With DEA's marijuana rescheduling hearing now delayed indefinitely, the most promising prospect for meaningful cannabis reform may lie in the hands of Congress. Seemingly undeterred by the strong headwinds that have scuttled prior attempts to pass comprehensive federal cannabis legislation, bipartisan coalitions have reintroduced the Strengthening the Tenth Amendment Through Entrusting States 2.0 Act (the "STATES 2.0 Act") and the Preparing Regulators Effectively for a Post-Prohibition Adult Use Regulated Environment Act (the "PREPARE Act"). Of course, both bills are familiar to cannabis industry veterans and beltway denizens alike, having been introduced (and having failed) in multiple prior sessions of Congress. The STATES 2.0 Act was first introduced in 2018 and reintroduced in 2019 and 2023, but failed to pass each time. The PREPARE Act was first introduced in 2022 and reintroduced in 2023, but failed to pass both times. Both bills were reintroduced in the House of Representatives on April 17, 2025.
The STATES 2.0 Act declares that "States should be empowered to determine their own destiny for cannabis markets" and would, among other things:
- Install the Bureau of Alcohol and Tobacco Tax and Trade Bureau as the primary federal regulator of marijuana;
- Establish a federal excise tax on marijuana to fund federal oversight;
- Allow for interstate commerce of marijuana between jurisdictions where marijuana production/consumption is legal;
- Essentially remove from controlled substances schedules marijuana handled/produced in compliance with state law;
- Reserve to states the right to impose reasonable time, place and manner restrictions or public health and safety restrictions on marijuana;
- Bar the distribution or sale of marijuana to persons under the age of 21 other than for medical purposes;
- Require the Attorney General to promulgate rules not later than 180 days after the date of the enactment of this Act;
- Grant the Food and Drug Administration ("FDA") authority over marijuana products that qualify as foods or dietary supplements, drugs or cosmetics and require FDA to promulgate regulations on contaminant testing, manufacturing practices, and marketing practices for marijuana products; and
- Exempt conduct in compliance with the Act from application of Section 280E of the Internal Revenue Code.
In turn, the PREPARE Act would, among other things:
- Require the Attorney General to establish a Commission on the
Federal Regulation of Cannabis ("Commission'') to
study a plausible and prompt pathway to cannabis regulation, which
shall propose measures to remedy, among other things:
- The impact of cannabis criminalization, particularly on minority, low income, and veteran communities;
- The lack of access to the financial service sector for cannabis entrepreneurs and their affiliated industries;
- The lack of cannabis research;
- The lack of consistent regulations for cannabis product and safety, use, and labeling requirements, including requirements to protect youth and reduce harms to youth;
- The lack of efficient cannabis revenue reporting and collecting, including efficient and tenable Federal revenue frameworks; and
- The lack of guidance regarding the successful coexistence of the cannabis industry and the hemp industry.
- Require the Commission to:
- Open a public comment period for the establishment of federal cannabis regulations;
- Convene public witness hearings and solicit written or verbal testimony from participants in the cannabis industry, which must include testimony from representatives of single-state cannabis operators, representatives from multi-state cannabis operators and individuals who were formerly incarcerated as a result of cannabis convictions;
- Publish its initial findings and recommendations;
- Solicit public comments from stakeholders on the Commission's initial findings and recommendations; and
- Publish a final report.
Although skeptics may point to the troubled history of both bills and the current DEA rescheduling hearing quagmire as evidence that any proposals for comprehensive federal cannabis reforms are doomed to fail for the foreseeable future, Representative Dave Joyce (R-OH), a co-sponsor of both bills and Co-Chair of the Congressional Cannabis Caucus, has struck a more optimistic tone citing consensus among members of Congress that the current federal approach to cannabis is no longer tenable. In a press release accompanying the reintroduction of the STATES 2.0 Act, Representative Joyce acknowledged that "[w]hether a state is pro-legalization or anti-legalization, we can all agree that the current federal approach to cannabis policy is not working. As President Trump has acknowledged, the existing policy has caused unnecessary harm and squandered taxpayer dollars by diverting law enforcement resources from combatting violent crimes to making needless arrests and facilitating incarcerations for small possessions of state legal marijuana."
In a separate press release on the PREPARE Act, which is co-sponsored by House Minority Leader Hakeem Jeffries (D-NY), Representative Joyce foreshadowed the "inevitable end to federal cannabis prohibition" and declared that the bill would equip Congress "to develop a much-needed federal regulatory framework that not only respects the unique needs, rights, and laws of each state, but also ensures a responsible end to prohibition and a safer future for our communities."
Upon reintroduction, the STATES 2.0 Act was referred to the House Committees on Energy and Commerce, Judiciary, and Transportation and Infrastructure. In turn, the PREPARE Act was referred to the House Committees on Energy and Commerce, Judiciary, Ways and Means, Agriculture, and Financial Services. We will continue to track both bills as they move through the House of Representatives and will report on any notable progress.
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