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July 18, 2019

The Hon. Jerrold Nadler, Chair CC: Hon. Nancy Pelosi, Speaker
The Hon. Doug Collins, Ranking Member Hon. Kevin McCarthy, Minority Leader
House Judiciary Committee Hon. Lindsey Graham, Senate Judiciary Chair
2141 Rayburn House Office Building Hon. Dianne Feinstein, Sen. Ranking Member
United States House of Representatives House Judiciary Committee Members
Washington, DC 20515

Re: Comprehensive Cannabis Reform and the Need for Social Equity and Reparative Justice

Dear Judiciary Chair Nadler and Ranking Member Collins:

Over the course of the past decade, attitudes and laws concerning cannabis have shifted dramatically.
Prior to the 2012 election, fewer than half of the states had medical cannabis laws, Congress was still
funding the Department of Justice’s efforts to prosecute medical cannabis patients while the DEA was
conducting paramilitary-style raids on the collectives that provided patients with their medicine. But
with the 2012 elections came the first two states to legalize the regulation of marijuana for adult-use
customers and with it, the legal industry as we know it today began to emerge.

To date, 33 states along with the District of Columbia, Puerto Rico, and several U.S. territories have
adopted comprehensive medical cannabis laws, while 11 states and the District have legalized
possession and use of cannabis for adults 21 and over.

National polling consistently shows there is now support for legalization across age ranges and the
political spectrum. An October 2018 Gallup poll showed national support for legalization at 66%, up
from 46% in 2010. Majority support is now found across all age ranges and the political spectrum, with
53% of Republicans and 59% of individuals 55 and older supporting legalization.

And while Congress has been slow to act in response to these changes, it has recognized that
prosecuting individuals complying with state medical cannabis laws is bad policy. In December 2014, it
passed a spending amendment that prohibits such prosecutions. In the years since, DOJ has largely
allowed state cannabis programs to exist without significant interference, enabling states to take
advantage of this new economy beginning to take root.

In 2018, combined sales of regulated medical and adult-use cannabis topped $10.4 billion, and the 7
states with active adult-use markets generated nearly $1.2 billion in tax revenue. The industry is now
employing well over 200,000 people. And yet, with this rapidly growing new industry and broad popular
support for legalization, many of the communities who were devastated by the decades-long War on
Drugs are now being left behind.

Some of those being left behind are currently locked up for engaging in conduct that is now legal in
several states. More than 600,000 Americans were arrested last year for cannabis-related crimes. These

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arrests are almost exclusively made in low-income areas and overwhelming take place in communities
of color.

Many others are being left behind because a previous conviction often is a disqualifying factor to
become an owner or employee in the new legal “green-rush.” The focus on enforcing cannabis laws
rather than addressing the educational, health, and employment needs of these communities means we
have long been failing them and are now punishing them again by denying them access to this emerging
economy.

Still others are being left behind because they are unable to come up with the capital necessary to break
into the industry. For example, many states have steep application fees that prevent all but the most
well-financed players from even attempting to get a license.

There are many who would argue that Congress should not get into the business of picking winners and
losers. We would argue that if Congress chooses to end federal cannabis prohibition but chooses not to
address these glaring racial and economic disparities in the process, it will in fact pick those who are
already the most well-financed, the least likely to have suffered an arrest and conviction, and almost
certainly do not come from the communities that were severely harmed by decades of prohibition to be
the winners of the new economy. Indeed, it will have also picked the communities who suffered the
most under prohibition to continue to lose once cannabis is no longer a criminal offense.

For these reasons, we the undersigned cannabis businesses and organizations urge Congress to take the
following steps to ensure that all Americans and all communities are on a more equal footing when it
comes to the potential to benefit from this new industry:

Remove marijuana from the Controlled Substances Act (CSA). Descheduling cannabis from the CSA
must be the cornerstone of any truly comprehensive approach to federal reform. Other means of
dealing with the core issue of federal prohibition, such as exemptions from the CSA in states that have
legalized, are less predictable in their implications from a legal standpoint. Many of the following urgent
requests below would not be possible if Congress merely exempted from the CSA in states that have
legalized it.

Allow banks to work with businesses like they can with any other ordinary business. Only the largest
operators in the industry can weather the substantial financial inefficiencies of being forced to work in
an all-cash environment. While this is feasible without removal of cannabis from the CSA and legislation
such as the SAFE Banking Act would be beneficial to the industry, descheduling would fully enable the
financial service industry to embrace cannabis businesses.

Provide tax relief to businesses who currently pay an effective federal rate that is more than double
that of other businesses. State legal cannabis businesses are subject to Section 280e of the Internal
Revenue Code which forbids those selling Schedule 1 or 2 substances from making ordinary business
deductions. Again, this relief would provide the most benefit to small and mid-sized businesses that are
not able to grow when paying an effective federal tax rate of approximately 50%. This can be addressed
through narrow exemption legislation but would be more pragmatic through a descheduling bill.

Create a source of federal funds to support state equity programs to foster participation in the
industry from underrepresented groups. We are seeing in real-time what an industry without adequate
equity programs looks like, and we know that it means women, minorities, and low-income individuals

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are the least likely to own these businesses or even be promoted into management positions. Funds for
equity programs should come from tax revenue earmarked from cannabis businesses. This will help
ensure that those who have benefited the most from fortunate circumstances will not monopolize the
benefits of this economy. This can only take place if cannabis is descheduled.

Utilize existing federal programs to facilitate access to capital and other assistance for small cannabis
businesses. Another hurdle imposing a barrier to entry into the cannabis industry is the lack of capital
available to emerging cannabis businesses. Cannabis businesses also are denied access to emergency
relief aid following a natural disaster. The federal government already has programs, such as those
under the Small Business Administration, that could potentially help remedy this problem but cannabis
businesses are ineligible. Comprehensive access to these programs can only occur if cannabis is
descheduled.

Retroactive justice for those with convictions. If cannabis is no longer a crime, those with a previous
cannabis conviction should no longer be punished. This means expunging old convictions and creating
an opportunity for those currently incarcerated to vacate their sentences. Additionally, people should
not be denied any public benefit, such as student loans, public housing, or nutritional assistance, for
engaging in state-legal cannabis activity. This can only take place if cannabis is descheduled.

Investing in communities that suffered the most. The communities that incurred the most harm caused
by the disproportionate enforcement of cannabis laws deserve to be given the greatest priority when it
comes to receiving the public benefits that flow from legalization. This means that tax revenue collected
from cannabis businesses should fund programming for a broad range of services to help repair these
communities. Again, this can only take place if cannabis is descheduled.

Some in Congress may feel it is too soon to end federal cannabis prohibition or that Congress does not
have a responsibility to address the harms created by how this policy has targeted certain communities.
But if Congress declines to harmonize state and federal cannabis laws or fails to take responsibility for
the consequences of disproportionate enforcement, the problems caused by prohibition will continue to
persist. The time to wait and see is over. Now is the time for Congress to take the bold but ultimately
pragmatic step to deschedule cannabis along with approving the necessary funding and programming to
support the communities that incurred the most harm because of federal prohibition.

Sincerely,

Multi-State Businesses National


Consumer Research Around Cannabis
4Front Ventures National
National, HQ: Phoenix, AZ DatapointPOS
American Cannabinoid Clinics National
National Denver Relief Consulting
Berkeley Patients Group CO, IL, OH, MD, NV
Berkeley, CA and Nevada Indiva Advisors LLP
CannaAdvise, a division of The Gooch Agency 10 states
MD, DC, VA, PA kindColorado, LLC
CannaGather National, HQ: Denver, CO
National, HQ: New York, NY MJ Freeway
CanSact LLC 29 US States and 13 countries

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Relief Scout COHNNABIS
San Francisco, CA; Groton, MA Denver, CO
Retail Education Tools, DBA toptender Computer Underground Railroad Ent.
WA, OR, CA, NV, MD, MI McNeal, AZ
The 420 Club, LLC Control Point Consulting
Las Vegas, NV; CA; and OR Las Vegas, NV
Vangst Doctors Knox, Inc.
CO, CA, and MA Nevada
Dr. Paul’s
Individual State Businesses San Francisco, CA
Eugene OG
1906 Eugene, OR
Denver, CO Front Row Travels
Absolute Energy Raters Baltimore, MD
Richmond, TX Green Compass
AC Group Wilmington, NC
Oregon Green Stem LLC
ADVENT Academy Michigan
Wyoming Greene Care
AEssenseGrows Missouri
Sunnyvale, CA Harborside
Agri Integrated Solutions Oakland, CA
Little Rock, AR Herban Rootz
Agzone Services LLC St. Louis, MO
Paso Robles, CA High Honey LLC
Akene Consulting, LLC Santa Cruz, CA
San Jose, CA Highern Chef Edibles
Amelia's Arizona
Jonesboro, GA Horizon Family Medical
Arkley Accounting Group New Windsor, NY
Washington Immersive, LLC
Best Budz, LLC Nevada
Missouri KC Herbal ReLeaf LLC
Biscotti Missouri
Oakland, CA Khemia Manufacturing
Blackbird Logistics Sacramento, CA
Oakland, Culver City, Santa Rosa, CA Kirk Consulting
Breeze Trees, LLC San Luis Obispo County, CA
Bellingham, WA Kush Gardens
Buds & Roses De Beque, CO
Los Angeles, CA Langford Tax Service
Canna Bistro Atlanta, GA
Atlanta, GA Lazercat
Cannabis Education Solutions Idaho Springs, CO
Hyattsville, MD Little House Foods
Chemistry Portland, OR
Oakland, CA Lucy Sky Cannabis Boutique
Denver, CO

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Millennia Solutions Verdant Leaf Farms
San Juan, PR Oregon
Mr. Herb, LLC Wasatch Greenscapes
Los Angeles, CA Salt Lake City, UT
Natura Life Science Washington Bud Company
Sacramento, CA Arlington, WA
New Technology Enterprises, Inc. Yvette McDowell & Assoc.
Oceano, CA Los Angeles, CA
Om of Medicine Washington’s Finest Cannabis
Ann Arbor, MI Spokane, WA
Oracle Infused Wellness Co. WeBaked, Inc.
Portland, OR Washington, DC
OZ. Recreational Cannabis
Seattle, WA Law Offices
Perpetual Harvest Sustainable Solutions
Michigan Buscher Law LLC
Phytolive Organic Colorado
Greensboro, NC Greenbridge Corporate Counsel
Race Company Productions California
Minneapolis, MN Joyner Law Office
Raw Green, LLC Chicago, IL
Washington, DC Scot Candell & Associates
Refine Pharmaceuticals San Rafael, CA
Houston, TX The Cisneros Firm
Rm3 Labs Anaheim Hills, CA
Boulder, CO Wood, Smith, Henning, and Berman
Slocal Roots Farms LLC 16 states including California
Santa Maria, CA Wykowski Law
Solstice National, HQ: San Francisco, CA
Washington
Southside Pediatrics & Adult Care, LLC Trade Associations and Policy Organizations
Hagerstown, MD
Sparc Americans for Safe Access
California National, HQ: Washington, DC
Stearns Management LLC Association of Cannabis Professionals
Sterling Heights, MI San Diego, CA
Sunday Goods Latinas Cannapreneurs
Arizona, CA Puerto Rico
Tahoe Wellness Center Marijuana Policy Project
South Lake Tahoe, CA Washington, DC
Takoma Wellness Center, Inc. Medical Cannabis Education Association
Washington, DC Illinois
The Arcview Group Michigan Cannabis Industry Association
Oakland, CA Michigan
Tmcolors, Inc Minority Cannabis Business Association
Maryland National
True Science Laboratories, LLC National Cannabis Industry Association
Los Angeles, CA National