H.R. 5068

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5068 Introduced in House (IH)]

<DOC>

119th CONGRESS
1st Session
H. R. 5068

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

August 29, 2025

Mr. Nadler (for himself, Ms. Titus, Ms. Omar, Ms. Velazquez, Mr. Lieu, 
Ms. Norton, Mr. Cohen, Mr. McGarvey, Mr. Correa, Mr. Thanedar, Ms. 
Balint, Ms. Pingree, Mr. Tonko, Mr. Carbajal, Mr. Smith of Washington, 
Mr. Doggett, Ms. Jayapal, Ms. Tlaib, Mr. Cleaver, Ms. Wilson of 
Florida, Ms. Brownley, Ms. DeGette, Mr. Huffman, Ms. Williams of 
Georgia, Mr. Frost, Mrs. Watson Coleman, Mr. Espaillat, Ms. Kelly of 
Illinois, Ms. Garcia of Texas, Mr. Pocan, Mr. Carter of Louisiana, Ms. 
DelBene, Mr. Sherman, Mr. Garcia of Illinois, Mr. David Scott of 
Georgia, Ms. Crockett, Mr. Casar, Mr. Khanna, Mr. Johnson of Georgia, 
Mr. Mrvan, and Ms. Castor of Florida) 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 
Workforce, Ways and Means, Small Business, Natural Resources, Oversight 
and Government 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'' or the ``MORE Act''.

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) 40 States, the District of Columbia, Puerto Rico, Guam, 
and the U.S. Virgin Islands have adopted laws allowing legal 
access to cannabis, and 24 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 200,000 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 
under 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.C. 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 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.''.
(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 Opportunity 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. ESTABLISHMENT OF 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.
``(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.''.
(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, 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 will not be adequate to protect the revenue 
after commencing operations, or
``(2) such person (including, in the case of a corporation, 
any officer, director, or principal stockholder and, in the 
case of a partnership, any partner) has failed to disclose any 
material information required or made any materially 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. Establishment of Opportunity Trust Fund.''.
(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 opportunity 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 PP--COMMUNITY REINVESTMENT GRANT PROGRAM

``SEC. 3056. 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. 3057. 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. 3058. 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).
``(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.''.
(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 the possession or use of cannabis that is no 
longer prohibited pursuant to this Act or an amendment made by this 
Act, 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.

SEC. 16. STUDY ON MARIJUANA IMPAIRMENT.

(a) In General.--Not later than 1 year after the date of enactment 
of this Act, the Secretary of Transportation shall conduct a study on 
technologies and methods that law enforcement may use to determine 
whether a driver is impaired by marijuana.
(b) Requirements.--The study conducted under subsection (a) shall 
be carried out by the National Highway Traffic Safety Administration, 
in consultation with any other agency the Secretary determines 
appropriate.
(c) Authorization of Appropriations.--There is authorized to be 
appropriated $10,000,000 to carry out this section.

SEC. 17. WORKPLACE IMPACT OF MARIJUANA LEGALIZATION STUDY.

Not later than one year after the date of enactment of this Act, 
the National Institute for Occupational Safety and Health shall--
(1) conduct a study and submit to Congress a report on the 
impact of the legalization of recreational cannabis by States 
on the workplace; and
(2) develop best practices for use by employers that are 
transitioning their policies related to the use of recreational 
cannabis, prioritizing the development of best practices for 
employers engaged in Federal infrastructure projects, 
transportation, public safety, and national security.

SEC. 18. SCHOOL IMPACT OF MARIJUANA LEGALIZATION STUDY.

Not later than one year after the date of enactment of this Act, 
the Secretary of Education shall--
(1) conduct a study and submit to Congress a report on the 
impact of the legalization of recreational cannabis by States 
on schools and school-aged children; and
(2) develop best practices for use by educators and 
administrators to protect school-aged children from any 
negative impacts of such legalization.
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