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DEA Recommends Rescheduling Cannabis to Schedule III Drug

The U.S. Drug Enforcement Administration (DEA) announced it supports rescheduling cannabis from Schedule I to a Schedule III drug.

However, according to the Associated Press, it would not formally federally legalize adult-use cannabis. So, possession would still be a crime in some states.

The Biden Administration urged the DEA to finish its process. They are in favor of progress on federal cannabis legalization.

“This is long overdue and represents giant progress in the industry. The equation of cannabis with hardcore drugs that have devasted lives and communities was always pure nonsense,” NJ CannaBusiness Association President Scott Rudder said. “This is great news for patients and for businesses that have struggled.”

“Moving marijuana out of its absurd classification as a Schedule I drug is long overdue. We applaud the administration for finally acknowledging the therapeutic value that has been widely accepted by the medical community and millions of medical cannabis patients for decades,” said National Cannabis Industry Association (NCIA) CEO Aaron Smith.

“It is significant for these federal agencies, and the DEA and FDA (Food and Drug Administration) in particular, to acknowledge publicly for the first time what many patients and advocates have known for decades: that cannabis is a safe and effective therapeutic agent,” National Organization for the Reform of Marijuana Laws (NORML) Deputy Director Paul Armentano said.

According to both the NCIA and NORML, rescheduling would not resolve the conflict between federal marijuana prohibition and the state legal cannabis markets.

“The DEA’s proposal to reschedule marijuana would continue criminalization. As a result is inconsistent with the Biden Administration’s promises. Especially to Black and Brown people, regarding marijuana decriminalization and expungement,” said Chelsea Higgs Wise. She is executive director of Marijuana Justice, which is part of the United for Decriminalization coalition.

Long Process

The DEA’s rescheduling decision does not take immediate effect.

It still needs to be reviewed by the White House Office of Management and Budget before the DEA initiates a public comment period.

“Interested parties” can request administrative hearings to debate the issue further. The DEA will issue its final determination only following public comments and a possible judicial review.

Changes in marijuana’s federal status would take effect 30 days following publication of the DEA’s final rule in the Federal Register.

So, the process is by no means over.

Federal Rescheduling Cannabis Questions

It’s not clear what rescheduling cannabis means for the New Jersey cannabis markets or the other state-legal cannabis markets.

“Leaving cannabis on the schedule at all still leaves room for bad faith actors to manipulate and utilize the cannabis market to their benefit. We should continue to push for full descheduling of cannabis while remaining vigilant in preventing anyone from taking unfair advantage of the new rules,” Rudder argued.

“While this is undoubtedly a very positive first step, rescheduling will not end federal marijuana prohibition. And it doesn’t harmonize federal law with the laws allowing some form of legal cannabis in the vast majority of the states,” Smith argued.” We need clear enforcement guidelines issued to the DEA and FDA that would ensure the tens of thousands of state-licensed businesses responsibly serving cannabis to adults are not subject to sanctions.”

But Schedule III would allow state-legal cannabis businesses to take tax deductions for expenses currently prohibited under the federal tax code 280-E.

Cannabis industry experts widely agree that rescheduling as a significant positive step. But broader federal reforms are needed to resolve the many issues plaguing the industry due to federal prohibition. 

“It’s imperative that Congress build upon this development by passing comprehensive legislation to remove cannabis from the Controlled Substances Act and forge a new regulatory framework for whole plant cannabis products,” he added.

“Existing state legalization laws, both adult use and medical, will continue to be in conflict with federal regulations, thereby perpetuating the existing divide between state and federal marijuana policies,” Armentano argued.

Drug Schedules

Schedule I drugs include heroin and LSD. Schedule III includes Tylenol with the opiate codeine, ketamine, and some steroids. They are criminally prohibited by federal law because they possess a “high potential for abuse“ and have “no currently accepted medical use in the United States.” Cannabis has remained classified as a Schedule I controlled substance since 1970.

Historically, Schedule III substances have received explicit market approval by the FDA. They are only legal to possess when obtained in licensed pharmacies under a physician’s prescription.

So, Schedule III could wipe out the state market regulations in a worst-case scenario.

This is the fifth time that a cannabis rescheduling petition has been decided by the DEA. The agency rejected a similar petition in 2016 according to NORML.

Rescheduling Versus Descheduling

Marijuana has been listed as a Schedule I substance in the federal Controlled Substances Act since 1970. It’s a designation reserved for drugs with a high potential for abuse and no medical value. A move to Schedule III acknowledges the medicinal value of cannabis. That value has been known to the medical community and millions of patients for decades.

“NORML has long argued that the cannabis plant should be removed from the Controlled Substances Act altogether,” Armentano explained.

“Just as it is intellectually dishonest and impractical to categorize cannabis in the same placement as heroin, it is equally disingenuous and unfeasible to treat cannabis in the same manner as anabolic steroids and ketamine,” he declared.

Most notable social justice minded cannabis advocates would prefer cannabis descheduling. They want it taken off the schedule so the state cannabis markets would be allowed to function properly.

A lot of state cannabis markets are past the “Green Rush” phase and have been struggling due to federal prohibition.

In states like Oregon and Washington State, growers produced a lot of cannabis. They would love to ship it to New Jersey adult-use cannabis dispensaries to sell legally. So much weed was grown the price has become very low there. But they remain absurdly high here in the Garden State, But federal prohibition prohibits them from doing so legally. So, those states would love for interstate commerce to be allowed.

Also, banks and institutions dealng with the federal government are afraid of helping cannabis companies for fear of being accused of assisting Organized Crime.

Otherwise, it remains unclear what will happen. Interstate commerce could hurt some businesses while greatly helping others.

Long Time Coming

President Joe Biden initiated a federal review of prohibition in October 2022. It was the first time a President ever made such a request.

Just over half of Americans live in a state that has made cannabis legal for adults over 21. Three out of four Americans live in a state that has legalized cannabis for medical use. A November 2023 Gallup survey found that 70% of Americans support making cannabis legal for adults, and a recent Pew Research Center poll found that less than 10% of Americans still support marijuana prohibition. 

Congress has been so divided on so many issues on partisan lines. So it is hard to make progress on cannabis. That’s true even when it has support from libertarian Republicans and more progressive Democrats.

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