Next in the process is a 60-day public comment period, but it's unclear how much longer the rescheduling process will take.
May 16, 2024
President Joe Biden on Thursday confirmed that the Drug Enforcement Administration will be pursuing a proposed rule to reschedule marijuana, calling the move “monumental” in a video posted to social media.
“Today, my administration took a major step to reclassify marijuana from a Schedule I drug to a Schedule III drug. It’s an important move toward reversing longstanding inequities,” Biden said. “No one should be in jail merely for using or possessing marijuana, period. Far too many lives have been upended because of failed approach to marijuana, and I’m committed to righting those wrongs.”
Shortly after Biden’s video went live, the U.S. Department of Justice confirmed in an emailed statement that it had sent a proposed rule to the federal register, “initiating a formal rulemaking process to consider moving marijuana from a schedule I to schedule III drug under the Controlled Substances Act,” based on the recommendations issued last summer by the Department of Health and Human Services.
“In light of HHS’ medical and scientific determinations, and OLC’s legal advice, the Attorney General exercised his authority under the law to initiate the rulemaking process to transfer marijuana to schedule III,” the DOJ said in a release.
The DOJ noted carefully, however, that the rescheduling process is far from complete, and that “During that process, and until a final rule is published, marijuana remains a schedule I controlled substance.”
The DOJ also shared documents regarding the rescheduling process and the DOJ’s Office of Legal Counsel’s memorandum on rescheduling.
Once the proposed rule is made public in the federal register, the DEA will hold a 60-day public comment period, before then reviewing input and then publishing a proposed final rule, all of which could take months to years, according to legal experts.
But some industry insiders have expressed hope that the Biden administration may have teed up the rescheduling process to conclude much quicker, ideally prior to the November election, to prevent a possible new Trump White House from halting rescheduling altogether, in case Biden loses the race.
Regardless, several cannabis industry trade groups – including the U.S. Cannabis Council, the National Cannabis Roundtable, and the Coalition for Cannabis Scheduling Reform – immediately hailed the move by the Biden administration on Thursday, and said it’s a step in the right direction.
Bryan Barash, vice president of cannabis tech platform Dutchie and spokesman for the Coalition for Cannabis Scheduling Reform, said he was “thrilled” at the news.
“This is a huge victory for everyone who has worked to normalize federal cannabis policy and begins the process of federal support for state cannabis markets. Most importantly, for the first time the federal government recognizes the overwhelming evidence of the clear medical benefits of cannabis,” Barash said.
Edward Conklin, executive director of USCC, said in an emailed statement that the trade group “strongly supports” the DEA’s move.
“Moving cannabis down to Schedule III would signal a tectonic shift away from the failed policies of the last 50 years,” Conklin said. “Thanks to President Biden and his administration, the federal government will soon turn the page on prohibition and set the stage for further reforms.”
Saphira Galoob, executive director of the NCR, added that the shift is “a step towards larger federal cannabis reforms.”
“Our work does not end here,” Galoob said, echoing a comment industry sentiment. “While we continue to commend President Biden, the DOJ, and HHS for following the science and not ignoring the need for federal cannabis policies to shift after decades of state leadership, Congress must also take action to further this progress.”
Former Deputy U.S. Attorney General James Cole also asserted in the NCR statement that Congress still has to act in order to set the stage for a legal national marijuana marketplace, as opposed to the patchwork of state-by-state regulatory systems currently in place.
“By recognizing, as the federal government has done, that cannabis does have valuable medical applications and with the overwhelming legalization in the states, Congress must face the simple reality that cannabis is and will be present in our society and do its duty by providing for the safest and most effective regulatory environment to exist,” Cole said.
Thursday’s news is part of an ongoing saga that Biden kickstarted in 2022 with an order for his administration to “expeditiously” review marijuana’s status as a Schedule I narcotic.
If the process is ultimately completed, the biggest benefit to the U.S. cannabis industry will come in the form of tax savings, since the onerous 280E provision of the federal tax code – which bars standard business tax deductions for any company that deals in Schedule I or II substances – won’t apply any longer. That shift alone is expected to save the industry hundreds of millions of dollars per year, if not billions.
But moving marijuana to Schedule III would also leave the entire U.S. marijuana industry still federally illegal, since none of the state-level companies dealing in cannabis are legally permitted by the DEA to traffic in Schedule III drugs. That legal disconnect will still require an act of Congress to solve.
In the interim, many are expecting new updated guidance from the DOJ, such as the defunct Cole Memos that formerly had set the standard for how states could launch cannabis markets without fear of interference from federal agents. Such guidance has yet to be issued or updated since former U.S. Attorney General Jeff Sessions rescinded all cannabis-related DOJ guidance memos in 2018.
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