Last Friday, the House voted to pass the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act, a bill that would federally deschedule cannabis and help clear weed offenders’ criminal records. Specifically, the bill would allow individual states to legalize cannabis with no fear of federal interference, while also creating a federal excise tax that would be used to fund programs to help marginalized communities.
The bill passed the Democrat-controlled House with a largely partisan 228 to 164 vote, but insiders believe there is no chance the bill will survive the GOP-dominated Senate. But a new report by the Congressional Budget Office (CBO) may convince some financially-minded Senators to turn their heads. According to this report, the MORE Act could bring the US Treasury as much as $13.7 billion by 2030, while also decreasing federal prison spending by as much as $1 billion.
According to the report, $8 billion of this revenue would come from federal business, income, and payroll taxes imposed on legal weed businesses. As it stands now, state-legal weed businesses are operating in violation of federal law, leaving them unable to access banking services or federal loans. These restrictions also prevent the feds from collecting standard taxes on many of these businesses, though.
The MORE Act would also impose an additional 5 percent excise tax on cannabis sales, which could bring in another $5.7 billion a year. But instead of allowing Congress to do whatever they want with this cash, the bill would direct 100 percent of this revenue to a new program called the Opportunity Trust Fund. This fund would disperse an estimated $3 billion to help the Department of Justice provide job training, legal aid, and other services to disadvantaged communities. Another $2.7 billion would go to the Small Business Administration, who would use it to create grants for small legal weed businesses.
The bill would also stop the federal government from prosecuting people for non-violent cannabis crimes, while also allowing people currently imprisoned for these crimes to walk free. The CBO estimates that this would reduce the total time served by US inmates by “73,000 person-years.” This massive decrease in prison population would save the government around $1 billion between 2021 and 2030.
The report also notes that the bill would create some costs for the US government, including the costs of managing the Opportunity Trust Fund and creating new federal regulations. The CBO predicts that the expected reduction in the prison population could increase federal Medicare and Medicaid spending by up to $636 million, as the newly-released prisoners would all instantly become eligible for these federal benefits. These costs would all be more than offset by the massive amount of tax revenue being collected, though.
Again, the bill has little chance of being approved by the Senate or signed into law by the lame-duck president. The Democratic party still has a shot at winning back the Senate by way of Georgia’s two open elections, though — so with luck, next January may give Congress another chance to approve this historic legislation.
