>>However, Congress should clearly delineate whether wholesale transactions are allowed in interstate commerce or whether retail sales can be made to customers through the mail or internet across state lines. Congress ought to facilitate free and open interstate commerce as there is with most other commercial products in the U.S.
Amazon’s mouth waters.
>> Alcohol is now regulated primarily at the state level with an overlapping federal scheme to facilitate interstate and international commerce.
This is what so many investors miss when comparing alcohol to cannabis. The states have a large degree of control and that will not likely change. What will change is the feds overlaying of trade practices.
>> TTB requires producers of spirits and wine to acquire a permit from the agency to engage in interstate commerce for these products so federal regulators can track interstate shipments and coordinate those transfers with respective state regulators. Given the seed-to-sale inventory tracking systems used by state marijuana regulators, such coordination for the cannabis industry would be necessary for state regulators to ensure inventory imported from another state is tracked appropriately. This makes TTB the preferred federal regulator of state- licensed marijuana businesses for adult-use products and adult-use interstate commerce. Furthermore, TTB has an institutional history of working with the FDA on consumable adult-use products where the FDA’s traditional food additive and ingredient authority comes into play. Accordingly, the agency is in the best position to ensure not only that adult-use flower and concentrate products are facilitated in commerce, but also edible products.
Consistent with what we were hearing in our NY & 3 Tier AMA.
>> The most direct route of freeing up financial services to the marijuana industry is to de- schedule marijuana and regulate it. This ends any question of federal illegality and uncertainty for financial and securities exchange institutions. Absent this change, Congress could amend the Bank Secrecy Act, PATRIOT Act, racketeering and aiding and abetting laws, and the panoply of related statutes directly to exclude actions involving only state-licensed marijuana commercial activity. Regardless, agencies out to ensure that guidance is updated in a de- scheduling environment to ensure outdated policies do not inhibit businesses from access.
>> De-scheduling cannabis entirely (or re-scheduling marijuana to a Schedule III or more permissive classification) will automatically resolve this issue (280e) for state-licensed marijuana companies.
>> Congress should follow the approach to regulation recommended here and allow the TTB to act as lead regulator to minimize the costs of federal regulations.
To minimize TTB collection efforts we think they will look to tax at first sale not sale to consumer. This is the difference between 30,000 national accounts and 300,000 points of sale. This has huge implications on verticality that are magnified with interstate commerce.
>> Reason Foundation has recommended that states implement no more than a 15 percent ad valorem excise tax at retail to minimize market distortions.30 Any additional federal excise tax could cover the cost of regulation with a modest federal excise rate (e.g. less than one-half of one percent) on the wholesale price of cannabis products. In addition, a twenty-year mortarium on increases in the excise rate would promote competitiveness and allow states to reach tax equilibrium.
MORE has a 5% flower increasing to 8% in year 5, 8% on non flower.
>> Congress needn’t usurp this authority but should defer to state regulators to govern marijuana markets within their own states as has been done with wine and spirits.
>> Federal authorities are granted the power to regulate commerce between the states and should limit their role to facilitating these transactions only to ensure a safe, efficient, and functional market.
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