has been a failure, wasting tax dollars and ruining countless lives. As more states move to legalize marijuana as Oregon, Colorado, Washington and Alaska have done, it’s imperative the federal government become a full partner in building a workable and safe framework.”

National trends reflect state efforts.  More than 46% of people 18 and older have tried marijuana at least once and public opinion research reveals more than half of the U.S. population supports legalization. Yet even as states and local governments have taken the lead in finding legal arrangements for marijuana, federal law classifies it among the most dangerous illegal drugs. The enforcement of these laws wastes federal resources and ruins lives. Individuals, states, and marijuana businesses are trapped in a patchwork of conflicting state and federal laws.

It is time for Congress to end the federal prohibition on marijuana, remove it from the Controlled Substances Act, and create a sensible tax and regulatory framework. This represents a unique opportunity to save ruined lives, wasted enforcement and prison costs, while simultaneously helping to create a new industry, with new jobs and revenues that will improve the federal budget outlook.
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