Colorado Gov. Jared Polis helps feds push the process forward
Could cannabis be rescheduled from a Schedule I to a Schedule III substance by Sept. 20? According to some experts, those opposed to rescheduling may push for public hearings that could delay the final rules past Election Day. Some claim that's precisely the point, to not give President Joe Biden a significant boost in his appeal to younger voters.
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On July 20, the 60-day public comment period on cannabis rescheduling, tied to the Drug Enforcement Administration's rulemaking, ends. Thirty days after that, the DEA is expected to publish its final rules, which are expected to go into effect on Sept. 20.
It's been 20 months since Biden directed the Attorney General and the Secretary of Health and Human Services to launch a scientific review of how marijuana is scheduled under federal law.
On April 30, the DEA agreed to reschedule cannabis. That was followed by a review by the White House Office of Management and Budget. Usually, that's a 90-day process, but the department fast-tracked it, completing their review in just 21 days. That, in turn, launched the 60-day public comment period on rulemaking by the DEA that began in mid-May and will end on July 20. More than 25,000 comments have already been received, with more than 800 comments from Colorado residents or people who have mentioned how Colorado became a leader in cannabis regulation.
Smart Approaches to Marijuana, or SAM, whose executive vice president, Luke Niforatos, of Douglas County, is part of a coalition requesting the DEA hold public hearings on rescheduling, which has a Thursday deadline for that request. The initial request was among the 25,000 comments posted on the DEA website and came on June 7 from Torridon Law PLLC, founded by former Attorney General Bill Barr.
SAM asked for a 30-day extension of the public comment period, noting that "the Proposed Rule is the most significant relaxation of restrictions on a psychoactive substance in the history of the [Controlled Substances Act]" and that "a rule affecting such a sweeping change warrants more than a 60-day comment period for affected stakeholders to gather necessary data to address the Proposed Rule."
Schedule III status doesn't fully legalize cannabis. According to the Associated Press, Schedule III drugs "are still controlled substances and subject to rules and regulations, and people who traffic in them without permission could still face federal criminal prosecution."
The Associated Press also noted marijuana would remain regulated by the DEA under Schedule III status. "That means the roughly 15,000 cannabis dispensaries in the U.S. would have to register with the DEA like regular pharmacies and fulfill strict reporting requirements,"
their report said in April. As of last year, 38 states have legalized medical marijuana, and 24 have legalized recreational marijuana.
Colorado, as it turns out, has been playing a behind-the-scenes role in helping the federal government with its research into rescheduling. In 2022, several state agencies in Colorado fed scientific research and data to the U.S. Department of Health and Human Services.
The Marijuana Enforcement Division, part of the Colorado Department of Revenue, supplied data on marijuana licenses, including demographic information on who held them.
MED also supplied its dashboard, which is a series of financial and other data created in conjunction with the CU Business Research Division. That information included sales, prices, licenses, maps of dispensaries and patients, testing, and social equity statistics.
The Colorado Department of Public Health and Environment provided a literature review on research and statistics from the state's Healthy Kids survey.
The Colorado Department of Public Safety submitted a 2021 report on the impacts of marijuana, which states that the "total number of marijuana arrests decreased by 68% between 2012 and 2019, from 13,225 to 4,290. This was driven by large decreases in possession and sales charges, with a minimal 3% increase in arrests for marijuana production."
Finally, the Colorado Department of Education supplied materials on its Jack Splitt Memorial Resource Bank, created by legislation in 2017. This bank provides schools with "evidence-based, research-based and promising materials and curricula pertaining to marijuana use prevention."
Last week, the Coalition for Cannabis Scheduling Reform hosted a webinar for reporters featuring Gov. Jared Polis and Gov. Wes Moore of Maryland to discuss rescheduling. "We are putting to an end of the failed era of prohibition," Polis said.
Polis praised the Biden administration for its continued efforts on rescheduling.
"This action from the president is pro-freedom, forward-thinking, reduces taxes, helps our economy and improves public safety," Polis added. It also supports the 38 states that have legalized medical marijuana for medical use, as well as ending "burdensome" taxes on marijuana businesses.
The tax problem is known as IRS regulation 280E. The Internal Revenue Service notes that 280E makes it clear that all the deductions and credits aren’t allowed for an illegal business, and that includes marijuana since it's a Schedule I drug. Marijuana business owners can deduct the cost of goods sold, basically the cost of their inventory. What isn’t deductible, the IRS says, are the average overhead expenses, such as advertising expenses, wages and salaries, and travel expenses, among others.
Polis said the issue of rescheduling is also a justice issue, noting that he has issued thousands of pardons to Coloradoans who had convictions for just for having a joint or possession of a small amount of marijuana for personal use, all of which is now legal in Colorado.
"Many Coloradans face decades of this affecting their jobs, whether they could buy a gun, whether they could get student loans," Polis said. Moore, in Maryland, has done the same, pardoning 175,000 just a week ago.
Moore noted the Biden administration's work on rescheduling has been data-driven. There's no reason for cannabis to be on the same schedule as heroin, Moore said. Maryland legalized recreational use in 2022.
But the hurdles to rescheduling have started to pop up.
Comments submitted to the DEA from Colorado are not all pro-cannabis.
Dr. Libby Stuyt, a board-certified psychiatrist affiliated with National Marijuana Initiative, which appears to be anti-cannabis, wrote, "With the increasing potency of THC in cannabis plants and the products produced from extracts, I have seen increasing problems with cognition, psychosis, worsening mental health/anxiety/depression, suicide, violence, and cannabis hyperemesis syndrome in my patients." She disputed the medical benefits of cannabis, stating she found no validated scientific study that supports the use of high THC for any medical condition. Some studies showed that more than 10% THC can increase the rate of addiction and psychosis. "Please use common sense and do not allow the cannabis industry to continue to market and heavily advertise these high THC products, such as wax, shatter, vape oil, edibles, suppositories, etc., as medicine."
Jan Beyer of Rutledge, Tenn., said she once worked for the Marijuana Enforcement Division in Colorado and said, "Making marijuana a Schedule III drug not only violates our international treaty obligations, it runs against research. The science is clear: marijuana is addictive, and it is not medicine. If marijuana becomes Schedule III, the Big Marijuana industry will receive a tax break that will allow them to mass commercialize high-potency THC. Further, our federal government would be asserting that marijuana is less addictive today than it ever has been."
On the other side, patients noted cannabis had helped them with opioid addiction, glaucoma, and other medical conditions and that Colorado had seen significant tax revenue benefits from cannabis.
Alan Silber of the law firm Pashman Stein Walder Hayden submitted 2017 testimony from Dr. Larry Wolk, then the executive director of CDPHE. Wolk said the state of Colorado did not experience any significant issues as a result of legalization. "We have actually seen an overall decrease in DUIs since legalization. So, the short answer is: There has been no increase since the legalization of marijuana here."
"When compared relative to the potential harm that substances including [alcohol and prescription drugs] can cause the human body, it is clear that cannabis poses a lesser risk of harm or abuse," Silber and his colleagues wrote.
But other hurdles remain. Anti-marijuana advocates, including SAM, are seeking a DEA hearing on rescheduling, one that critics charge could push rescheduling past the 2024 election.
The other hurdle continues to be banking regulations.
For years, lawmakers on both sides of the aisle in Congress have tried to pass the Secure and Fair Enforcement Regulation Banking Act, aka SAFER, which would allow marijuana businesses to access lines of credit, credit cards, and, most importantly, capital. While the measure has passed the U.S. Senate numerous times, its trip through the House hasn't always been as successful.
Last week, the House Appropriations Committee stripped language similar to SAFER from a major spending bill for the Financial Services and General Government and Legislative Branch for fiscal year 2025, much to the dismay of lawmakers on both sides of the aisle.
It could come back, in spending tied to the National Defense Authorization Act. The Senate version of SAFER has been stalled in a committee since last September
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