cannabis administration and opportunity act

Cannabis Administration and Opportunity Act Introduced in The Senate: Will It Live up To the Hype?

Senate Majority Leader Chuck Schumer (D-NY), Senator Cory Booker (D-NJ), and Senate Finance Committee Chairman Ron Wyden introduced the Cannabis Administration and Opportunity Act (CAOA), a comprehensive measure to decriminalize, regulate, and tax cannabis, on July 21. (D-OR). The CAOA aims to “work towards reversing the many injustices the failed War on Drugs levied against Black, Brown, and low-income people,” promote the safe use of cannabis products, and facilitate potentially $45 billion or more in annual sales in the cannabis industry by 2025, according to the senators’ press release.

In order to improve the law before it was formally tabled, a discussion draught of the CAOA was initially published in 2021 along with a request for feedback from stakeholders. In addition to over 1,800 comments, other Senate committees’ criticism was also considered when creating the revised measure. The bill includes a number of significant provisions in addition to raising the legal age for cannabis use to 21. These provisions deal with highway safety, justice, immigration, and enforcement, small business administration, public health, infrastructure for education, labor, veterans, tax, and operations, banking, housing, and community development.

Federal Organizations

cannabis administration and opportunity act


However, the Food and Drug Administration (FDA) is particularly tasked with regulating cannabis products through a new Center for Cannabis Products. The bill’s different clauses generate duties for numerous federal agencies. Anyone who owns or manages a company that produces prepares, compounds or processes cannabis products is required to register with FDA and submit and maintain a list of the cannabis products they produce each year. Additionally, the National Labor Relations Act, the Fair Labor Standards Act, and the Occupational Safety and Health Act, as well as other related wage and labor laws, would need to be complied with by anyone who cultivates, produces, manufactures, packs, or warehouses cannabis and cannabis-related products (OSHA).

The National Institute of Occupational Safety and Health is mandated by the CAOA to jointly publish recommendations for employers in the cannabis business that complies with OSHA and any other relevant federal regulations. In accordance with the CAOA, the Financial Crimes Enforcement Network must also revise its existing guidance or issue new guidance that clarifies how cash held by legitimate businesses connected to the cannabis industry can be deposited. The new guidance must also make sure that providing financial services to cannabis service providers or businesses connected to the industry is not significantly hindered. Banks would still need to report questionable behavior when necessary.

Read More: Cannabis 101: What’s the Deal with Terpenes?

Administration for Small Businesses

cannabis administration and opportunity act

The CAOA would establish two programs to be managed by the Small Business Administration in order to encourage small businesses involved in the national cannabis market and to aid in their economic development (SBA). The Cannabis Restorative Opportunity Program, the first of these initiatives, would give money to eligible states and localities to encourage small companies run and controlled by people from socially and economically disadvantaged backgrounds through loans or other forms of assistance. The second initiative, known as the Cannabis Restorative Opportunity and Equitable Licensing Grant Program, would finance states and communities that put in place cannabis licensing regimes that reduce obstacles for people who have been adversely affected by the drug war.

Read More: How long does Cannabis Stay in Your system?


In terms of taxes, the CAOA uses a phase-in period of five years for a new federal excise tax rate. For major cannabis firms, the tax rates on cannabis sales in the first two years following the CAOA’s passage would be 10%, 15% in the third year, 20% in the fourth, and 25% in the fifth. Rates for small and medium-sized firms are reduced by half. Initial provisions of the CAOA’s discussion draught mandated that licensed cannabis firms submit tax payments every two weeks and keep a surety bond on file to cover any future excise tax liabilities.

With the new CAOA, cannabis businesses with less than $100,000 in tax liabilities from the previous year are exempt from the bond requirement. However, there is a quarterly tax reporting requirement for licensed enterprises with excise tax liabilities under $100,000 and a yearly tax filing need for those with excise tax liabilities under $10,000. Licensed enterprises with tax liabilities greater than $100,000 must still pay taxes every two weeks.

cannabis administration and opportunity act

Social Justice

The measure contained a number of social justice provisions because one of its main stated goals was to address the effects of the drug war. The bill encourages financial institutions to offer services to small or minority-owned businesses, increases funding for the Community Development Financial Institutions Fund established by the Community Development Banking and Financial Institutions Act of 1994, and invests in minority depository institutions.

A person cannot be denied financial services under the CAOA if they had previously been convicted of a nonviolent cannabis offense. The law would also offer technical support and loans to companies doing business within an Indian tribe’s boundaries.

Read More: Stairway Cannabis: An Introduction to The Stairway to Heaven Cannabis Strain Buds

Possibilities for Passage

One of numerous cannabis decriminalization bills presently before Congress is the CAOA, and it is unquestionably the most comprehensive. However, if the Democrats lose the Senate in this year’s midterm elections, incremental reform may be the only option for cannabis reform in the near future. One example of a bipartisan modest reform is the SAFE Banking Act, which would merely allow banks to service cannabis institutions without fear of retaliation. But Senator Schumer and other Senate Progressives have declared they won’t back the SAFE Banking Act until more comprehensive criminal changes, including those in the CAOA, are addressed.

cannabis administration and opportunity act

Since the Senate only has a little more than two weeks left in its current session before the midterm elections, the CAOA itself is unlikely to receive much attention. However, the introduction of the bill may aid the Senate in reaching a consensus on an improved SAFE Banking Act that includes some social justice provisions.

In order to pave the way for a potential December agreement, the SAFE Banking Act was incorporated into the National Defense Authorization Act, which was passed by the House. If the Democrats reach an agreement, the SAFE Banking Act already has the support of nine Senate Republicans. Minority Leader McConnell (R-KY) might not prevent it from passing if they add one more amendment.

Stay tuned to enviro360 for more infotainment news.