Federal cannabis legalization with tax-funded reinvestment in communities harmed by drug war

What it does

This bill removes marijuana from the federal controlled substances schedule, making it legal under federal law. It imposes a federal excise tax on cannabis products (starting at 5% and rising to 8% over five years), creates an Opportunity Trust Fund from tax revenues to fund criminal justice reinvestment and small business support for communities harmed by drug enforcement, expunges prior cannabis convictions, and requires demographic tracking of cannabis industry workers and owners. The bill preserves federal employee drug testing and transportation safety regulations.

Why we flagged it

The bill's core function is federal legalization of cannabis (removing it from Schedule I), paired with a federal excise tax and a reinvestment mechanism targeting communities harmed by prior enforcement. This is not a simple deregulation—it is a legalization-plus-taxation-plus-reinvestment framework designed to address racial and economic inequities in the cannabis market.

What the text implies

• Federal excise tax (5–8%) will increase cannabis prices for all consumers, potentially offsetting some of the public-health and equity benefits of legalization by maintaining barriers to access for lower-income users.
• Bonding, permitting, and licensing requirements (Subchapter C) create regulatory barriers that may favor large, well-capitalized firms over small entrepreneurs, potentially limiting the equity gains the bill aims to achieve despite explicit findings about minority underrepresentation.
• Preservation of federal employee drug testing and transportation safety regulations (Section 3(g)–(h)) means cannabis use remains a disqualifying factor for federal jobs and safety-sensitive positions, limiting employment opportunities even after legalization.
• The bill's retroactive application to prior convictions and pending cases (Section 3(d)) is a major benefit, but expungement is automatic only for cannabis-specific offenses; collateral consequences (housing, licensing, professional credentials) may persist under state and local law.
• Demographic data collection (Section 4) on cannabis industry workers and owners is transparent and equity-focused, but confidentiality protections for individual workers may limit public accountability for labor practices in the industry.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

Ordinary citizens gain significant benefits: legalization removes criminal penalties, expungement restores rights to those with prior convictions, and federal tax revenues fund reinvestment in harmed communities and minority-owned small businesses—addressing documented racial disparities in enforcement and market access. However, all cannabis consumers face a new federal excise tax (5–8%), which will increase prices and may disproportionately burden lower-income users. The trade-off is real: cri

Who stands to gain

• Licensed cannabis producers and importers (subject to excise tax but operating in newly legal market
• Cannabis retailers and distributors
• Small Business Administration (receives 20% of tax revenues for minority business support)
• Communities and nonprofits receiving criminal justice reinvestment funds (50% of tax revenues)
• Minority-owned cannabis businesses (explicit target of SBA support under Section 6(b))

Named in the bill

Attorney General, Secretary of Health and Human Services, Commissioner of Food and Drugs, Secretary of Transportation, Small Business Administration, Bureau of Labor Statistics, Internal Revenue Service, Controlled Substances Act (21 U.S.C. § 812), Federal Food, Drug, and Cosmetic Act, Omnibus Crime Control and Safe Streets Act of 1968, Schedule I (Controlled Substances), Opportunity Trust Fund

Where it stands

74 cosponsors: 74 Democrats.

• Aug 29, 2025 — Introduced · Congress.gov: “Introduced in House”
• Aug 29, 2025 — Referred to House Committee on Transportation and Infrastructure and House Committee on Oversight and Government Reform · Congress.gov: “Referred to the Committee on the Judiciary, and in addition to the Committees on Energy and Commerce…”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

4 lobbying clients named this bill on 8 disclosure filings across 2 quarters, Dec 2025 to Jun 2026. Those filings disclosed $86,610 in lobbying spend. A filing names 10 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 72% of bills with at least one filing.

Jerrold Nadler, the sponsor, reported $72,500 in PAC receipts in the 2026 cycle.

• National Association of Criminal Defense Lawyers (nacdl) — $30,000 on 2 filings
• Students for Sensible Drug Policy — $30,000 on 2 filings
• Drug Policy Alliance — $26,610 on 2 filings
• Americans for Nonsmokers' Rights — $0 on 2 filings

Lobbying Disclosure Act filings through Jul 21, 2026. A filing shows who paid to lobby on a bill it names, not what changed.