STATES Act

What Is the STATES Act?

The Strengthening the Tenth Amendment Through Entrusting States (STATES) Act was a bill introduced in June 2018 by Senators Elizabeth Warren (D-MA) and Cory Gardner (R-CO) to ensure that every individual state is free to make its own determination about the best legal approach to marijuana within its borders. 

Specifically, the STATES Act amended the Controlled Substances Act (CSA) of 1970 in order to protect individuals and businesses acting in compliance with state regulations regarding cannabis from federal enforcement. The original bill garnered some support but was not enacted after being defeated on a voice vote.

Understanding the STATES Act

The debate about whether cannabis should be legalized has been an active one, dating back decades. Its legal status has also been the source of much confusion, particularly in recent years.

Marijuana is a Schedule I drug under the federal CSA. It is classified as having "a high potential for abuse" and being just as dangerous as heroin, LSD, or cocaine. In other words, it is strictly illegal to produce, distribute, or use the substance. Local laws, meanwhile, are generally much more lenient. A total of 36 states and the District of Columbia legalized the substance to some degree—medically and/or for recreational purposes—as of 2021.

The different paths adopted by individual states and federal law have understandably become a contentious issue. Companies that sell or provide marijuana-related products can be permitted to do so in the state in which they operate yet still find themselves at risk of federal prosecution. The STATES Act was designed to address this puzzling conundrum, amending the CSA so that state-compliant cannabis businesses are no longer in violation of federal law.

Origins of the STATES Act

The Justice Department issued guidance during the Obama administration to encourage prosecutors to take a light approach toward federal marijuana law enforcement in states where cannabis is legal. This guidance attempted to bridge the legal gap between states that had moved to legalize the substance via legislation or citizen initiative and the continued non-legal status of various marijuana-related substances on a federal level. 

The attempt at a compromise was upended in January 2018 by Jeff Sessions. The then-attorney general's move to rescind earlier guidelines placed businesses and individuals operating in the cannabis industry within states' legal frameworks at risk of federal prosecution. Sessions' controversial move paved the way for the STATES Act to be introduced.

The STATES Act Method

The STATES Act did not move to legalize cannabis on a federal level. Rather, it recognized that dozens of individual states have passed separate legislation to decriminalize and/or legalize the substance to varying degrees. 

The bill, designed as a bipartisan effort, amended the CSA so that the provisions of the Act do not apply to persons acting in compliance with either state or tribal laws related to the manufacturing, production, possession, administration, or delivery of marijuana.

The Act maintained several aspects of the CSA, including a prohibition on the employment of persons under age 18 in cannabis operations and the sale of marijuana to those under age 21 except for medical purposes. The bill also went beyond recognizing just those states which have moved to legalize cannabis. It also extended protections to Washington D.C., U.S. territories, and federally-recognized tribes that have done or may do the same in the future.

Special Considerations

To become law, a bill must pass by both the House and Senate and then be signed by the president. The STATES Act has so far failed to overcome those hurdles. After Sen. Warren introduced the bill in the U.S. Senate, it was referred to the Senate Judiciary Committee for further consideration.

Sen. Gardner later made an effort to attach the bill as an amendment to the FIRST STEP Act, a criminal justice reform bill, during debates in December of 2018, while the 115th Congress was in lame-duck sessions. However, Senate Majority Leader Mitch McConnell blocked this effort through a procedural maneuver.

Other Proposals

A failure to enact the original STATES Act bill does not necessarily mean that the current conflicting legal ruling on marijuana is here to stay, however. In November 2019, the House Judiciary Committee voted in favor of passing the Marijuana Opportunity Reinvestment and Expungement Act (MORE) to decriminalize marijuana at the federal level.

This Act demonstrated that a handful of government officials continue to fight to protect state laws and assert greater legal clarity on marijuana use. It still has some way to go before becoming enshrined into law, though, and it could easily meet a similar fate to the less aggressive STATES Act.

But officials are making progress with other, related legislation that would strike down the ability of banks to hold assets for marijuana-related businesses. For instance, the SAFE Banking Act was passed in the House in September 2019. This particular bill shares some characteristics with the STATES Act by seeking to permanently protect financial institutions (FIs) that want to offer basic banking services to marijuana businesses in states where the substance is legal.