How the Cannabis Administration and Opportunity Act Would Work

A potential route to the end of U.S. federal prohibition on cannabis products was introduced in July 2022 in the form of the Cannabis Administration and Opportunity Act (CAOA), authored by Senate Majority Leader Chuck Schumer (D-N.Y.), Sen. Cory Booker (D-N.J.), and Sen. Ron Wyden (D-Ore.). The CAOA is the first-ever bill by major party senators to propose decriminalization of cannabis; the bill also would expunge federal cannabis-related criminal records while also provide funding to law enforcement to shut down illicit cannabis growers and sellers.

However, the CAOA is a hail-Mary bill that few believe will pass.

“We take CAOA very seriously because it’s the first piece of truly comprehensive legislation to legalize, tax, and regulate cannabis at the federal level and has the support of the Senate Majority Leader,” says Aaron Smith, co-founder and CEO of the National Cannabis Industry Association. “That said, we’re still a way off from seeing this bill or any other comprehensive reform proposal pass the Senate, given the filibuster’s 60-vote threshold.”

Jennifer Briggs Fisher is a partner at law firm Goodwin Procter, and co-chair of the firm’s cannabis practice. She’s equally skeptical that the legislation will make it through the Senate. “I don’t think we’re going to see much movement,” she says. “Many in the industry, myself included, were very hopeful following the 2020 election that we would be able to achieve comprehensive cannabis reform at the federal level in President Biden’s first term. It has become abundantly clear that that’s not going to happen, and [it] may have even less of a shot following the election in November, 2022.”

Fisher notes the inconsistency at work in the politics of federal legalization: At this point, 37 states have voted to legalize either medical cannabis or medical and adult use products, and there are ballot initiatives that will likely expand this number in November 2022. “If we use the last couple of election cycles as examples,” she says, “the initiatives will pass, with sometimes overwhelming public support—even in surprising states. We will likely see that trend continue. It’s matched by public opinion and the evolution of how people think about legalization in the United States.”

Yet broad popular support for legalization hasn’t translated into legislative support for the project. In theory, Fisher says, senators from every one of the 37 states where there is some legalization should be supporting the industry, which she says drives revenue, employment opportunities, and access to medicine for constituents. In practice, that hasn’t happened.

Meanwhile, Fisher notes, there remains a strong anti-legalization posture among some politicians, perhaps due to continued stigma against an industry the federal government considers criminal. In many cases, these politicians’ opinions are contrary to their constituents’ feelings about legalization.

Those clinging to prohibition will hold their positions, Fisher says, “Until they start to feel that kind of pressure, either from their constituents, so voters, or industries, [meaning] the job creators in their states who happen to be cannabis companies or the other ancillary companies that benefit from providing products and services to the legal cannabis market. There are a lot of people who have a stake in seeing federal legalization happen, but you haven’t seen them mobilize in the way that’s probably necessary to really move the needle on broad scale legalization and reform.”

Challenges Ahead

The stakes of federal legalization are high, says Smith. “I’m under no illusion that moving from federal prohibition to a system of federal regulation will be easy for the industry, at first; however, federal legalization would bring banking access, fair taxation, and interstate commerce—three issues the industry desperately needs to see resolved in order to thrive.”