The Drug Enforcement Administration (DEA) is apparently on the verge of rescheduling cannabis, potentially within days or weeks.
The move would mark the most significant federal action toward marijuana legalization since its prohibition nearly a century ago.
Speculation swirling around the industry has resulted in a mix of optimism, jumping the gun and high-level crystal-ball gazing.
Here, however, is the view of one well-connected Adrian Snead, a partner in the Washington, D.C. office and member of the firm’s Government & Regulatory Affairs and Litigation Practice Groups. Snead also worked with SAFER Banking sponsor Sen. Jeff Merkley.
— The Psychedelic Bull (@psychedelicbull) February 6, 2024
So, What Happens If It Happens? At the moment, cannabis remains on Schedule I of the Controlled Substances Act alongside heroin and LSD, signifying no accepted medical value and high potential for abuse. Rescheduling would bump it down to Schedule III, placing it among anabolic steroids and Tylenol with codeine.
What Else? This shift could also translate to lower taxes for cannabis companies that are now burdened by IRS tax code 280E which forbids them from deducting ordinary business expenses. In 2022, cannabis businesses paid $1.8 billion in additional federal taxes, according to market research firm Whitney Economics. For retailers, their tax rates can exceed 70%, the report stated. A change in this area could lead to more competitive prices for consumers.
Baby Steps? Critics argue that rescheduling is an incremental move that leaves many of the biggest issues unaddressed.
Such As? For starters, cannabis would remain federally illegal, possibly perpetuating arrests and unresolved conflicts between state legalization and federal law.
“It’s a step in the right direction but, in terms of its practical direction, it’s really more symbolic,” said Morgan Fox, political director for the National Organization for the Reform of Marijuana Laws (NORML), the nation’s oldest cannabis legalization advocacy group. “Rescheduling isn’t going to resolve the conflict between state and federal law when it comes to cannabis.”
Many find it more reasonable to push for descheduling, that is removing cannabis from the Controlled Substances Act entirely, similar to how…