Proposed U.S. Legislation Raises Urgent Questions on Federal Cannabis Regulation

Taxes, compliance, FDA oversight underscore complexities introduced by federal governance framework

Washington, District of Columbia, UNITED STATES


Washington, Aug. 25, 2021 (GLOBE NEWSWIRE) -- New Frontier Data (https://newfrontierdata.com), the premier data, analytics and technology firm specializing in the cannabis industry worldwide, releases its latest report, Up in Smoke? Analysis of the Cannabis Administration & Opportunity Act, providing an unbiased review of the draft federal cannabis reform legislation presented in the United States Senate on July 14, 2021. The study reviews the proposed legislation’s industry impact across a range of issues including the de-scheduling of cannabis, federal tax structure, designation of regulatory agencies and governance policies, and expungement of cannabis convictions.  

The analysis concludes that the anticipated stimulative effects of legalization under the proposed legislation would advance the legal cannabis industry, enabling businesses to operate and thrive in legal, regulated environments, while also benefitting local economies. Conversely, the report also highlights the likely effect of taxes across the supply chain, presumably to be passed on to consumers, and ultimately expected to result in a comparatively less competitive market than the illicit one.  

“Once the costs of regulatory compliance and operational expenses are factored in, the environment for cannabis businesses under the proposed legislation would be encumbered, especially for small or under- capitalized businesses,” noted Giadha A. DeCarcer, Founder and Executive Chair of New Frontier Data. “While federal legalization continues to be very popular and needed, provisions in this draft bill call attention to the extent of regulatory complexity that comes with federal governance.”

Key Report Findings:

  • Political Dynamics: The legislation will most-likely face opposition from both progressive Democrats and Republicans, jeopardizing passage without significant changes.
  • Federal Taxation: The proposed federal tax schedule, while eliminating the high tax burden of U.S. Code 280E, will impose burdensome compliance requirements for cannabis businesses while significantly increasing retail costs for consumers via the 25% federal tax rate.
  • FDA Oversight: The potential issues raised by FDA oversight of cannabis products were largely unaddressed despite the significant impact on the industry.
  • Social Equity Incentives: The legislation proposes record expungement of 500,000+ cannabis-related arrests annually, and funds business incentives for those most impacted by cannabis prohibition, yet state participation is not mandated.  

Download a complimentary copy of Up in Smoke? Analysis of the Cannabis Administration & Opportunity Act here: https://newfrontierdata.com/upinsmoke

About New Frontier Data:

New Frontier Data is the premier data, analytics and technology firm specializing in the global cannabis industry, delivering solutions that enable investors, operators, advertisers, brands, researchers, and policy makers to assess, understand, engage, and transact with the cannabis industry and its consumers.

Our mission is to inform policy and commercial activity for the global legal cannabis industry. We maintain a neutral position on the merits of cannabis legalization through comprehensive and transparent data analysis and projections that shape industry trends, dynamics, demand, and opportunity drivers. Founded in 2014, New Frontier Data is headquartered in Washington, D.C. with a presence in Europe, Latin America and Africa. For more information about New Frontier Data, please visit us at www.NewFrontierData.com.

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