New Congressional Bills Aimed At Federal Tax Relief For Adult-Use Cannabis

While full federal legalization appears unlikely to come before the current Congress, two new bills introduced in the U.S. House of Representatives could offer tax reform and relief for cannabis operators in adult-use states. The first, from Democrat Hakeem Jeffries and Republican Dave Joyce, is the PREPARE Act. It stands for Preparing Regulators Effectively for a Post-prohibition Adult-use Regulated Environment, and would create a Commission on the Federal Regulation of Cannabis that would be tasked with creating a regulatory framework to accommodate state-level legalization.

The second bill, the STATES 2.0 Act, was introduced by Joyce and co-chair of the Cannabis Caucus, Dina Titus. The act—Strengthening the Tenth Amendment Through Entrusting States—would eliminate federal enforcement in adult-use states, including directing the government to ignore federal scheduling in adult-use and medical markets. This de facto rescheduling would mean that legally compliant businesses would not be subject to the IRS section 280E, which has locked the cannabis industry out of many tax benefits. The fate of both bills is uncertain in the Republican-controlled Congress.—Shane English

Tagged : cannabis, PREPARE act, STATE 2.0

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