The “New” MORE Act: Five Big Changes

July 6, 2021

Just a month ago, Congressman Jerrold Nadler introduced the MORE (Marijuana Opportunity Reinvestment and Expungement) Act of 2021 in the US House of Representatives. If enacted, it would end the federal prohibition of cannabis. The previous MORE Act, introduced in 2019, passed the full House in December 2020, but died in the Senate. With strong public support, bipartisan political support, and major corporations such as Amazon on board, the More Act of 2021 could become law, creating the framework for how the US will end cannabis prohibition. Though similarly named, the new bill is drastically different from the previous version.

1. Is Bigger Better?

All you need to do is take a look at the last page of each bill to see how different they are. The 2019 bill, at 35 pages long, would have ended the federal prohibition of cannabis and provided guidance regarding taxation and regulation. The 2021 MORE Act runs 90 pages. It would expand restorative justice programs, while enacting a comprehensive system of taxation and regulation.

2. Restorative Justice

A major goal of both bills is to repair some of the harms created by failing U.S. drug policy. The 2019 bill would have prohibited individuals who had been convicted of certain crimes from participating in the legal cannabis industry. The 2021 act would eliminate some of those prohibitions, allowing more people to become involved in a cannabis business. Additionally, the current bill would create a community investment fund to provide grants and opportunities to individuals and communities negatively impacted by the war on drugs. 

3. Taxation

The 2019 bill proposed a flat five percent (5%) excise tax on the sales price of cannabis, paid at the manufacturer level.  The current bill proposes a more complex, and some say, more socially responsible, tax policy.  Rates would start at 5%, and progress to 8% in year five, after enactment.  After year five, rates would be set by weight, and THC content.  This system is similar to how alcohol products are taxed. The bill would also levy a special occupation tax on every cannabis cultivation and manufacturing facility.

4. Regulation

The previous bill devoted just 3 ½ pages to creating a basic framework for taxation and regulation, relying on the rulemaking process to fully develop cannabis policy. This year’s version includes 30 pages of comprehensive taxation and regulation policies, covering such areas as licensing, compliance, due process appeals, and civil and criminal penalties.  

5. Federal Permit Requirement

The 2019 MORE act defined cannabis cultivators and processors as “manufacturers”, but made no mention of licensing requirements.  The MORE act of 2021, specifically requires cannabis manufacturers to obtain a federal permit for each facility, and grants the authority to the U.S. Treasury Department to develop licensing regulations. The act would impose civil and criminal penalties on individuals and business entities that fail to comply with federal regulations.  Cannabis importers and exporters would be held to similar standards.

We’ll take a deeper look at the 2021 MORE Act tax and regulatory provisions in upcoming posts, but with the framework in place, cannabis stakeholders can start preparing for these big changes.

Verde Compliance Partners is a national consulting firm focused on guiding clients through federal cannabis permitting, taxation, and regulatory compliance. Our firm prepares and navigates cannabis growers and processors through the regulatory, legal, and administrative requirements necessary to comply with current and future federal regulations.  With decades of experience in high level positions in the U.S. Tax and Trade Bureau (TTB), and it’s predecessor, the Bureau of Alcohol, Tobacco, and Firearms (BATF), Verde is uniquely qualified to prepare cannabis industry stakeholders for the implementation of federal regulation.

Just a month ago, Congressman Jerrold Nadler introduced the MORE (Marijuana Opportunity Reinvestment and Expungement) Act of 2021 in the US House of Representatives. If enacted, it would end the federal prohibition of cannabis. The previous MORE Act, introduced in 2019, passed the full House in December 2020, but died in the Senate. With strong public support, bipartisan political support, and major corporations such as Amazon on board, the More Act of 2021 could become law, creating the framework for how the US will end cannabis prohibition. Though similarly named, the new bill is drastically different from the previous version.

1. Is Bigger Better?

All you need to do is take a look at the last page of each bill to see how different they are. The 2019 bill, at 35 pages long, would have ended the federal prohibition of cannabis and provided guidance regarding taxation and regulation. The 2021 MORE Act runs 90 pages. It would expand restorative justice programs, while enacting a comprehensive system of taxation and regulation.

2. Restorative Justice

A major goal of both bills is to repair some of the harms created by failing U.S. drug policy. The 2019 bill would have prohibited individuals who had been convicted of certain crimes from participating in the legal cannabis industry. The 2021 act would eliminate some of those prohibitions, allowing more people to become involved in a cannabis business. Additionally, the current bill would create a community investment fund to provide grants and opportunities to individuals and communities negatively impacted by the war on drugs. 

3. Taxation

The 2019 bill proposed a flat five percent (5%) excise tax on the sales price of cannabis, paid at the manufacturer level.  The current bill proposes a more complex, and some say, more socially responsible, tax policy.  Rates would start at 5%, and progress to 8% in year five, after enactment.  After year five, rates would be set by weight, and THC content.  This system is similar to how alcohol products are taxed. The bill would also levy a special occupation tax on every cannabis cultivation and manufacturing facility.

4. Regulation

The previous bill devoted just 3 ½ pages to creating a basic framework for taxation and regulation, relying on the rulemaking process to fully develop cannabis policy. This year’s version includes 30 pages of comprehensive taxation and regulation policies, covering such areas as licensing, compliance, due process appeals, and civil and criminal penalties.  

5. Federal Permit Requirement

The 2019 MORE act defined cannabis cultivators and processors as “manufacturers”, but made no mention of licensing requirements.  The MORE act of 2021, specifically requires cannabis manufacturers to obtain a federal permit for each facility, and grants the authority to the U.S. Treasury Department to develop licensing regulations. The act would impose civil and criminal penalties on individuals and business entities that fail to comply with federal regulations.  Cannabis importers and exporters would be held to similar standards.

We’ll take a deeper look at the 2021 MORE Act tax and regulatory provisions in upcoming posts, but with the framework in place, cannabis stakeholders can start preparing for these big changes.

Verde Compliance Partners is a national consulting firm focused on guiding clients through federal cannabis permitting, taxation, and regulatory compliance. Our firm prepares and navigates cannabis growers and processors through the regulatory, legal, and administrative requirements necessary to comply with current and future federal regulations.  With decades of experience in high level positions in the U.S. Tax and Trade Bureau (TTB), and it’s predecessor, the Bureau of Alcohol, Tobacco, and Firearms (BATF), Verde is uniquely qualified to prepare cannabis industry stakeholders for the implementation of federal regulation.

Just a month ago, Congressman Jerrold Nadler introduced the MORE (Marijuana Opportunity Reinvestment and Expungement) Act of 2021 in the US House of Representatives. If enacted, it would end the federal prohibition of cannabis. The previous MORE Act, introduced in 2019, passed the full House in December 2020, but died in the Senate. With strong public support, bipartisan political support, and major corporations such as Amazon on board, the More Act of 2021 could become law, creating the framework for how the US will end cannabis prohibition. Though similarly named, the new bill is drastically different from the previous version.

1. Is Bigger Better?

All you need to do is take a look at the last page of each bill to see how different they are. The 2019 bill, at 35 pages long, would have ended the federal prohibition of cannabis and provided guidance regarding taxation and regulation. The 2021 MORE Act runs 90 pages. It would expand restorative justice programs, while enacting a comprehensive system of taxation and regulation.

2. Restorative Justice

A major goal of both bills is to repair some of the harms created by failing U.S. drug policy. The 2019 bill would have prohibited individuals who had been convicted of certain crimes from participating in the legal cannabis industry. The 2021 act would eliminate some of those prohibitions, allowing more people to become involved in a cannabis business. Additionally, the current bill would create a community investment fund to provide grants and opportunities to individuals and communities negatively impacted by the war on drugs. 

3. Taxation

The 2019 bill proposed a flat five percent (5%) excise tax on the sales price of cannabis, paid at the manufacturer level.  The current bill proposes a more complex, and some say, more socially responsible, tax policy.  Rates would start at 5%, and progress to 8% in year five, after enactment.  After year five, rates would be set by weight, and THC content.  This system is similar to how alcohol products are taxed. The bill would also levy a special occupation tax on every cannabis cultivation and manufacturing facility.

4. Regulation

The previous bill devoted just 3 ½ pages to creating a basic framework for taxation and regulation, relying on the rulemaking process to fully develop cannabis policy. This year’s version includes 30 pages of comprehensive taxation and regulation policies, covering such areas as licensing, compliance, due process appeals, and civil and criminal penalties.  

5. Federal Permit Requirement

The 2019 MORE act defined cannabis cultivators and processors as “manufacturers”, but made no mention of licensing requirements.  The MORE act of 2021, specifically requires cannabis manufacturers to obtain a federal permit for each facility, and grants the authority to the U.S. Treasury Department to develop licensing regulations. The act would impose civil and criminal penalties on individuals and business entities that fail to comply with federal regulations.  Cannabis importers and exporters would be held to similar standards.

We’ll take a deeper look at the 2021 MORE Act tax and regulatory provisions in upcoming posts, but with the framework in place, cannabis stakeholders can start preparing for these big changes.

Verde Compliance Partners is a national consulting firm focused on guiding clients through federal cannabis permitting, taxation, and regulatory compliance. Our firm prepares and navigates cannabis growers and processors through the regulatory, legal, and administrative requirements necessary to comply with current and future federal regulations.  With decades of experience in high level positions in the U.S. Tax and Trade Bureau (TTB), and it’s predecessor, the Bureau of Alcohol, Tobacco, and Firearms (BATF), Verde is uniquely qualified to prepare cannabis industry stakeholders for the implementation of federal regulation.