Definitions of cannabis and cannabis product — submitted to U.S. Senate Finance Committee, which accepts comment on a draft bill at Cannabis_Reform@finance.senate.gov. https://www.democrats.senate.gov/imo/media/doc/CAOA%20Detailed%20Summary%20-.pdf
Summary:
Something “derived” from the plant is a product taxable by THC content, while a “derivative” of the plant is not a cannabis product, but simply cannabis not taxable by THC content. That confuses me.
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Thank you for the opportunity to comment on the Cannabis Administration and Opportunity Act draft.
The definitions of cannabis and cannabis product, and the differences between them are critical in the bill’s tax provisions.
But those definitions confuse me.
Cannabis
The bill adds, to Section 201 of the Federal Food,
18 Drug, and Cosmetic Act (21 U.S.C. 321), a new definition of cannabis, starting with “all parts of the plant Cannabis sativa L., whether growing or not,” and going on to include “every compound, manufacture, salt, derivative, mixture, or preparation of such plant, it’s seeds or resin.” New (ss)(1)(A).
Cannabis product
The term ‘cannabis product’ means any product made or derived from cannabis that is intended for consumption or applied to the body of man or other animals, including any component of such product. New (ss)(2)(A).
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The definition of cannabis is an antique, still found in 21 USC § 802(16) – from back in the days when people wrote marihuana instead of marijuana. I suspect that in the days of the origin of that definition, there may have been a catch-all intent, designed to hit products that the bill defines separately in new (ss)(2)(A).
My reading, which I hope to explain in a later email on new Code section 5902, is that cannabis products are taxable by THC content, while cannabis in (ss)(1)(A) is not taxable by THC content. So the definition matters.
A new look at the definitions might be warranted.
The Center for New Revenue 