In a public comment, the city asked federal officials to make a timely decision to boost struggling cannabis businesses and also protect local authority in regulating the industry.
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As the Biden administration looks to reclassify marijuana to a lower-tier drug, the city of Denver put in its two cents as the first major U.S. city to allow legal recreational use in support of the federal process.
On Wednesday, city officials sent a public comment to the Department of Justice urging officials to change its stance on cannabis and help Colorado's economy recover from an industry-wide recession.
Denver also asked federal officials to ensure the reclassification doesn't hurt local regulations.
“This is essential so marijuana businesses can continue to be a contributor to our economic prosperity,” said Molly Duplechian, the executive director of Denver’s Office of Marijuana Policy and Department of Excise and Licenses, in a statement.
Federal officials at the DOJ announced in April that the agency is recommending to move marijuana from the highest restricted drug category for substances with high risk of abuse (Schedule I) to the rank of drugs considered to have a moderate-to-low risk of dependence (Schedule III).
It could be one of the biggest shifts in federal marijuana policy in decades — allowing for tax deductions, banks to be involved and fewer prohibitions on researching the substance.
Currently, cannabis is in the same classification as LSD and heroin. Under rescheduling, it would be on the list of drugs including ketamine, testosterone and Tylenol with codeine.
The Drug Enforcement Administration, overseen by the DOJ, is taking public comments over a period of 60 days, ending July 22, ahead of its decision. The agency received more than 31,000 comments as of Wednesday.
As marijuana sales continue to slide in Colorado, federal tax deductions are currently not allowed under Schedule 1 classification could offer relief for struggling dispensaries and retailers.
Colorado saw a total $113 million in marijuana sales in May, according to state data, down more than $80 million from the same month in the state's peak year of 2021.
“This just comes at a really critical time for them,” Duplechian told The Denver Gazette in an interview. “This type of change could really benefit and hopefully keep some businesses that are on the brink of closing, keep them around and keep them able to survive here in Denver.”
But along with the support of the reclassification, the city also asked the DOJ to ensure federal changes wouldn't get in the way of local regulations.
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"If marijuana is reclassified to Schedule III, the authority of local jurisdictions should be supported by any federal regulations, which should allow states and localities to swiftly respond to local public health risks," the city's comment to federal officials said.
The city also expressed that it's "unclear" how classification could affect state and local laws on the industry and warned any changes that could hinder a businesses ability to operate in the city would hurt the city's tax revenue.
"We have built this successful framework here in Denver and we now generate a significant amount of tax revenue and licensing fees," Duplechian said. "And we would want to make sure that, under a reschedule, that is also maintained."
Denver-based MedPharm Research is one of the few research businesses with the DEA's Schedule I license to study how cannabis could be used to treat dementia and Alzheimer's disease.
But the company has struggled with getting funding and collaborating with universities because of the nation's strict rules around Schedule I substances, said Albert Gutierrez, president of MedPharm.
Rescheduling could make it much easier for institutions that have steered clear of marijuana research because of "red tape," he added.
"It's been very slow moving just because of the different barriers and hurdles that we have to go through," Gutierrez said. "This will fast track a lot of that."
As the state's cannabis industry is struggling, Gutierrez said they're looking to save costs wherever they can. Changes to tax rules could "change the ballgame," he said, and open up more investment dollars into research.
"We're on the cusp right now of what can be a game changer for our industry, to legitimize a lot of what this plant has done for people already that we've heard anecdotally," Gutierrez said.
But the efforts may be delayed as cannabis critics push for public hearings to be held after the presidential election. The Republican-led House Appropriations Committee also voted earlier this month to block funding toward the de-scheduling process, Forbes reported.
For Gutierrez, he said, in this industry "nothing is ever finished until it's finished."
"If it is blocked, it doesn't change anything for me today that I had yesterday," Gutierrez said. "But it sucks, because I do want things to move forward."
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