(Bloomberg) — Senate Democrats plan to introduce a bill to decriminalize marijuana at the federal level next week, a person familiar with the matter said, although the legislation faces long odds in the evenly divided chamber.
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Majority Leader Chuck Schumer is working with Sens. Cory Booker of New Jersey and Ron Wyden of Oregon on the measure. Senators circulated a draft of the bill last year and made adjustments after feedback from Senate committees.
The Cannabis Administration and Opportunities Act would remove marijuana from the list of drugs covered by the Controlled Substances Act. However, states can still maintain and create bans on the production and distribution of marijuana.
Pot shares jumped on the news. Canadian cannabis producer Tilray Brands Inc. jumped as much as 20% in its biggest jump in four months. Investors focused on other Canadian licensed growers expanding into the U.S. market, including Canopy Growth, which rose as much as 11%. US multi-state carriers also rose, with Green Thumb Industries climbing to its highest point in a month.
The sector has been hit this year as the glacial pace of legalization in the US has weighed on previously high share prices. The ETFMG Alternative Harvest ETF, also known by the ticker MJ, has plunged 48% this year as investors’ hopes faded.
The legislation faces an uphill battle in the House, where 60 votes are needed to pass most bills. Many Republicans and some Democrats, including Senators Jeanne Shaheen and Jon Tester, opposed decriminalizing marijuana.
The bill would create grant programs to help communities and individuals most affected by drug crimes and create funding programs to provide loans to small cannabis businesses owned by disadvantaged individuals.
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It also requires federal non-violent cannabis-related convictions and arrests to be expunged within one year of taking effect.
The House of Representatives voted in April to decriminalize marijuana, wipe out federal convictions on marijuana-related charges and impose taxes on cannabis growers and importers.
The legislation passed 220-204 with the support of most House Democrats and three Republicans. Two Democrats voted against the bill.
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