[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3617 Introduced in House (IH)]
<DOC>
117th CONGRESS
1st Session
H. R. 3617
To decriminalize and deschedule cannabis, to provide for reinvestment
in certain persons adversely impacted by the War on Drugs, to provide
for expungement of certain cannabis offenses, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 28, 2021
Mr. Nadler (for himself, Ms. Lee of California, Mr. Blumenauer, Ms.
Jackson Lee, Mr. Jeffries, and Ms. Velazquez) introduced the following
bill; which was referred to the Committee on the Judiciary, and in
addition to the Committees on Energy and Commerce, Agriculture,
Education and Labor, Ways and Means, Small Business, Natural Resources,
Oversight and Reform, and Transportation and Infrastructure, for a
period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
committee concerned
_______________________________________________________________________
A BILL
To decriminalize and deschedule cannabis, to provide for reinvestment
in certain persons adversely impacted by the War on Drugs, to provide
for expungement of certain cannabis offenses, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Marijuana Opportunity Reinvestment
and Expungement Act of 2021'' or the ``MORE Act of 2021''.
SEC. 2. FINDINGS.
The Congress finds as follows:
(1) The communities that have been most harmed by cannabis
prohibition are benefiting the least from the legal marijuana
marketplace.
(2) A legacy of racial and ethnic injustices, compounded by
the disproportionate collateral consequences of 80 years of
cannabis prohibition enforcement, now limits participation in
the industry.
(3) 37 States, the District of Columbia, Puerto Rico, Guam,
and the U.S. Virgin Islands have adopted laws allowing legal
access to cannabis, and 15 States, the District of Columbia,
the Commonwealth of the Northern Mariana Islands, and Guam have
adopted laws legalizing cannabis for adult recreational use.
(4) A total of 47 States have reformed their laws
pertaining to cannabis despite the Schedule I status of
marijuana and its Federal criminalization.
(5) Legal cannabis sales totaled $20,000,000,000 in 2020
and are projected to reach $40,500,000,000 by 2025.
(6) According to the American Civil Liberties Union (ACLU),
enforcing cannabis prohibition laws costs taxpayers
approximately $3.6 billion a year.
(7) The continued enforcement of cannabis prohibition laws
results in over 600,000 arrests annually, disproportionately
impacting people of color who are almost 4 times more likely to
be arrested for cannabis possession than their White
counterparts, despite equal rates of use across populations.
(8) People of color have been historically targeted by
discriminatory sentencing practices resulting in Black men
receiving drug sentences that are 13.1 percent longer than
sentences imposed for White men and Latinos being nearly 6.5
times more likely to receive a Federal sentence for cannabis
possession than non-Hispanic Whites.
(9) In 2013, simple cannabis possession was the fourth most
common cause of deportation for any offense and the most common
cause of deportation for drug law violations.
(10) Fewer than one-fifth of cannabis business owners
identify as minorities and only approximately 4 percent are
black.
(11) Applicants for cannabis licenses are limited by
numerous laws, regulations, and exorbitant permit applications,
licensing fees, and costs in these States, which can require
more than $700,000.
(12) Historically disproportionate arrest and conviction
rates make it particularly difficult for people of color to
enter the legal cannabis marketplace, as most States bar these
individuals from participating.
(13) Federal law severely limits access to loans and
capital for cannabis businesses, disproportionately impacting
minority small business owners.
(14) Some States and municipalities have taken proactive
steps to mitigate inequalities in the legal cannabis
marketplace and ensure equal participation in the industry.
SEC. 3. DECRIMINALIZATION OF CANNABIS.
(a) Cannabis Removed From Schedule of Controlled Substances.--
(1) Removal in statute.--Subsection (c) of schedule I of
section 202(c) of the Controlled Substances Act (21 U.S.C. 812)
is amended--
(A) by striking ``(10) Marihuana.''; and
(B) by striking ``(17) Tetrahydrocannabinols,
except for tetrahydrocannabinols in hemp (as defined in
section 297A of the Agricultural Marketing Act of
1946).''.
(2) Removal from schedule.--Not later than 180 days after
the date of the enactment of this Act, the Attorney General
shall finalize a rulemaking under section 201(a)(2) removing
marihuana and tetrahydrocannabinols from the schedules of
controlled substances. For the purposes of the Controlled
Substances Act, marihuana and tetrahydrocannabinols shall each
be deemed to be a drug or other substance that does not meet
the requirements for inclusion in any schedule. A rulemaking
under this paragraph shall be considered to have taken effect
as of the date of enactment of this Act for purposes of any
offense committed, case pending, conviction entered, and, in
the case of a juvenile, any offense committed, case pending,
and adjudication of juvenile delinquency entered before, on, or
after the date of enactment of this Act.
(b) Conforming Amendments to Controlled Substances Act.--The
Controlled Substances Act (21 U.S.C. 801 et seq.) is amended--
(1) in section 102(44) (21 U.S.C. 802(44)), by striking
``marihuana,'';
(2) in section 401(b) (21 U.S.C. 841(b))--
(A) in paragraph (1)--
(i) in subparagraph (A)--
(I) in clause (vi), by inserting
``or'' after the semicolon;
(II) by striking clause (vii); and
(III) by redesignating clause
(viii) as clause (vii);
(ii) in subparagraph (B)--
(I) in clause (vi), by inserting
``or'' after the semicolon;
(II) by striking clause (vii); and
(III) by redesignating clause
(viii) as clause (vii);
(iii) in subparagraph (C), in the first
sentence, by striking ``subparagraphs (A), (B),
and (D)'' and inserting ``subparagraphs (A) and
(B)'';
(iv) by striking subparagraph (D);
(v) by redesignating subparagraph (E) as
subparagraph (D); and
(vi) in subparagraph (D)(i), as so
redesignated, by striking ``subparagraphs (C)
and (D)'' and inserting ``subparagraph (C)'';
(B) by striking paragraph (4); and
(C) by redesignating paragraphs (5), (6), and (7)
as paragraphs (4), (5), and (6), respectively;
(3) in section 402(c)(2)(B) (21 U.S.C. 842(c)(2)(B)), by
striking ``, marihuana,'';
(4) in section 403(d)(1) (21 U.S.C. 843(d)(1)), by striking
``, marihuana,'';
(5) in section 418(a) (21 U.S.C. 859(a)), by striking the
last sentence;
(6) in section 419(a) (21 U.S.C. 860(a)), by striking the
last sentence;
(7) in section 422(d) (21 U.S.C. 863(d))--
(A) in the matter preceding paragraph (1), by
striking ``marijuana,''; and
(B) in paragraph (5), by striking ``, such as a
marihuana cigarette,''; and
(8) in section 516(d) (21 U.S.C. 886(d)), by striking
``section 401(b)(6)'' each place the term appears and inserting
``section 401(b)(5)''.
(c) Other Conforming Amendments.--
(1) National forest system drug control act of 1986.--The
National Forest System Drug Control Act of 1986 (16 U.S.C. 559b
et seq.) is amended--
(A) in section 15002(a) (16 U.S.C. 559b(a)) by
striking ``marijuana and other'';
(B) in section 15003(2) (16 U.S.C. 559c(2)) by
striking ``marijuana and other''; and
(C) in section 15004(2) (16 U.S.C. 559d(2)) by
striking ``marijuana and other''.
(2) Interception of communications.--Section 2516 of title
18, United States Code, is amended--
(A) in subsection (1)(e), by striking
``marihuana,''; and
(B) in subsection (2) by striking ``marihuana''.
(3) FMCSA provisions.--
(A) Conforming amendment.--Section 31301(5) of
title 49, United States Code, is amended by striking
``section 31306,'' and inserting ``sections 31306,
31306a, and subsections (b) and (c) of section
31310,''.
(B) Definition.--Section 31306(a) of title 49,
United States Code, is amended--
(i) by striking ``means any substance'' and
inserting the following: ``means--
``(A) any substance''; and
(ii) by striking the period at the end and
inserting ``; and
``(B) any substance not covered under subparagraph
(A) that was a substance under such section as of
December 1, 2018, and specified by the Secretary of
Transportation.''.
(C) Disqualifications.--Section 31310(b) of title
49, United States Code, is amended by adding at the end
the following:
``(3) In this subsection and subsection (c), the term
`controlled substance' has the meaning given such term in
section 31306(a).''.
(4) FAA provisions.--Section 45101 of title 49, United
States Code, is amended--
(A) by striking ``means any substance'' and
inserting the following: ``means--
``(A) any substance''; and
(B) by striking the period at the end and inserting
``; and
``(B) any substance not covered under subparagraph
(A) that was a substance under such section as of
December 1, 2018, and specified by the Secretary of
Transportation.''.
(5) FRA provisions.--Section 20140(a) of title 49, United
States Code, is amended--
(A) by striking ``means any substance'' and
inserting the following: ``means--
``(A) any substance''; and
(B) by striking the period at the end and inserting
``; and
``(B) any substance not covered under subparagraph
(A) that was a substance under such section as of
December 1, 2018, and specified by the Secretary of
Transportation.''.
(6) FTA provisions.--Section 5331(a)(1) of title 49, United
States Code, is amended--
(A) by striking ``means any substance'' and
inserting the following: ``means--
``(A) any substance''; and
(B) by striking the period at the end and inserting
``; and
``(B) any substance not covered under subparagraph
(A) that was a substance under such section as of
December 1, 2018, and whose use the Secretary of
Transportation decides has a risk to transportation
safety.''.
(d) Retroactivity.--The amendments made by this section to the
Controlled Substances Act (21 U.S.C. 801 et seq.) are retroactive and
shall apply to any offense committed, case pending, conviction entered,
and, in the case of a juvenile, any offense committed, case pending, or
adjudication of juvenile delinquency entered before, on, or after the
date of enactment of this Act.
(e) Effect on Other Law.--Nothing in this subtitle shall affect or
modify--
(1) the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301
et seq.);
(2) section 351 of the Public Health Service Act (42 U.S.C.
262); or
(3) the authority of the Commissioner of Food and Drugs and
the Secretary of Health and Human Services--
(A) under--
(i) the Federal Food, Drug, and Cosmetic
Act (21 U.S. 301 et seq.); or
(ii) section 351 of the Public Health
Service Act (42 U.S.C. 262); or
(B) to promulgate Federal regulations and
guidelines that relate to products containing cannabis
or cannabis-derived compounds under the Act described
in subparagraph (A)(i) or the section described in
subparagraph (A)(ii).
(f) Public Meetings.--Not later than one year after the date of
enactment of this Act, the Secretary of Health and Human Services,
acting through the Commissioner of Food and Drugs, shall hold not less
than one public meeting to address the regulation, safety,
manufacturing, product quality, marketing, labeling, and sale of
products containing cannabis or cannabis-derived compounds.
(g) Special Rule for Federal Employee Testing.--Section 503 of the
Supplemental Appropriations Act, 1987 (5 U.S.C. 7301 note) is amended
by adding at the end the following:
``(h) Marijuana.--
``(1) Continued testing.--Notwithstanding the Marijuana
Opportunity Reinvestment and Expungement Act of 2021 and the
amendments made thereby, the Secretary of Health and Human
Services may continue to include marijuana for purposes of drug
testing of Federal employees subject to this section, Executive
Order 12564, or other applicable Federal laws and orders.
``(2) Definition.--The term `marijuana' has the meaning
given to the term `marihuana' in section 102 of the Controlled
Substances Act (21 6 U.S.C. 802) on the day before the date of
enactment of the Marijuana Opportunity Reinvestment and
Expungement Act of 2021.''.
(h) Special Rule for Certain Regulations.--
(1) In general.--The amendments made by this section may
not be construed to abridge the authority of the Secretary of
Transportation, or the Secretary of the department in which the
Coast Guard is operating, to regulate and screen for the use of
a controlled substance.
(2) Controlled substance defined.--In this subsection, the
term ``controlled substance'' means--
(A) any substance covered under section 102 of the
Controlled Substances Act (21 U.S.C. 802) on the day
before the date of enactment of this Act; and
(B) any substance not covered under subparagraph
(A) that was a substance covered under section 102 of
the Controlled Substances Act (21 U.S.C. 802) on
December 1, 2018, and specified by the Secretary of
Transportation.
SEC. 4. DEMOGRAPHIC DATA OF CANNABIS BUSINESS OWNERS AND EMPLOYEES.
(a) In General.--The Bureau of Labor Statistics shall regularly
compile, maintain, and make public data on the demographics of--
(1) individuals who are business owners in the cannabis
industry; and
(2) individuals who are employed in the cannabis industry.
(b) Demographic Data.--The data collected under subsection (a)
shall include data regarding--
(1) age;
(2) certifications and licenses;
(3) disability status;
(4) educational attainment;
(5) family and marital status;
(6) nativity;
(7) race and Hispanic ethnicity;
(8) school enrollment;
(9) veteran status; and
(10) sex.
(c) Confidentiality.--The name, address, and other identifying
information of individuals employed in the cannabis industry shall be
kept confidential by the Bureau and not be made available to the
public.
(d) Definitions.--In this section:
(1) Cannabis.--The term ``cannabis'' means either marijuana
or cannabis as defined under the State law authorizing the sale
or use of cannabis in which the individual or entity is
located.
(2) Cannabis industry.--The term ``cannabis industry''
means an individual or entity that is licensed or permitted
under a State or local law to engage in commercial cannabis-
related activity.
(3) Owner.--The term ``owner'' means an individual or
entity that is defined as an owner under the State or local law
where the individual or business is licensed or permitted.
SEC. 5. CREATION OF OPPORTUNITY TRUST FUND AND IMPOSITION OF TAXES WITH
RESPECT TO CANNABIS PRODUCTS.
(a) Establishment of Trust Fund.--Subchapter A of chapter 98 of the
Internal Revenue Code of 1986 is amended by adding at the end the
following new section:
``SEC. 9512. OPPORTUNITY TRUST FUND.
``(a) Creation of Trust Fund.--There is established in the Treasury
of the United States a trust fund to be known as the `Opportunity Trust
Fund' (referred to in this section as the `Trust Fund'), consisting of
such amounts as may be appropriated or credited to such fund as
provided in this section or section 9602(b).
``(b) Transfers to Trust Fund.--There are hereby appropriated to
the Trust Fund amounts equivalent to the net revenues received in the
Treasury from the taxes imposed under chapter 56.
``(c) Expenditures.--Amounts in the Trust Fund shall be available,
without further appropriation, only as follows:
``(1) 50 percent to the Attorney General to carry out
section 3052(a) of part OO of the Omnibus Crime Control and
Safe Streets Act of 1968.
``(2) 10 percent to the Attorney General to carry out
section 3052(b) of part OO of the Omnibus Crime Control and
Safe Streets Act of 1968.
``(3) 20 percent to the Administrator of the Small Business
Administration to carry out section 6(b)(1) of the Marijuana
Opportunity Reinvestment and Expungement Act of 2021.
``(4) 20 percent to the Administrator of the Small Business
Administration to carry out section 6(b)(2) of the Marijuana
Opportunity Reinvestment and Expungement Act of 2021.''.
(b) Cannabis Revenue and Regulation Act.--Subtitle E of the
Internal Revenue Code of 1986 is amended by adding at the end the
following new chapter:
``CHAPTER 56--CANNABIS PRODUCTS
``subchapter a. tax on cannabis products
``subchapter b. occupational tax
``subchapter c. bond and permits
``subchapter d. operations
``subchapter e. penalties
``Subchapter A--Tax on Cannabis Products
``Sec. 5901. Imposition of tax.
``Sec. 5902. Definitions.
``Sec. 5903. Liability and method of payment.
``Sec. 5904. Exemption from tax; transfers in bond.
``Sec. 5905. Credit, refund, or drawback of tax.
``SEC. 5901. IMPOSITION OF TAX.
``(a) Imposition of Tax.--There is hereby imposed on any cannabis
product produced in or imported into the United States a tax equal to--
``(1) for any such product removed during the first 5
calendar years ending after the date on which this chapter
becomes effective, the applicable percentage of such product's
removal price, and
``(2) for any product removed during any calendar year
after the calendar years described in paragraph (1), the
applicable equivalent amount.
``(b) Applicable Percentage.--For purposes of subsection (a)(1),
the applicable percentage shall be determined as follows:
``(1) For any cannabis product removed during the first 2
calendar years ending after the date on which this chapter
becomes effective, 5 percent.
``(2) For any cannabis product removed during the calendar
year after the last calendar year to which paragraph (1)
applies, 6 percent.
``(3) For any cannabis product removed during the calendar
year after the calendar year to which paragraph (2) applies, 7
percent.
``(4) For any cannabis product removed during the calendar
year after the calendar year to which paragraph (3) applies, 8
percent.
``(c) Applicable Equivalent Amount.--
``(1) In general.--For purposes of subsection (a)(2), the
term `applicable equivalent amount' means, with respect to any
cannabis product removed during any calendar year, an amount
equal to--
``(A) in the case of any cannabis product not
described in subparagraph (B), the product of the
applicable rate per ounce multiplied by the number of
ounces of such product (and a proportionate tax at the
like rate on all fractional parts of an ounce of such
product), and
``(B) in the case of any THC-measurable cannabis
product, the product of the applicable rate per gram
multiplied by the number of grams of
tetrahydrocannabinol in such product (and a
proportionate tax at the like rate on all fractional
parts of a gram of tetrahydrocannabinol in such
product).
``(2) Applicable rates.--
``(A) In general.--For purposes of paragraph
(1)(A), the term `applicable rate per ounce' means,
with respect to any cannabis product removed during any
calendar year, 8 percent of the prevailing sales price
of cannabis flowers sold in the United States during
the 12-month period ending one calendar quarter before
such calendar year, expressed on a per ounce basis, as
determined by the Secretary.
``(B) THC-measurable cannabis products.--For
purposes of paragraph (1)(B), the term `applicable rate
per gram' means, with respect to any cannabis product
removed during any calendar year, 8 percent of the
prevailing sales price of tetrahydrocannabinol sold in
the United States during the 12-month period ending one
calendar quarter before such calendar year, expressed
on a per gram basis, as determined by the Secretary.
``(d) Time of Attachment on Cannabis Products.--The tax under this
section shall attach to any cannabis product as soon as such product is
in existence as such, whether it be subsequently separated or
transferred into any other substance, either in the process of original
production or by any subsequent process.
``SEC. 5902. DEFINITIONS.
``(a) Definitions Related to Cannabis Products.--For purposes of
this chapter--
``(1) Cannabis product.--
``(A) In general.--Except as provided in
subparagraph (B), the term `cannabis product' means any
article which contains (or consists of) cannabis.
``(B) Exceptions.--The term `cannabis product'
shall not include an FDA-approved article or industrial
hemp.
``(C) FDA-approved article.--The term `FDA-approved
article' means any article if the producer or importer
thereof demonstrates to the satisfaction of the
Secretary of Health and Human Services that such
article is--
``(i) a drug--
``(I) that is approved under
section 505 of the Federal Food, Drug,
and Cosmetic Act or licensed under
section 351 of the Public Health
Service Act, or
``(II) for which an investigational
use exemption has been authorized under
section 505(i) of the Federal Food,
Drug, and Cosmetic Act or under section
351(a) of the Public Health Service
Act, or
``(ii) a combination product (as described
in section 503(g) of the Federal Food, Drug,
and Cosmetic Act), the constituent parts of
which were approved or cleared under section
505, 510(k), or 515 of such Act.
``(D) Industrial hemp.--The term `industrial hemp'
means the plant Cannabis sativa L. and any part of such
plant, whether growing or not, with a delta-9
tetrahydrocannabinol concentration of not more than 0.3
percent on a dry weight basis.
``(2) THC-measurable cannabis product.--The term `THC-
measurable cannabis product' means any cannabis product--
``(A) with respect to which the Secretary has made
a determination that the amount of tetrahydrocannabinol
in such product can be measured with a high degree of
accuracy, or
``(B) which is not cannabis flower and the
concentration of tetrahydrocannabinol in which is
significantly higher than the average such
concentration in cannabis flower.
``(3) Cannabis.--The term `cannabis' has the meaning given
such term under section 102(16) of the Controlled Substances
Act (21 U.S.C. 802(16)).
``(b) Definitions Related to Cannabis Enterprises.--For purposes of
this chapter--
``(1) Cannabis enterprise.--The term `cannabis enterprise'
means a producer, importer, or export warehouse proprietor.
``(2) Producer.--
``(A) In general.--The term `producer' means any
person who plants, cultivates, harvests, grows,
manufactures, produces, compounds, converts, processes,
prepares, or packages any cannabis product.
``(B) Personal use exception.--Subject to
regulation prescribed by the Secretary, the term
`producer' shall not include any individual otherwise
described in subparagraph (A) if the only cannabis
product described in such subparagraph with respect to
such individual is for personal or family use and not
for sale.
``(3) Importer.--The term `importer' means any person who--
``(A) is in the United States and to whom non-tax-
paid cannabis products, produced in a foreign country
or a possession of the United States, are shipped or
consigned,
``(B) removes cannabis products for sale or
consumption in the United States from a customs bonded
warehouse, or
``(C) smuggles or otherwise unlawfully brings any
cannabis product into the United States.
``(4) Export warehouse proprietor.--
``(A) In general.--The term `export warehouse
proprietor' means any person who operates an export
warehouse.
``(B) Export warehouse.--The term `export
warehouse' means a bonded internal revenue warehouse
for the storage of cannabis products, upon which the
internal revenue tax has not been paid--
``(i) for subsequent shipment to a foreign
country or a possession of the United States,
or
``(ii) for consumption beyond the
jurisdiction of the internal revenue laws of
the United States.
``(5) Cannabis production facility.--The term `cannabis
production facility' means an establishment which is qualified
under subchapter C to perform any operation for which such
qualification is required under such subchapter.
``(c) Other Definitions.--For purposes of this chapter--
``(1) Produce.--The term `produce' includes any activity
described in subsection (b)(2)(A).
``(2) Removal; remove.--The terms `removal' or `remove'
means--
``(A) the transfer of cannabis products from the
premises of a producer (or the transfer of such
products from the bonded premises of a producer to a
non-bonded premises of such producer),
``(B) release of such products from customs
custody, or
``(C) smuggling or other unlawful importation of
such products into the United States.
``(3) Removal price.--The term `removal price' means--
``(A) except as otherwise provided in this
paragraph, the price for which the cannabis product is
sold in the sale which occurs in connection with the
removal of such product,
``(B) in the case of any such sale which is
described in section 5903(c), the price determined
under such section, and
``(C) if there is no sale which occurs in
connection with such removal, the price which would be
determined under section 5903(c) if such product were
sold at a price which cannot be determined.
``SEC. 5903. LIABILITY AND METHOD OF PAYMENT.
``(a) Liability for Tax.--
``(1) Original liability.--The producer or importer of any
cannabis product shall be liable for the taxes imposed thereon
by section 5901.
``(2) Transfer of liability.--
``(A) In general.--When cannabis products are
transferred, without payment of tax, pursuant to
subsection (b) or (c) of section 5904--
``(i) except as provided in clause (ii),
the transferee shall become liable for the tax
upon receipt by the transferee of such
articles, and the transferor shall thereupon be
relieved of their liability for such tax, and
``(ii) in the case of cannabis products
which are released in bond from customs custody
for transfer to the bonded premises of a
producer, the transferee shall become liable
for the tax on such articles upon release from
customs custody, and the importer shall
thereupon be relieved of their liability for
such tax.
``(B) Returned to bond.--All provisions of this
chapter applicable to cannabis products in bond shall
be applicable to such articles returned to bond upon
withdrawal from the market or returned to bond after
previous removal for a tax-exempt purpose.
``(b) Method of Payment of Tax.--
``(1) In general.--
``(A) Taxes paid on basis of return.--The taxes
imposed by section 5901 shall be paid on the basis of
return. The Secretary shall, by regulations, prescribe
the period or the event to be covered by such return
and the information to be furnished on such return.
``(B) Application to transferees.--In the case of
any transfer to which subsection (a)(2)(A) applies, the
tax under section 5901 on the transferee shall (if not
otherwise relieved by reason of a subsequent transfer
to which such subsection applies) be imposed with
respect to the removal of the cannabis product from the
bonded premises of the transferee.
``(C) Postponement.--Any postponement under this
subsection of the payment of taxes determined at the
time of removal shall be conditioned upon the filing of
such additional bonds, and upon compliance with such
requirements, as the Secretary may prescribe for the
protection of the revenue. The Secretary may, by
regulations, require payment of tax on the basis of a
return prior to removal of the cannabis products where
a person defaults in the postponed payment of tax on
the basis of a return under this subsection or
regulations prescribed thereunder.
``(D) Administration and penalties.--All
administrative and penalty provisions of this title,
insofar as applicable, shall apply to any tax imposed
by section 5901.
``(2) Time for payment of taxes.--
``(A) In general.--Except as otherwise provided in
this paragraph, in the case of taxes on cannabis
products removed during any semimonthly period under
bond for deferred payment of tax, the last day for
payment of such taxes shall be the 14th day after the
last day of such semimonthly period.
``(B) Imported articles.--In the case of cannabis
products which are imported into the United States, the
following provisions shall apply:
``(i) In general.--The last day for payment
of tax shall be the 14th day after the last day
of the semimonthly period during which the
article is entered into the customs territory
of the United States.
``(ii) Special rule for entry of
warehousing.--Except as provided in clause
(iv), in the case of an entry for warehousing,
the last day for payment of tax shall not be
later than the 14th day after the last day of
the semimonthly period during which the article
is removed from the first such warehouse.
``(iii) Foreign trade zones.--Except as
provided in clause (iv) and in regulations
prescribed by the Secretary, articles brought
into a foreign trade zone shall,
notwithstanding any other provision of law, be
treated for purposes of this subsection as if
such zone were a single customs warehouse.
``(iv) Exception for articles destined for
export.--Clauses (ii) and (iii) shall not apply
to any article which is shown to the
satisfaction of the Secretary to be destined
for export.
``(C) Cannabis products brought into the united
states from puerto rico.--In the case of cannabis
products which are brought into the United States from
Puerto Rico and subject to tax under section 7652, the
last day for payment of tax shall be the 14th day after
the last day of the semimonthly period during which the
article is brought into the United States.
``(D) Special rule where due date falls on
saturday, sunday, or holiday.--Notwithstanding section
7503, if, but for this subparagraph, the due date under
this paragraph would fall on a Saturday, Sunday, or a
legal holiday (as defined in section 7503), such due
date shall be the immediately preceding day which is
not a Saturday, Sunday, or such a holiday.
``(E) Special rule for unlawfully produced cannabis
products.--In the case of any cannabis products
produced in the United States at any place other than
the premises of a producer that has filed the bond and
obtained the permit required under this chapter, tax
shall be due and payable immediately upon production.
``(3) Payment by electronic fund transfer.--Any person who
in any 12-month period, ending December 31, was liable for a
gross amount equal to or exceeding $5,000,000 in taxes imposed
on cannabis products by section 5901 (or section 7652) shall
pay such taxes during the succeeding calendar year by
electronic fund transfer (as defined in section 5061(e)(2)) to
a Federal Reserve Bank. Rules similar to the rules of section
5061(e)(3) shall apply to the $5,000,000 amount specified in
the preceding sentence.
``(c) Determination of Price.--
``(1) Constructive sale price.--
``(A) In general.--If an article is sold directly
to consumers, sold on consignment, or sold (otherwise
than through an arm's length transaction) at less than
the fair market price, or if the price for which the
article sold cannot be determined, the tax under
section 5901(a) shall be computed on the price for
which such articles are sold, in the ordinary course of
trade, by producers thereof, as determined by the
Secretary.
``(B) Arm's length.--
``(i) In general.--For purposes of this
section, a sale is considered to be made under
circumstances otherwise than at arm's length
if--
``(I) the parties are members of
the same controlled group, whether or
not such control is actually exercised
to influence the sale price,
``(II) the parties are members of a
family, as defined in section
267(c)(4), or
``(III) the sale is made pursuant
to special arrangements between a
producer and a purchaser.
``(ii) Controlled groups.--
``(I) In general.--The term
`controlled group' has the meaning
given to such term by subsection (a) of
section 1563, except that `more than 50
percent' shall be substituted for `at
least 80 percent' each place it appears
in such subsection.
``(II) Controlled groups which
include nonincorporated persons.--Under
regulations prescribed by the
Secretary, principles similar to the
principles of subclause (I) shall apply
to a group of persons under common
control where one or more of such
persons is not a corporation.
``(2) Containers, packing and transportation charges.--In
determining, for the purposes of this chapter, the price for
which an article is sold, there shall be included any charge
for coverings and containers of whatever nature, and any charge
incident to placing the article in condition packed ready for
shipment, but there shall be excluded the amount of tax imposed
by this chapter, whether or not stated as a separate charge. A
transportation, delivery, insurance, installation, or other
charge (not required by the preceding sentence to be included)
shall be excluded from the price only if the amount thereof is
established to the satisfaction of the Secretary in accordance
with regulations.
``(3) Determination of applicable equivalent amounts.--
Paragraphs (1) and (2) shall apply for purposes of section
5901(c) only to the extent that the Secretary determines
appropriate.
``(d) Partial Payments and Installment Accounts.--
``(1) Partial payments.--In the case of--
``(A) a contract for the sale of an article wherein
it is provided that the price shall be paid by
installments and title to the article sold does not
pass until a future date notwithstanding partial
payment by installments,
``(B) a conditional sale, or
``(C) a chattel mortgage arrangement wherein it is
provided that the sales price shall be paid in
installments,
there shall be paid upon each payment with respect to the
article a percentage of such payment equal to the rate of tax
in effect on the date such payment is due.
``(2) Sales of installment accounts.--If installment
accounts, with respect to payments on which tax is being
computed as provided in paragraph (1), are sold or otherwise
disposed of, then paragraph (1) shall not apply with respect to
any subsequent payments on such accounts (other than subsequent
payments on returned accounts with respect to which credit or
refund is allowable by reason of section 6416(b)(5)), but
instead--
``(A) there shall be paid an amount equal to the
difference between--
``(i) the tax previously paid on the
payments on such installment accounts, and
``(ii) the total tax which would be payable
if such installment accounts had not been sold
or otherwise disposed of (computed as provided
in paragraph (1)), except that
``(B) if any such sale is pursuant to the order of,
or subject to the approval of, a court of competent
jurisdiction in a bankruptcy or insolvency proceeding,
the amount computed under subparagraph (A) shall not
exceed the sum of the amounts computed by multiplying--
``(i) the proportionate share of the amount
for which such accounts are sold which is
allocable to each unpaid installment payment,
by
``(ii) the rate of tax under this chapter
in effect on the date such unpaid installment
payment is or was due.
The sum of the amounts payable under this subsection in
respect of the sale of any article shall not exceed the
total tax.
``SEC. 5904. EXEMPTION FROM TAX; TRANSFERS IN BOND.
``(a) Exemption From Tax.--Cannabis products on which the internal
revenue tax has not been paid or determined may, subject to such
regulations as the Secretary shall prescribe, be withdrawn from the
bonded premises of any producer in approved containers free of tax and
not for resale for use--
``(1) exclusively in scientific research by a laboratory,
``(2) by a proprietor of a cannabis production facility in
research, development, or testing (other than consumer testing
or other market analysis) of processes, systems, materials, or
equipment, relating to cannabis or cannabis operations, under
such limitations and conditions as to quantities, use, and
accountability as the Secretary may by regulations require for
the protection of the revenue, or
``(3) by the United States or any governmental agency
thereof, any State, any political subdivision of a State, or
the District of Columbia, for nonconsumption purposes.
``(b) Cannabis Products Transferred or Removed in Bond From
Domestic Factories and Export Warehouses.--
``(1) In general.--Subject to such regulations and under
such bonds as the Secretary shall prescribe, a producer or
export warehouse proprietor may transfer cannabis products,
without payment of tax, to the bonded premises of another
producer or export warehouse proprietor, or remove such
articles, without payment of tax, for shipment to a foreign
country or a possession of the United States, or for
consumption beyond the jurisdiction of the internal revenue
laws of the United States.
``(2) Labeling.--Cannabis products may not be transferred
or removed under this subsection unless such products bear such
marks, labels, or notices as the Secretary shall by regulations
prescribe.
``(c) Cannabis Products Released in Bond From Customs Custody.--
Cannabis products imported or brought into the United States may be
released from customs custody, without payment of tax, for delivery to
a producer or export warehouse proprietor if such articles are not put
up in packages, in accordance with such regulations and under such bond
as the Secretary shall prescribe.
``(d) Cannabis Products Exported and Returned.--Cannabis products
classifiable under item 9801.00.10 of the Harmonized Tariff Schedule of
the United States (relating to duty on certain articles previously
exported and returned), as in effect on the date of the enactment of
the Marijuana Opportunity Reinvestment and Expungement Act of 2021, may
be released from customs custody, without payment of that part of the
duty attributable to the internal revenue tax for delivery to the
original producer of such cannabis products or to the export warehouse
proprietor authorized by such producer to receive such products, in
accordance with such regulations and under such bond as the Secretary
shall prescribe. Upon such release such products shall be subject to
this chapter as if they had not been exported or otherwise removed from
internal revenue bond.
``SEC. 5905. CREDIT, REFUND, OR DRAWBACK OF TAX.
``(a) Credit or Refund.--
``(1) In general.--Credit or refund of any tax imposed by
this chapter or section 7652 shall be allowed or made (without
interest) to the cannabis enterprise on proof satisfactory to
the Secretary that the claimant cannabis enterprise has paid
the tax on--
``(A) cannabis products withdrawn from the market
by the claimant, or
``(B) such products lost (otherwise than by theft)
or destroyed, by fire, casualty, or act of God, while
in the possession or ownership of the claimant.
``(2) Cannabis products lost or destroyed in bond.--
``(A) Extent of loss allowance.--No tax shall be
collected in respect of cannabis products lost or
destroyed while in bond, except that such tax shall be
collected--
``(i) in the case of loss by theft, unless
the Secretary finds that the theft occurred
without connivance, collusion, fraud, or
negligence on the part of the proprietor of the
cannabis production facility, owner, consignor,
consignee, bailee, or carrier, or their
employees or agents,
``(ii) in the case of voluntary
destruction, unless such destruction is carried
out as provided in paragraph (3), and
``(iii) in the case of an unexplained
shortage of cannabis products.
``(B) Proof of loss.--In any case in which cannabis
products are lost or destroyed, whether by theft or
otherwise, the Secretary may require the proprietor of
a cannabis production facility or other person liable
for the tax to file a claim for relief from the tax and
submit proof as to the cause of such loss. In every
case where it appears that the loss was by theft, the
burden shall be upon the proprietor of the cannabis
production facility or other person responsible for the
tax under section 5901 to establish to the satisfaction
of the Secretary that such loss did not occur as the
result of connivance, collusion, fraud, or negligence
on the part of the proprietor of the cannabis
production facility, owner, consignor, consignee,
bailee, or carrier, or their employees or agents.
``(C) Refund of tax.--In any case where the tax
would not be collectible by virtue of subparagraph (A),
but such tax has been paid, the Secretary shall refund
such tax.
``(D) Limitations.--Except as provided in
subparagraph (E), no tax shall be abated, remitted,
credited, or refunded under this paragraph where the
loss occurred after the tax was determined. The
abatement, remission, credit, or refund of taxes
provided for by subparagraphs (A) and (C) in the case
of loss of cannabis products by theft shall only be
allowed to the extent that the claimant is not
indemnified against or recompensed in respect of the
tax for such loss.
``(E) Applicability.--The provisions of this
paragraph shall extend to and apply in respect of
cannabis products lost after the tax was determined and
before completion of the physical removal of the
cannabis products from the bonded premises.
``(3) Voluntary destruction.--The proprietor of a cannabis
production facility or other persons liable for the tax imposed
by this chapter or by section 7652 with respect to any cannabis
product in bond may voluntarily destroy such products, but only
if such destruction is under such supervision and under such
regulations as the Secretary may prescribe.
``(4) Limitation.--Any claim for credit or refund of tax
under this subsection shall be filed within 6 months after the
date of the withdrawal from the market, loss, or destruction of
the products to which the claim relates, and shall be in such
form and contain such information as the Secretary shall by
regulations prescribe.
``(b) Drawback of Tax.--There shall be an allowance of drawback of
tax paid on cannabis products, when shipped from the United States, in
accordance with such regulations and upon the filing of such bond as
the Secretary shall prescribe.
``Subchapter B--Occupational Tax
``Sec. 5911. Imposition and rate of tax.
``Sec. 5912. Payment of tax.
``Sec. 5913. Provisions relating to liability for occupational taxes.
``Sec. 5914. Application to State laws.
``SEC. 5911. IMPOSITION AND RATE OF TAX.
``(a) In General.--Any person engaged in business as a producer or
an export warehouse proprietor shall pay a tax of $1,000 per year
(referred to in this subchapter as an `occupational tax') in respect of
each premises at which such business is carried on.
``(b) Penalty for Failure To Register.--Any person engaged in
business as a producer or an export warehouse proprietor who willfully
fails to pay the occupation tax shall be fined not more than $5,000, or
imprisoned not more than 2 years, or both, for each such offense.
``SEC. 5912. PAYMENT OF TAX.
``(a) Condition Precedent to Carrying on Business.--No person shall
be engaged in or carry on any trade or business subject to the
occupational tax until such person has paid such tax.
``(b) Computation.--
``(1) In general.--The occupational tax shall be imposed--
``(A) as of on the first day of July in each year,
or
``(B) on commencing any trade or business on which
such tax is imposed.
``(2) Period.--In the case of a tax imposed under
subparagraph (A) of paragraph (1), the occupational tax shall
be reckoned for 1 year, and in the case of subparagraph (B) of
such paragraph, it shall be reckoned proportionately, from the
first day of the month in which the liability to such tax
commenced, to and including the 30th day of June following.
``(c) Method of Payment.--
``(1) Payment by return.--The occupational tax shall be
paid on the basis of a return under such regulations as the
Secretary shall prescribe.
``(2) Stamp denoting payment of tax.--After receiving a
properly executed return and remittance of any occupational
tax, the Secretary shall issue to the taxpayer an appropriate
stamp as a receipt denoting payment of the tax. This paragraph
shall not apply in the case of a return covering liability for
a past period.
``SEC. 5913. PROVISIONS RELATING TO LIABILITY FOR OCCUPATIONAL TAXES.
``(a) Partners.--Any number of persons doing business in
partnership at any one place shall be required to pay a single
occupational tax.
``(b) Different Businesses of Same Ownership and Location.--
Whenever more than one of the pursuits or occupations described in this
subchapter are carried on in the same place by the same person at the
same time, except as otherwise provided in this subchapter, the
occupational tax shall be paid for each according to the rates
severally prescribed.
``(c) Businesses in More Than One Location.--
``(1) Liability for tax.--The payment of the occupational
tax shall not exempt from an additional occupational tax the
person carrying on a trade or business in any other place than
that stated in the records of the Internal Revenue Service.
``(2) Storage.--Nothing contained in paragraph (1) shall
require imposition of an occupational tax for the storage of
cannabis products at a location other than the place where such
products are sold or offered for sale.
``(3) Place.--
``(A) In general.--For purposes of this section,
the term `place' means the entire office, plant or area
of the business in any one location under the same
proprietorship.
``(B) Divisions.--For purposes of this paragraph,
any passageways, streets, highways, rail crossings,
waterways, or partitions dividing the premises shall
not be deemed sufficient separation to require an
additional occupational tax, if the various divisions
are otherwise contiguous.
``(d) Death or Change of Location.--
``(1) In general.--In addition to the person who has paid
the occupational tax for the carrying on of any business at any
place, any person described in paragraph (2) may secure the
right to carry on, without incurring any additional
occupational tax, the same business at the same place for the
remainder of the taxable period for which the occupational tax
was paid.
``(2) Eligible persons.--The persons described in this
paragraph are the following:
``(A) The surviving spouse or child, or executor or
administrator or other legal representative, of a
deceased taxpayer.
``(B) A husband or wife succeeding to the business
of his or her living spouse.
``(C) A receiver or trustee in bankruptcy, or an
assignee for benefit of creditors.
``(D) The partner or partners remaining after death
or withdrawal of a member of a partnership.
``(3) Change of location.--When any person moves to any
place other than the place for which occupational tax was paid
for the carrying on of any business, such person may secure the
right to carry on, without incurring additional occupational
tax, the same business at the new location for the remainder of
the taxable period for which the occupational tax was paid. To
secure the right to carry on the business without incurring
additional occupational tax, the successor, or the person
relocating their business, must register the succession or
relocation with the Secretary in accordance with regulations
prescribed by the Secretary.
``(e) Federal Agencies or Instrumentalities.--Any tax imposed by
this subchapter shall apply to any agency or instrumentality of the
United States unless such agency or instrumentality is granted by
statute a specific exemption from such tax.
``SEC. 5914. APPLICATION TO STATE LAWS.
``The payment of any tax imposed by this subchapter for carrying on
any trade or business shall not be held to--
``(1) exempt any person from any penalty or punishment
provided by the laws of any State for carrying on such trade or
business within such State, or in any manner to authorize the
commencement or continuance of such trade or business contrary
to the laws of such State or in places prohibited by municipal
law, or
``(2) prohibit any State from placing a duty or tax on the
same trade or business, for State or other purposes.
``Subchapter C--Bond and Permits
``Sec. 5921. Establishment and bond.
``Sec. 5922. Application for permit.
``Sec. 5923. Permit.
``SEC. 5921. ESTABLISHMENT AND BOND.
``(a) Prohibition on Production Outside of Bonded Cannabis
Production Facility.--
``(1) In general.--Except as authorized by the Secretary or
on the bonded premises of a cannabis production facility duly
authorized to produce cannabis products according to law, no
cannabis product may planted, cultivated, harvested, grown,
manufactured, produced, compounded, converted, processed,
prepared, or packaged in any building or on any premises.
``(2) Authorized producers only.--No person other than a
producer which has filed the bond required under subsection (b)
and received a permit described in section 5923 may produce any
cannabis product.
``(3) Personal use exception.--This subsection shall not
apply with respect the activities of an individual who is not
treated as a producer by reason of section 5902(b)(2)(B).
``(b) Bond.--
``(1) When required.--Every person, before commencing
business as a producer or an export warehouse proprietor, shall
file such bond, conditioned upon compliance with this chapter
and regulations issued thereunder, in such form, amount, and
manner as the Secretary shall by regulation prescribe. A new or
additional bond may be required whenever the Secretary
considers such action necessary for the protection of the
revenue.
``(2) Approval or disapproval.--No person shall engage in
such business until he receives notice of approval of such
bond. A bond may be disapproved, upon notice to the principal
on the bond, if the Secretary determines that the bond is not
adequate to protect the revenue.
``(3) Cancellation.--Any bond filed hereunder may be
canceled, upon notice to the principal on the bond, whenever
the Secretary determines that the bond no longer adequately
protects the revenue.
``SEC. 5922. APPLICATION FOR PERMIT.
``(a) In General.--Every person, before commencing business as a
cannabis enterprise, and at such other time as the Secretary shall by
regulation prescribe, shall make application for the permit provided
for in section 5923. The application shall be in such form as the
Secretary shall prescribe and shall set forth, truthfully and
accurately, the information called for on the form. Such application
may be rejected and the permit denied if the Secretary, after notice
and opportunity for hearing, finds that--
``(1) the premises on which it is proposed to conduct the
cannabis enterprise are not adequate to protect the revenue, or
``(2) such person (including, in the case of a corporation,
any officer, director, or principal stockholder and, in the
case of a partnership, a partner) has failed to disclose any
material information required or made any material false
statement in the application therefor.
``SEC. 5923. PERMIT.
``(a) Issuance.--A person shall not engage in business as a
cannabis enterprise without a permit to engage in such business. Such
permit, conditioned upon compliance with this chapter and regulations
issued thereunder, shall be issued in such form and in such manner as
the Secretary shall by regulation prescribe. A new permit may be
required at such other time as the Secretary shall by regulation
prescribe.
``(b) Suspension or Revocation.--
``(1) Show cause hearing.--If the Secretary has reason to
believe that any person holding a permit--
``(A) has not in good faith complied with this
chapter, or with any other provision of this title
involving intent to defraud,
``(B) has violated the conditions of such permit,
``(C) has failed to disclose any material
information required or made any material false
statement in the application for such permit, or
``(D) has failed to maintain their premises in such
manner as to protect the revenue,
the Secretary shall issue an order, stating the facts charged,
citing such person to show cause why their permit should not be
suspended or revoked.
``(2) Action following hearing.--If, after hearing, the
Secretary finds that such person has not shown cause why their
permit should not be suspended or revoked, such permit shall be
suspended for such period as the Secretary deems proper or
shall be revoked.
``(c) Information Reporting.--The Secretary may require--
``(1) information reporting by any person issued a permit
under this section, and
``(2) information reporting by such other persons as the
Secretary deems necessary to carry out this chapter.
``(d) Inspection or Disclosure of Information.--For rules relating
to inspection and disclosure of returns and return information, see
section 6103(o).
``Subchapter D--Operations
``Sec. 5931. Inventories, reports, and records.
``Sec. 5932. Packaging and labeling.
``Sec. 5933. Purchase, receipt, possession, or sale of cannabis
products after removal.
``Sec. 5934. Restrictions relating to marks, labels, notices, and
packages.
``Sec. 5935. Restriction on importation of previously exported cannabis
products.
``SEC. 5931. INVENTORIES, REPORTS, AND RECORDS.
``Every cannabis enterprise shall--
``(1) make a true and accurate inventory at the time of
commencing business, at the time of concluding business, and at
such other times, in such manner and form, and to include such
items, as the Secretary shall by regulation prescribe, with
such inventories to be subject to verification by any internal
revenue officer,
``(2) make reports containing such information, in such
form, at such times, and for such periods as the Secretary
shall by regulation prescribe, and
``(3) keep such records in such manner as the Secretary
shall by regulation prescribe, with such records to be
available for inspection by any internal revenue officer during
business hours.
``SEC. 5932. PACKAGING AND LABELING.
``(a) Packages.--All cannabis products shall, before removal, be
put up in such packages as the Secretary shall by regulation prescribe.
``(b) Marks, Labels, and Notices.--Every package of cannabis
products shall, before removal, bear the marks, labels, and notices if
any, that the Secretary by regulation prescribes.
``(c) Lottery Features.--No certificate, coupon, or other device
purporting to be or to represent a ticket, chance, share, or an
interest in, or dependent on, the event of a lottery shall be contained
in, attached to, or stamped, marked, written, or printed on any package
of cannabis products.
``(d) Indecent or Immoral Material Prohibited.--No indecent or
immoral picture, print, or representation shall be contained in,
attached to, or stamped, marked, written, or printed on any package of
cannabis products.
``(e) Exceptions.--Subject to regulations prescribed by the
Secretary, cannabis products may be exempted from subsections (a) and
(b) if such products are--
``(1) for experimental purposes, or
``(2) transferred to the bonded premises of another
producer or export warehouse proprietor or released in bond
from customs custody for delivery to a producer.
``SEC. 5933. PURCHASE, RECEIPT, POSSESSION, OR SALE OF CANNABIS
PRODUCTS AFTER REMOVAL.
``(a) Restriction.--No person shall--
``(1) with intent to defraud the United States, purchase,
receive, possess, offer for sale, or sell or otherwise dispose
of, after removal, any cannabis products--
``(A) upon which the tax has not been paid or
determined in the manner and at the time prescribed by
this chapter or regulations thereunder, or
``(B) which, after removal without payment of tax
pursuant to section 5904(a), have been diverted from
the applicable purpose or use specified in that
section,
``(2) with intent to defraud the United States, purchase,
receive, possess, offer for sale, or sell or otherwise dispose
of, after removal, any cannabis products which are not put up
in packages as required under section 5932 or which are put up
in packages not bearing the marks, labels, and notices, as
required under such section, or
``(3) otherwise than with intent to defraud the United
States, purchase, receive, possess, offer for sale, or sell or
otherwise dispose of, after removal, any cannabis products
which are not put up in packages as required under section 5932
or which are put up in packages not bearing the marks, labels,
and notices, as required under such section.
``(b) Exception.--Paragraph (3) of subsection (a) shall not prevent
the sale or delivery of cannabis products directly to consumers from
proper packages, nor apply to such articles when so sold or delivered.
``(c) Liability to Tax.--Any person who possesses cannabis products
in violation of paragraph (1) or (2) of subsection (a) shall be liable
for a tax equal to the tax on such articles.
``SEC. 5934. RESTRICTIONS RELATING TO MARKS, LABELS, NOTICES, AND
PACKAGES.
``No person shall, with intent to defraud the United States,
destroy, obliterate, or detach any mark, label, or notice prescribed or
authorized, by this chapter or regulations thereunder, to appear on, or
be affixed to, any package of cannabis products before such package is
emptied.
``SEC. 5935. RESTRICTION ON IMPORTATION OF PREVIOUSLY EXPORTED CANNABIS
PRODUCTS.
``(a) Export Labeled Cannabis Products.--
``(1) In general.--Cannabis products produced in the United
States and labeled for exportation under this chapter--
``(A) may be transferred to or removed from the
premises of a producer or an export warehouse
proprietor only if such articles are being transferred
or removed without tax in accordance with section 5904,
``(B) may be imported or brought into the United
States, after their exportation, only if such articles
either are eligible to be released from customs custody
with the partial duty exemption provided in section
5904(d) or are returned to the original producer of
such article as provided in section 5904(c), and
``(C) may not be sold or held for sale for domestic
consumption in the United States unless such articles
are removed from their export packaging and repackaged
by the original producer into new packaging that does
not contain an export label.
``(2) Alterations by persons other than original
producer.--This section shall apply to articles labeled for
export even if the packaging or the appearance of such
packaging to the consumer of such articles has been modified or
altered by a person other than the original producer so as to
remove or conceal or attempt to remove or conceal (including by
the placement of a sticker over) any export label.
``(3) Exports include shipments to puerto rico.--For
purposes of this section, section 5904(d), section 5941, and
such other provisions as the Secretary may specify by
regulations, references to exportation shall be treated as
including a reference to shipment to the Commonwealth of Puerto
Rico.
``(b) Export Label.--For purposes of this section, an article is
labeled for export or contains an export label if it bears the mark,
label, or notice required under section 5904(b).
``Subchapter E--Penalties
``Sec. 5941. Civil penalties.
``Sec. 5942. Criminal penalties.
``SEC. 5941. CIVIL PENALTIES.
``(a) Omitting Things Required or Doing Things Forbidden.--Whoever
willfully omits, neglects, or refuses to comply with any duty imposed
upon them by this chapter, or to do, or cause to be done, any of the
things required by this chapter, or does anything prohibited by this
chapter, shall in addition to any other penalty provided in this title,
be liable to a penalty of $10,000, to be recovered, with costs of suit,
in a civil action, except where a penalty under subsection (b) or (c)
or under section 6651 or 6653 or part II of subchapter A of chapter 68
may be collected from such person by assessment.
``(b) Failure To Pay Tax.--Whoever fails to pay any tax imposed by
this chapter at the time prescribed by law or regulations, shall, in
addition to any other penalty provided in this title, be liable to a
penalty of 10 percent of the tax due but unpaid.
``(c) Sale of Cannabis or Cannabis Products for Export.--
``(1) Every person who sells, relands, or receives within
the jurisdiction of the United States any cannabis products
which have been labeled or shipped for exportation under this
chapter,
``(2) every person who sells or receives such relanded
cannabis products, and
``(3) every person who aids or abets in such selling,
relanding, or receiving,
shall, in addition to the tax and any other penalty provided in this
title, be liable for a penalty equal to the greater of $10,000 or 10
times the amount of the tax imposed by this chapter. All cannabis
products relanded within the jurisdiction of the United States shall be
forfeited to the United States and destroyed. All vessels, vehicles,
and aircraft used in such relanding or in removing such cannabis
products from the place where relanded, shall be forfeited to the
United States.
``(d) Applicability of Section 6665.--The penalties imposed by
subsections (b) and (c) shall be assessed, collected, and paid in the
same manner as taxes, as provided in section 6665(a).
``(e) Cross References.--For penalty for failure to make deposits
or for overstatement of deposits, see section 6656.
``SEC. 5942. CRIMINAL PENALTIES.
``(a) Fraudulent Offenses.--Whoever, with intent to defraud the
United States--
``(1) engages in business as a cannabis enterprise without
filing the application and obtaining the permit where required
by this chapter or regulations thereunder,
``(2) fails to keep or make any record, return, report, or
inventory, or keeps or makes any false or fraudulent record,
return, report, or inventory, required by this chapter or
regulations thereunder,
``(3) refuses to pay any tax imposed by this chapter, or
attempts in any manner to evade or defeat the tax or the
payment thereof,
``(4) sells or otherwise transfers, contrary to this
chapter or regulations thereunder, any cannabis products
subject to tax under this chapter, or
``(5) purchases, receives, or possesses, with intent to
redistribute or resell, any cannabis product--
``(A) upon which the tax has not been paid or
determined in the manner and at the time prescribed by
this chapter or regulations thereunder, or
``(B) which, without payment of tax pursuant to
section 5904, have been diverted from the applicable
purpose or use specified in that section,
shall, for each such offense, be fined not more than $10,000, or
imprisoned not more than 5 years, or both.
``(b) Liability to Tax.--Any person who possesses cannabis products
in violation of subsection (a) shall be liable for a tax equal to the
tax on such articles.''.
(c) Study.--Not later than 2 years after the date of the enactment
of this Act, and every 5 years thereafter, the Secretary of the
Treasury, or the Secretary's delegate, shall--
(1) conduct a study concerning the characteristics of the
cannabis industry, including the number of persons operating
cannabis enterprises at each level of such industry, the volume
of sales, the amount of tax collected each year, and the areas
of evasion, and
(2) submit to Congress recommendations to improve the
regulation of the industry and the administration of the
related tax.
(d) Annual Reports Regarding Determination of Applicable Rates.--
Not later than 6 months before the beginning of each calendar year to
which section 5901(a)(2) of the Internal Revenue Code of 1986 (as added
by this section) applies, the Secretary of the Treasury, or the
Secretary's delegate, shall make publicly available a detailed
description of the methodology which the Secretary anticipates using to
determine the applicable rate per ounce and the applicable rate per
gram which will apply for such calendar year under section 5901(c)(2)
of such Code.
(e) Conforming Amendments.--
(1) Section 6103(o)(1)(A) of the Internal Revenue Code of
1986 is amended by striking ``and firearms'' and inserting
``firearms, and cannabis products''.
(2) The table of chapters for subtitle E of such Code is
amended by adding at the end the following new item:
``Chapter 56. Cannabis Products''.
(3) The table of sections for subchapter A of chapter 98 of
such Code is amended by adding at the end the following new
item:
``Sec. 9512. Opportunity Trust Tund.''.
(f) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply to
removals, and applications for permits under section 5922 of
the Internal Revenue Code of 1986 (as added by subsection (b)),
after 180 days after the date of the enactment of this Act.
(2) Establishment of trust fund.--The amendment made by
subsection (a) shall take effect on the date of the enactment
of this Act.
SEC. 6. OPPORTUNITY TRUST FUND PROGRAMS.
(a) Cannabis Justice Office; Community Reinvestment Grant
Program.--
(1) Cannabis justice office.--Part A of title I of the
Omnibus Crime Control and Safe Streets Act of 1968 (34 U.S.C.
10101 et seq.) is amended by inserting after section 109 the
following:
``SEC. 110. CANNABIS JUSTICE OFFICE.
``(a) Establishment.--There is established within the Office of
Justice Programs a Cannabis Justice Office.
``(b) Director.--The Cannabis Justice Office shall be headed by a
Director who shall be appointed by the Assistant Attorney General for
the Office of Justice Programs. The Director shall report to the
Assistant Attorney General for the Office of Justice Programs. The
Director shall award grants and may enter into compacts, cooperative
agreements, and contracts on behalf of the Cannabis Justice Office. The
Director may not engage in any employment other than that of serving as
the Director, nor may the Director hold any office in, or act in any
capacity for, any organization, agency, or institution with which the
Office makes any contract or other arrangement.
``(c) Employees.--
``(1) In general.--The Director shall employ as many full-
time employees as are needed to carry out the duties and
functions of the Cannabis Justice Office under subsection (d).
Such employees shall be exclusively assigned to the Cannabis
Justice Office.
``(2) Initial hires.--Not later than 6 months after the
date of enactment of this section, the Director shall--
``(A) hire no less than one-third of the total
number of employees of the Cannabis Justice Office; and
``(B) no more than one-half of the employees
assigned to the Cannabis Justice Office by term
appointment that may after 2 years be converted to
career appointment.
``(3) Legal counsel.--At least one employee hired for the
Cannabis Justice Office shall serve as legal counsel to the
Director and shall provide counsel to the Cannabis Justice
Office.
``(d) Duties and Functions.--The Cannabis Justice Office is
authorized to--
``(1) administer the Community Reinvestment Grant Program;
and
``(2) perform such other functions as the Assistant
Attorney General for the Office of Justice Programs may
delegate, that are consistent with the statutory obligations of
this section.''.
(2) Community reinvestment grant program.--Title I of the
Omnibus Crime Control and Safe Streets Act of 1968 (34 U.S.C.
et seq.) is amended by adding at the end the following:
``PART OO--COMMUNITY REINVESTMENT GRANT PROGRAM
``SEC. 3052. AUTHORIZATION.
``(a) In General.--The Director of the Cannabis Justice Office
shall establish and carry out a grant program, known as the `Community
Reinvestment Grant Program', to provide eligible entities with funds to
administer services for individuals adversely impacted by the War on
Drugs, including--
``(1) job training;
``(2) reentry services;
``(3) legal aid for civil and criminal cases, including
expungement of cannabis convictions;
``(4) literacy programs;
``(5) youth recreation or mentoring programs; and
``(6) health education programs.
``(b) Substance Use Disorder Services.--The Director, in
consultation with the Secretary of Health and Human Services, shall
provide eligible entities with funds to administer substance use
disorder services for individuals adversely impacted by the War on
Drugs or connect patients with substance use disorder services. Also
eligible for such services are individuals who have been arrested for
or convicted of the sale, possession, use, manufacture, or cultivation
of a controlled substance other than cannabis (except for a conviction
involving distribution to a minor).
``SEC. 3053. FUNDING FROM OPPORTUNITY TRUST FUND.
``The Director shall carry out the program under this part using
funds made available under section 9512(c)(1) and (2) of the Internal
Revenue Code.
``SEC. 3054. DEFINITIONS.
``In this part:
``(1) The term `cannabis conviction' means a conviction, or
adjudication of juvenile delinquency, for a cannabis offense
(as such term is defined in section 13 of the Marijuana
Opportunity Reinvestment and Expungement Act of 2021).
``(2) The term `eligible entity' means a nonprofit
organization, as defined in section 501(c)(3) of the Internal
Revenue Code, that is representative of a community or a
significant segment of a community with experience in providing
relevant services to individuals adversely impacted by the War
on Drugs in that community.
``(3) The term `individuals adversely impacted by the War
on Drugs' has the meaning given that term in section 6 of the
Marijuana Opportunity Reinvestment and Expungement Act of
2021''.''.
(b) Cannabis Restorative Opportunity Program; Equitable Licensing
Grant Program.--
(1) Cannabis restorative opportunity program.--The
Administrator of the Small Business Administration shall
establish and carry out a program, to be known as the
``Cannabis Restorative Opportunity Program'', to provide loans
and technical assistance under section 7(m) of the Small
Business Act (15 U.S.C. 636(m)) to assist small business
concerns owned and controlled by socially and economically
disadvantaged individuals that operate in eligible States or
localities.
(2) Equitable licensing grant program.--The Administrator
of the Small Business Administration shall establish and carry
out a grant program, to be known as the ``Equitable Licensing
Grant Program'', to provide any eligible State or locality
funds to develop and implement equitable cannabis licensing
programs that minimize barriers to cannabis licensing and
employment for individuals adversely impacted by the War on
Drugs, provided that each grantee includes in its cannabis
licensing program at least four of the following elements:
(A) A waiver of cannabis license application fees
for individuals who report an income below 250 percent
of the Federal Poverty Level for at least 5 of the past
10 years and who are first-time applicants for a
cannabis license.
(B) A prohibition on the denial of a cannabis
license based on a conviction for a cannabis offense
that took place prior to State legalization of cannabis
or the date of enactment of this Act, as appropriate.
(C) A prohibition on restrictions for licensing
relating to criminal convictions except with respect to
a criminal conviction related to owning and operating a
business.
(D) A prohibition on cannabis license holders
engaging in suspicionless cannabis drug testing of
their prospective or current employees, except with
respect to drug testing for safety-sensitive positions
required under part 40 of title 49, Code of Federal
Regulations.
(E) The establishment of a cannabis licensing board
that is reflective of the racial, ethnic, economic, and
gender composition of the eligible State or locality,
to serve as an oversight body of the equitable
licensing program.
(3) Definitions.--In this subsection:
(A) Eligible state or locality.--The term
``eligible State or locality'' means a State or
locality that has taken steps to--
(i) create an automatic process, at no cost
to the individual, for the expungement,
destruction, or sealing of criminal records for
cannabis offenses; and
(ii) eliminate violations or other
penalties for persons under parole, probation,
pre-trial, or other State or local criminal
supervision for a cannabis offense.
(B) Individual adversely impacted by the war on
drugs.--The term ``individual adversely impacted by the
War on Drugs'' means an individual--
(i) who reports an income below 250 percent
of the Federal Poverty Level for at least 5 of
the past 10 years; and
(ii) who has been arrested for or convicted
of the sale, possession, use, manufacture, or
cultivation of cannabis (except for a
conviction involving distribution to a minor),
or whose parent, sibling, spouse, or child has
been arrested for or convicted of such an
offense.
(C) Small business concern owned and controlled by
socially and economically disadvantaged individuals.--
The term ``small business concern owned and controlled
by socially and economically disadvantaged
individuals'' has the meaning given in section
8(d)(3)(C) of the Small Business Act (15 U.S.C.
637(d)(3)(C)).
(D) State.--The term ``State'' means each of the
several States, the District of Columbia, Puerto Rico,
any territory or possession of the United States, and
any Indian Tribe (as defined in section 201 of Public
Law 90-294 (25 U.S.C. 1301) (commonly known as the
``Indian Civil Rights Act of 1968'')).
(c) Study on Programs.--
(1) GAO study.--The Comptroller General of the United
States, in consultation with the Administrator of the Small
Business Administration, shall conduct an annual study on the
individuals and entities receiving assistance under the
Cannabis Restorative Opportunity and Equitable Licensing
Programs. This study shall include the types of assistance by
state, and a description of the efforts by the Small Business
Administration to increase access to capital for cannabis-
related small business concerns owned and controlled by
socially and economically disadvantaged individuals,
individuals adversely impacted by the War on Drugs, as well as
the racial, ethnic, economic and gender composition of the
eligible State or locality.
(2) Report.--Not later than 1 year after the date of
enactment of this Act, the Comptroller General of the United
States shall submit a report on the results of the study
conducted under paragraph (1) to--
(A) the Committee on Small Business of the House of
Representatives;
(B) the Committee on Small Business and
Entrepreneurship of the Senate;
(C) the Committee on the Judiciary of the House of
Representatives; and
(D) the Committee on the Judiciary of the Senate.
SEC. 7. AVAILABILITY OF SMALL BUSINESS ADMINISTRATION PROGRAMS AND
SERVICES TO CANNABIS-RELATED LEGITIMATE BUSINESSES AND
SERVICE PROVIDERS.
(a) Definitions Relating to Cannabis-Related Legitimate Businesses
and Service Providers.--Section 3 of the Small Business Act (15 U.S.C.
632) is amended by adding at the end the following new subsection:
``(gg) Cannabis-Related Legitimate Businesses and Service
Providers.--In this Act:
``(1) Cannabis.--The term `cannabis'--
``(A) means--
``(i) all parts of the plant Cannabis
sativa L., whether growing or not;
``(ii) the seeds thereof;
``(iii) the resin extracted from any part
of such plant; and
``(iv) every compound, manufacture, salt,
derivative, mixture, or preparation of such
plant, its seeds or resin; and
``(B) does not include--
``(i) hemp, as defined in section 297A of
the Agricultural Marketing Act of 1946;
``(ii) the mature stalks of such plant,
fiber produced from such stalks, oil or cake
made from the seeds of such plant, any other
compound, manufacture, salt, derivative,
mixture, or preparation of such mature stalks
(except the resin extracted therefrom), fiber,
oil, or cake, or the sterilized seed of such
plant which is incapable of germination; or
``(iii) any drug product approved under
section 505 of the Federal Food, Drug, and
Cosmetic Act, or biological product licensed
under section 351 of the Public Health Service
Act.
``(2) Cannabis-related legitimate business.--The term
`cannabis-related legitimate business' means a manufacturer,
producer, or any person or company that is a small business
concern and that--
``(A) engages in any activity described in
subparagraph (B) pursuant to a law established by a
State or a political subdivision of a State, as
determined by such State or political subdivision; and
``(B) participates in any business or organized
activity that involves handling cannabis or cannabis
products, including cultivating, producing,
manufacturing, selling, transporting, displaying,
dispensing, distributing, or purchasing cannabis or
cannabis products.
``(3) Service provider.--The term `service provider'--
``(A) means a business, organization, or other
person that--
``(i) sells goods or services to a
cannabis-related legitimate business; or
``(ii) provides any business services,
including the sale or lease of real or any
other property, legal or other licensed
services, or any other ancillary service,
relating to cannabis; and
``(B) does not include a business, organization, or
other person that participates in any business or
organized activity that involves handling cannabis or
cannabis products, including cultivating, producing,
manufacturing, selling, transporting, displaying,
dispensing, distributing, or purchasing cannabis or
cannabis products.''.
(b) Small Business Development Centers.--Section 21(c) of the Small
Business Act (15 U.S.C. 648(c)) is amended by adding at the end the
following new paragraph:
``(9) Services for cannabis-related legitimate businesses
and service providers.--A small business development center may
not decline to provide services to an otherwise eligible small
business concern under this section solely because such concern
is a cannabis-related legitimate business or service
provider.''.
(c) Women's Business Centers.--Section 29 of the Small Business Act
(15 U.S.C. 656) is amended by adding at the end the following new
subsection:
``(p) Services for Cannabis-Related Legitimate Businesses and
Service Providers.--A women's business center may not decline to
provide services to an otherwise eligible small business concern under
this section solely because such concern is a cannabis-related
legitimate business or service provider.''.
(d) Score.--Section 8(b)(1)(B) of the Small Business Act (15 U.S.C.
637(b)(1)(B)) is amended by adding at the end the following new
sentence: ``The head of the SCORE program established under this
subparagraph may not decline to provide services to an otherwise
eligible small business concern solely because such concern is a
cannabis-related legitimate business or service provider.''.
(e) Veteran Business Outreach Centers.--Section 32 of the Small
Business Act (15 U.S.C. 657b) is amended by adding at the end the
following new subsection:
``(h) Services for Cannabis-Related Legitimate Businesses and
Service Providers.--A Veteran Business Outreach Center may not decline
to provide services to an otherwise eligible small business concern
under this section solely because such concern is a cannabis-related
legitimate business or service provider.''.
(f) Section 7(a) Loans.--Section 7(a) of the Small Business Act (15
U.S.C. 636(a)) is amended by adding at the end the following new
paragraph:
``(38) Loans to cannabis-related legitimate businesses and
service providers.--The Administrator may not decline to
provide a guarantee for a loan under this subsection, and a
lender may not decline to make a loan under this subsection, to
an otherwise eligible small business concern solely because
such concern is a cannabis-related legitimate business or
service provider.''.
(g) Disaster Loans.--Section 7(b) of the Small Business Act (15
U.S.C. 636(b)) is amended by inserting after paragraph (15) the
following new paragraph:
``(16) Assistance to cannabis-related legitimate businesses
and service providers.--The Administrator may not decline to
provide assistance under this subsection to an otherwise
eligible small business concern solely because such concern is
a cannabis-related legitimate business or service provider.''.
(h) Microloans.--Section 7(m) of the Small Business Act (15 U.S.C.
636(m)) is amended by adding at the end the following new paragraph:
``(14) Assistance to cannabis-related legitimate businesses
and service providers.--The Administrator may not decline to
make a loan or a grant under this subsection, and an eligible
intermediary may not decline to provide assistance under this
subsection to an otherwise eligible borrower, eligible
intermediary, or eligible nonprofit entity (as applicable)
solely because such borrower, intermediary, or nonprofit entity
is a cannabis-related legitimate business or service
provider.''.
(i) Small Business Investment Company Debentures to Finance
Cannabis-Related Legitimate Businesses and Service Providers.--Part A
of title III of the Small Business Investment Act of 1958 (15 U.S.C.
681 et seq.) is amended by adding at the end the following new section:
``SEC. 321. DEBENTURES TO FINANCE CANNABIS-RELATED LEGITIMATE
BUSINESSES AND SERVICE PROVIDERS.
``(a) Guarantees.--The Administrator may not decline to purchase or
guarantee a debenture made under this title to an otherwise eligible
small business investment company solely because such small business
investment company provides financing to an entity that is a cannabis-
related legitimate business or service provider (as defined in section
7(a)(38) of the Small Business Act).
``(b) Other Assistance.--A small business investment company may
not decline to provide assistance under this title to an otherwise
eligible small business concern solely because such small business
concern is a cannabis-related legitimate business or service provider
(as defined in section 7(a)(38) of the Small Business Act).''.
(j) State or Local Development Company Loans.--Title V of the Small
Business Investment Act of 1958 (15 U.S.C. 695 et seq.) is amended by
adding at the end the following new section:
``SEC. 511. LOANS TO FINANCE CANNABIS-RELATED LEGITIMATE BUSINESSES AND
SERVICE PROVIDERS.
``(a) Loans and Loan Guarantees.--The Administrator may not decline
to make or provide a guarantee for a loan under this title to an
otherwise eligible qualified State or local development company solely
because such qualified State or local development company provides
financing to an entity that is a cannabis-related legitimate business
or service provider (as defined in section 7(a)(38) of the Small
Business Act).
``(b) Other Assistance.--A qualified State or local development
company may not decline to provide assistance under this title to an
otherwise eligible small business concern solely because such small
business concern is a cannabis-related legitimate business or service
provider (as defined in section 7(a)(38) of the Small Business Act).''.
SEC. 8. NO DISCRIMINATION IN THE PROVISION OF A FEDERAL PUBLIC BENEFIT
ON THE BASIS OF CANNABIS.
(a) In General.--No person may be denied any Federal public benefit
(as such term is defined in section 401(c) of the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996 (8
U.S.C. 1611(c))) on the basis of any use or possession of cannabis, or
on the basis of a conviction or adjudication of juvenile delinquency
for a cannabis offense, by that person.
(b) Security Clearances.--Federal agencies may not use past or
present cannabis or marijuana use as criteria for granting, denying, or
rescinding a security clearance.
SEC. 9. NO ADVERSE EFFECT FOR PURPOSES OF THE IMMIGRATION LAWS.
(a) In General.--For purposes of the immigration laws (as such term
is defined in section 101 of the Immigration and Nationality Act),
cannabis may not be considered a controlled substance, and an alien may
not be denied any benefit or protection under the immigration laws
based on any event, including conduct, a finding, an admission,
addiction or abuse, an arrest, a juvenile adjudication, or a
conviction, relating to cannabis, regardless of whether the event
occurred before, on, or after the effective date of this Act.
(b) Cannabis Defined.--The term ``cannabis''--
(1) means all parts of the plant Cannabis sativa L.,
whether growing or not; the seeds thereof; the resin extracted
from any part of such plant; and every compound, manufacture,
salt, derivative, mixture, or preparation of such plant, its
seeds or resin; and
(2) does not include--
(A) hemp, as defined in section 297A of the
Agricultural Marketing Act of 1946;
(B) the mature stalks of such plant, fiber produced
from such stalks, oil or cake made from the seeds of
such plant, any other compound, manufacture, salt,
derivative, mixture, or preparation of such mature
stalks (except the resin extracted therefrom), fiber,
oil, or cake, or the sterilized seed of such plant
which is incapable of germination; or
(C) any drug product approved under section 505 of
the Federal Food, Drug, and Cosmetic Act, or biological
product licensed under section 351 of the Public Health
Service Act.
(c) Conforming Amendments to Immigration and Nationality Act.--The
Immigration and Nationality Act (8 U.S.C. 1101 et seq.) is amended--
(1) in section 212(h), by striking ``and subparagraph
(A)(i)(II) of such subsection insofar as it relates to a single
offense of simple possession of 30 grams or less of
marijuana'';
(2) in section 237(a)(2)(B)(i), by striking ``other than a
single offense involving possession for one's own use of 30
grams or less of marijuana'';
(3) in section 101(f)(3), by striking ``(except as such
paragraph relates to a single offense of simple possession of
30 grams or less of marihuana)'';
(4) in section 244(c)(2)(A)(iii)(II) by striking ``except
for so much of such paragraph as relates to a single offense of
simple possession of 30 grams or less of marijuana'';
(5) in section 245(h)(2)(B) by striking ``(except for so
much of such paragraph as related to a single offense of simple
possession of 30 grams or less of marijuana)'';
(6) in section 210(c)(2)(B)(ii)(III) by striking ``, except
for so much of such paragraph as relates to a single offense of
simple possession of 30 grams or less of marihuana''; and
(7) in section 245A(d)(2)(B)(ii)(II) by striking ``, except
for so much of such paragraph as relates to a single offense of
simple possession of 30 grams or less of marihuana''.
SEC. 10. RESENTENCING AND EXPUNGEMENT.
(a) Expungement of Non-Violent Federal Cannabis Offense Convictions
for Individuals Not Under a Criminal Justice Sentence.--
(1) In general.--Not later than 1 year after the date of
the enactment of this Act, each Federal district shall conduct
a comprehensive review and issue an order expunging each
conviction or adjudication of juvenile delinquency for a non-
violent Federal cannabis offense entered by each Federal court
in the district before the date of enactment of this Act and on
or after May 1, 1971. Each Federal court shall also issue an
order expunging any arrests associated with each expunged
conviction or adjudication of juvenile delinquency.
(2) Notification.--To the extent practicable, each Federal
district shall notify each individual whose arrest, conviction,
or adjudication of delinquency has been expunged pursuant to
this subsection that their arrest, conviction, or adjudication
of juvenile delinquency has been expunged, and the effect of
such expungement.
(3) Right to petition court for expungement.--At any point
after the date of enactment of this Act, any individual with a
prior conviction or adjudication of juvenile delinquency for a
non-violent Federal cannabis offense, who is not under a
criminal justice sentence, may file a motion for expungement.
If the expungement of such a conviction or adjudication of
juvenile delinquency is required pursuant to this Act, the
court shall expunge the conviction or adjudication, and any
associated arrests. If the individual is indigent, counsel
shall be appointed to represent the individual in any
proceedings under this subsection.
(4) Sealed record.--The court shall seal all records
related to a conviction or adjudication of juvenile delinquency
that has been expunged under this subsection. Such records may
only be made available by further order of the court.
(b) Sentencing Review for Individuals Under a Criminal Justice
Sentence.--
(1) In general.--For any individual who is under a criminal
justice sentence for a non-violent Federal cannabis offense,
the court that imposed the sentence shall, on motion of the
individual, the Director of the Bureau of Prisons, the attorney
for the Government, or the court, conduct a sentencing review
hearing. If the individual is indigent, counsel shall be
appointed to represent the individual in any sentencing review
proceedings under this subsection.
(2) Potential reduced resentencing.--After a sentencing
hearing under paragraph (1), a court shall--
(A) expunge each conviction or adjudication of
juvenile delinquency for a non-violent Federal cannabis
offense entered by the court before the date of
enactment of this Act, and any associated arrest;
(B) vacate the existing sentence or disposition of
juvenile delinquency and, if applicable, impose any
remaining sentence or disposition of juvenile
delinquency on the individual as if this Act, and the
amendments made by this Act, were in effect at the time
the offense was committed; and
(C) order that all records related to a conviction
or adjudication of juvenile delinquency that has been
expunged or a sentence or disposition of juvenile
delinquency that has been vacated under this Act be
sealed and only be made available by further order of
the court.
(c) Effect of Expungement.--An individual who has had an arrest, a
conviction, or juvenile delinquency adjudication expunged under this
section--
(1) may treat the arrest, conviction, or adjudication as if
it never occurred; and
(2) shall be immune from any civil or criminal penalties
related to perjury, false swearing, or false statements, for a
failure to disclose such arrest, conviction, or adjudication.
(d) Exception.--An individual who at sentencing received an
aggravating role adjustment pursuant to United States Sentencing
Guideline 3B1.1(a) in relation to a Federal cannabis offense conviction
shall not be eligible for expungement of that Federal cannabis offense
conviction under this section.
(e) Definitions.--In this section:
(1) The term ``Federal cannabis offense'' means an offense
that is no longer punishable pursuant to this Act or the
amendments made under this Act.
(2) The term ``expunge'' means, with respect to an arrest,
a conviction, or a juvenile delinquency adjudication, the
removal of the record of such arrest, conviction, or
adjudication from each official index or public record.
(3) The term ``under a criminal justice sentence'' means,
with respect to an individual, that the individual is serving a
term of probation, parole, supervised release, imprisonment,
official detention, pre-release custody, or work release,
pursuant to a sentence or disposition of juvenile delinquency
imposed on or after the effective date of the Controlled
Substances Act (May 1, 1971).
(f) Study.--The Comptroller General of the United States, in
consultation with the Secretary of Health and Human Services, shall
conduct a demographic study of individuals convicted of a Federal
cannabis offense. Such study shall include information about the age,
race, ethnicity, sex, and gender identity of those individuals, the
type of community such users dwell in, and such other demographic
information as the Comptroller General determines should be included.
(g) Report.--Not later than 2 years after the date of the enactment
of this Act, the Comptroller General of the United States shall report
to Congress the results of the study conducted under subsection (f).
SEC. 11. REFERENCES IN EXISTING LAW TO MARIJUANA OR MARIHUANA.
Wherever, in the statutes of the United States or in the rulings,
regulations, or interpretations of various administrative bureaus and
agencies of the United States--
(1) there appears or may appear the term ``marihuana'' or
``marijuana'', that term shall be struck and the term
``cannabis'' shall be inserted; and
(2) there appears or may appear the term ``Marihuana'' or
``Marijuana'', that term shall be struck and the term
``Cannabis'' shall be inserted.
SEC. 12. SEVERABILITY.
If any provision of this Act or an amendment made by this Act, or
any application of such provision to any person or circumstance, is
held to be unconstitutional, the remainder of this Act, the amendments
made by this Act, and the application of this Act and the amendments
made by this Act to any other person or circumstance shall not be
affected.
SEC. 13. CANNABIS OFFENSE DEFINED.
For purposes of this Act, the term ``cannabis offense'' means a
criminal offense related to cannabis--
(1) that, under Federal law, is no longer punishable
pursuant to this Act or the amendments made under this Act; or
(2) that, under State law, is no longer an offense or that
was designated a lesser offense or for which the penalty was
reduced under State law pursuant to or following the adoption
of a State law authorizing the sale or use of cannabis.
SEC. 14. RULEMAKING.
Unless otherwise provided in this Act, not later than 1 year after
the date of enactment of this Act, the Department of the Treasury, the
Department of Justice, and the Small Business Administration shall
issue or amend any rules, standard operating procedures, and other
legal or policy guidance necessary to carry out implementation of this
Act. After the 1-year period, any publicly issued sub-regulatory
guidance, including any compliance guides, manuals, advisories and
notices, may not be issued without 60-day notice to appropriate
congressional committees. Notice shall include a description and
justification for additional guidance.
SEC. 15. SOCIETAL IMPACT OF MARIJUANA LEGALIZATION STUDY.
The Comptroller General of the United States shall, not later than
2 years after the date of enactment of this Act, provide to Congress a
study that addresses the societal impact of the legalization of
recreational cannabis by States, including--
(1) sick days reported to employers;
(2) workers compensations claims;
(3) tax revenue remitted to States resulting from legal
marijuana sales;
(4) changes in government spending related to enforcement
actions and court proceedings;
(5) Federal welfare assistance applications;
(6) rate of arrests related to methamphetamine possession;
(7) hospitalization rates related to methamphetamine and
narcotics use;
(8) uses of marijuana and its byproducts for medical
purposes;
(9) uses of marijuana and its byproducts for purposes
relating to the health, including the mental health, of
veterans;
(10) arrest rates of individuals driving under the
influence or driving while intoxicated by marijuana;
(11) traffic-related deaths and injuries where the driver
is impaired by marijuana;
(12) arrest of minors for marijuana-related charges;
(13) violent crime rates;
(14) school suspensions, expulsions, and law enforcement
referrals that are marijuana-related;
(15) high school dropout rates;
(16) changes in district-wide and State-wide standardized
test scores;
(17) marijuana-related hospital admissions and poison
control calls;
(18) marijuana-related juvenile admittances into substance
rehabilitation facilities and mental health clinics;
(19) diversion of marijuana into neighboring States and
drug seizures in neighboring States;
(20) marijuana plants grown on public lands in
contravention to Federal and State laws; and
(21) court filings under a State's organized crime
statutes.
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