On April 17, U.S. Reps. Dave Joyce, R-Ohio, Max Miller, R-Ohio, and Dina Titus, D-Nev. jointly introduced the Tenth Amendment Through Entrusting States (STATES) Act 2.0. This legislation seeks to advance federal cannabis legalization by granting states, Washington D.C., U.S. territories, and Native American tribes the authority to establish their own cannabis regulatory policies.
The original STATES Act, first proposed in 2018, aimed to exempt individuals and businesses complying with state, tribal, or territorial cannabis laws from federal enforcement by amending the Controlled Substances Act (CSA). Rather than fully legalizing cannabis at the federal level, the legislation respects states’ autonomy to develop regulatory frameworks tailored to their jurisdictions. By ensuring that activities compliant with local cannabis laws are shielded from federal penalties, the bill seeks to resolve conflicts between federal prohibition and state-level legalization. This includes protections for medical and recreational cannabis programs, as well as safeguards for financial institutions serving the cannabis industry.
And the reintroduced STATES Act 2.0 includes several updates:
• Removes cannabis from CSA control while respecting states that choose to maintain prohibition;
• Provides federal tax relief to state-authorized cannabis businesses by allowing deductions for ordinary business expenses (eliminating the classification of their operations as “drug trafficking” under Section 280E of the Internal Revenue Code);
• Permits interstate cannabis commerce, including transportation through states and territories that uphold prohibition.
Joyce, co-chair of the Congressional Cannabis Caucus (CCC), previously championed an earlier version of the STATES Act during the last Congress. “Whether a state is pro-legalization or anti-legalization, we can all agree that the current federal approach to cannabis policy is not working,” Joyce said in a press release. “As President Trump has acknowledged, the existing policy has caused unnecessary harm and squandered taxpayer dollars by diverting law enforcement resources from combatting violent crimes to making needless arrests and facilitating incarcerations for small possessions of state-legal marijuana.”
Titus, co-chair of the CCC alongside Joyce, remarked: “The STATES 2.0 Act ensures the federal government does not interfere with states or tribes that have chosen to legalize cannabis. It’s time for national policy to catch up with the states or at least get out of the way.”
Rep. Miller emphasized that the bill would “establish commonsense guardrails that protect children, promote public safety, support scientific research, address addiction and mental health concerns, and uphold the rights of communities that choose to opt out of cannabis use.” “This legislation empowers each state to adopt policies that reflect the needs and values of their residents without fear of federal interference,” Miller added.
For all cannabis operators, escaping Section 280E’s punitive tax structure for “drug trafficking” and gaining parity with traditional U.S. businesses could mark a financial turnaround for an industry long burdened by losses. For hemp and cannabis businesses, the STATES Act 2.0 represents a critical step toward resolving persistent legal ambiguities. Its reintroduction underscores growing bipartisan consensus on respecting state autonomy in cannabis policy. While the bill stops short of full federal legalization, it offers a pragmatic solution to harmonizing federal and state laws, delivering urgently needed policy clarity and stability to the industry.
The News is Sourced from Cannabis Business Times
Post time: Apr-24-2025
