Let’s get to what matters! This bill is total bullshit. A huge surprise, it's about taxes, fees, and federal regulation and control.
https://int.nyt.com/data/documenttools/the-cannabis-administration-and-opportunity-act/6ae57fc5bae6ada6/full.pdf
Page 13- “Under present law, alcohol and tobacco products are subject to federal taxes as well as state excise taxes. While cannabis businesses are subject to federal income taxes and certain state excise taxes, cannabis products are not subject to any federal excise tax.
“Federal alcohol and tobacco taxes apply differently depending on the type of product. Some products are taxes based on volume, while other taxes are based on potency, and others are based on a percentage of price (for example, cigars are taxed at roughly 50 percent of their sales price.)"
Page 16 & 17- “The Federal Alcohol Administration Act requires any person producing alcoholic beverages or selling alcoholic beverages at wholesale obtain a permit from the Treasury Department. In addition, any person producing a taxable alcoholic beverage must register with the Treasury Department for tax purposes. Federal food facility registration may also be required by FDA.
“The Family Smoking Prevention and Tobacco Control act requires manufacturers of tobacco products to register with the FDA. Manufacturers of tobacco products must separately register with the Treasury Department for tax purposes.
“Generally, an alcohol or tobacco permit may be denied or revoked if the premises is inadequate to prevent tax evasion or diversion, operation of the premises do not comply with federal or state law, … or the applicant lacks sufficient business experience or financial standing. In addition, an alcohol permit application may be denied if the applicant has been convicted of a felony violation under federal or state law in the preceding five years, or a misdemeanor violation in the preceding three years related to alcohol. A tobacco permit application may be denied (or revoked) if the applicant has ever been convicted of a felony violation under federal or state law related to tobacco products.”
Page 17- “Strict rules apply to the operations of tobacco and alcohol production facilities, intended to prevent tax evasion and smuggling. These rules include requirements for facility security, rules regarding entry and inspection by government regulators, and requirements for record keeping and reports. In addition, manufacturers of alcohol and tobacco products may be required to maintain a surety bond, which serves to guarantee payment of excuse tax liabilities in the case that a manufacturer fails to pay.”
Proposal
Page 18- “The general rate of tax would be 10 percent for the year of enactment and the first full calendar year after enactment. The tax rate would increase annually to 15 percent, 20 percent, and 25 percent in the following years. Beginning in year five and thereafter, the tax would be levied on a per-ounce rate in the case of cannabis flower, or a per-milligram of THC rate in the case of cannabis extract. The applicable rate for year five and thereafter would be a per-ounce or per-milligram of THC amount determined by the Secretary of the Treasury equal to 25 percent of the prevailing price of cannabis sold in the United States in the prior year.”
Establishment and Permitting
Page 19- “Sec 511 of the Discussion Draft would require any person selling cannabis products at wholesale to obtain a permit from the Treasury Department. In addition, any person producing taxable cannabis products must obtain a Treasury Department permit and register for tax purposes. A producer of cannabis products would also be required to register with the FDA.”
So cliff notes, this bill is all about taxing the crap out of pot.
www.nbcnews.com
