Tax Update Blog

Update: House Committee Approves Chamber Vote to Decriminalize, Tax Cannabis

April 1, 2022 | Blog
By Jay Heflin

Update: The House on April 1st approved this legislation and adopted the first two amendments (listed below). The bill (amendments included) now travels to the Senate where passage is not expected. It is also not clear when the Senate will consider this bill.


The House Rules Committee on March 30th voted to allow a chamber vote on legislation that would decriminalize cannabis at the federal level and create a sales tax on such products.

The House could vote on this bill as early as March 31st and it is expected to pass. Upon approval, the legislation would travel to the Senate, where passage is not expected. In the prior Congress, the House approved this bill, but a vote on it never occurred in the Senate.

Making it Legal:

The bill decriminalizes marijuana at the federal level by removing the substance from the Controlled Substances Act.

It also requires federal courts to expunge prior convictions, allows prior offenders to request expungement, and requires courts, on motion, to conduct re-sentencing hearings for those still under supervision.

Possible Amendments to the bill:

The Committee approved three amendments to the bill that the full chamber will consider. They are:

  • Authorizing $10 million for the National Highway Traffic Safety Administration to conduct a study on technologies and methods that law enforcement may use to determine whether a driver is impaired by marijuana.
  • Directing the National Institute for Occupational Safety and Health (NIOSH) to conduct a study on the impact of legalization to the workplace, using states that have legalized recreational use of cannabis as a guide, and requires NIOSH to develop best practices for employers as companies transition their policies related to cannabis, prioritizing employers engaged in federal infrastructure projects, transportation, public safety, and national security. Directs the Department of Education to conduct a study on the impact of legalization to schools and school aged children, using states that have legalized recreational use of cannabis as a guide, and requires the Department of Education to develop best practices for educators and administrators to protect children from any negative impacts.
  • Ensuring that cannabis-use shall not be the reason for denying or rescinding a security clearance.

Taxing Cannabis:

The bill creates a 5% sales tax on marijuana and marijuana products, which would eventually increase to 8%.

Revenue from the sales tax would go to an “Opportunity Trust Fund” that the legislation would also create. This fund includes three grant programs, according to the House Judiciary Committee:

The Community Reinvestment Grant Program: Provides services to the individuals most adversely impacted by the War on Drugs, including job training, re-entry services, legal aid, literacy programs, youth recreation, mentoring, and substance use treatment.  

The Cannabis Opportunity Grant Program: Provides funds for loans to assist small businesses in the marijuana industry that are owned and controlled by socially and economically disadvantaged individuals.

The Equitable Licensing Grant Program: Provides funds for programs that minimize barriers to marijuana licensing and employment for the individuals most adversely impacted by the War on Drugs.

The Joint Committee on Taxation estimates that if the bill were enacted it would raise roughly $8 billion over the next ten years. In Washington, that is not a lot of money and will likely not move any deficit-conscience lawmaker toward supporting the bill. 

What’s Next:

History is expected to repeat itself in that the legislation will advance from the House but not pass the Senate. The only difference might be that the bill receives a vote in the Senate. However, it is not expected to pass even though the upper chamber unanimously passed legislation last week to expand scientific and medical research on marijuana and its compounds.

Stay informed!

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