The STATES 2.0 Act Explained: Federal Cannabis Reform Guide

Understanding the Bill That Could Finally End Federal Cannabis Prohibition

While the cannabis industry has spent years waiting for federal rescheduling to move cannabis from Schedule I to Schedule III, a different piece of legislation has been quietly building bipartisan support in Congress. The STATES 2.0 Act, formally known as the Strengthening the Tenth Amendment Through Entrusting States Act, takes a fundamentally different approach to the federal cannabis question. Rather than simply reclassifying marijuana within the existing drug scheduling framework, it proposes to deschedule cannabis entirely and return regulatory authority to individual states and tribal nations.

The bill, reintroduced in the 119th Congress by Representatives Dave Joyce (R-OH), Max Miller (R-OH), and Dina Titus (D-NV), represents what may be the most pragmatic path to federal cannabis reform currently on the table. Here is everything you need to know about what the STATES 2.0 Act would do and why it matters.

What the STATES 2.0 Act Would Actually Do

At its core, the STATES 2.0 Act is built on a straightforward principle: states that have chosen to legalize cannabis in some form should not have their programs undermined by federal law, and states that have chosen to maintain prohibition should be equally respected. The bill would accomplish this through several key mechanisms.

First, the legislation would prohibit federal enforcement actions against individuals and businesses operating in compliance with their state or tribal marijuana laws. This addresses one of the most persistent anxieties in the legal cannabis industry, the fear that a change in federal administration could trigger a crackdown on state-legal operations.

Second, the bill would authorize interstate commerce between legal jurisdictions. Currently, cannabis cannot legally cross state lines even between two states where it is fully legal. This restriction fragments the market, prevents economies of scale, and keeps prices artificially high in states with limited production capacity. Opening interstate commerce would create a more efficient and competitive national marketplace.

Third, the STATES 2.0 Act would remove marijuana businesses from the reach of Section 280E of the Internal Revenue Code. This tax provision, originally designed to prevent drug traffickers from writing off business expenses, currently forces legal cannabis companies to pay effective tax rates that can exceed 70 percent. Removing 280E applicability would dramatically improve the financial viability of cannabis businesses and could lower consumer prices.

Fourth, the bill outlines a federal regulatory structure with relatively low tax rates, creating a framework for national oversight without the punitive tax burden that has crippled businesses in states like California and Illinois.

How It Differs from Rescheduling

The distinction between the STATES 2.0 Act and the ongoing rescheduling effort is important. Rescheduling cannabis from Schedule I to Schedule III would provide meaningful tax relief through 280E removal and could facilitate research, but it would keep cannabis firmly within the Controlled Substances Act framework. Medical cannabis would become more accessible, but recreational programs would remain technically illegal under federal law.

The STATES 2.0 Act goes further by descheduling cannabis entirely, removing it from the Controlled Substances Act altogether. This approach acknowledges the reality that 24 states have now legalized adult-use cannabis and that the patchwork of conflicting state and federal laws serves no one well.

Importantly, the STATES 2.0 Act does not legalize cannabis nationwide. States that choose to maintain prohibition would be free to do so. The bill's name reflects its philosophical grounding in the Tenth Amendment, which reserves powers not delegated to the federal government to the states and the people.

The Bipartisan Coalition

One of the most notable aspects of the STATES 2.0 Act is its genuine bipartisan support. The bill's lead sponsors span the political spectrum, with Republican representatives Joyce and Miller joined by Democrat Titus. This is not a partisan exercise in messaging. It is a serious legislative effort backed by polling data showing that 61 percent of all voters support the bill outright.

The legislation has also attracted endorsements from unlikely quarters. The Peace Officers Research Association of California and the Oregon Coalition of Police and Sheriffs, representing thousands of law enforcement officers, have backed the bill. Their reasoning is practical: officers want to focus on road safety, combating cartel activity, and shutting down illegal markets rather than policing state-legal cannabis operations.

What It Would Mean for Cannabis Businesses

For cannabis operators, the STATES 2.0 Act would represent the most significant regulatory change in the industry's history. The removal of 280E alone would transform profitability overnight for businesses that have been operating under crushing tax burdens.

Interstate commerce authorization would enable supply chain optimization, allowing companies in states with abundant cultivation capacity to supply markets in states where production cannot keep pace with demand. This would benefit consumers through lower prices and wider product selection while creating opportunities for businesses to specialize and scale.

Access to banking and financial services, which has been severely limited by federal prohibition, would also improve dramatically under descheduling. Cannabis businesses have long been forced to operate primarily in cash, creating safety hazards and operational inefficiencies that other industries do not face.

What It Would Mean for Consumers

Consumers would see several immediate benefits if the STATES 2.0 Act became law. Lower effective tax rates for businesses would likely translate to lower retail prices. Interstate commerce could bring new products and brands to markets currently limited to in-state offerings. And the normalization that comes with federal descheduling could accelerate the destigmatization of cannabis use that has been underway for years.

For medical cannabis patients specifically, descheduling would remove federal barriers to research, potentially accelerating the development of pharmaceutical-grade cannabis medicines with standardized dosing and quality controls.

The Political Reality

Despite its bipartisan support and logical policy framework, the STATES 2.0 Act faces significant legislative hurdles. Cannabis reform bills have struggled to gain traction in Congress despite broad public support, and the current political environment is complicated by competing priorities and entrenched opposition from certain factions.

The bill was referred to the House Committee on Energy and Commerce in April 2026, but no hearing has been scheduled. This mirrors the experience of previous cannabis reform bills that have been introduced with fanfare but stalled in committee.

However, the broader political landscape for cannabis reform is more favorable than it has ever been. President Trump has signaled support for medical cannabis protections and rescheduling, and the bipartisan composition of the STATES 2.0 Act's sponsors suggests that cannabis may be one of the few issues capable of bridging the partisan divide in Congress.

Where Things Stand Today

The STATES 2.0 Act is one of 16 cannabis bills filed in the current congressional session, reflecting the breadth of approaches legislators are considering. Whether it advances as a standalone bill, is incorporated into broader legislation, or serves as a framework for future reform efforts, it represents the clearest articulation yet of how federal cannabis policy could work in a country where the majority of states have already moved beyond prohibition.

For cannabis consumers, patients, and industry participants, the STATES 2.0 Act deserves attention not just as a policy proposal but as a template for what responsible federal cannabis reform could look like. It balances individual liberty with state sovereignty, addresses the industry's most pressing regulatory challenges, and does so through a framework that has genuine bipartisan appeal.