The cannabis industry was abuzz on Wednesday with news that a review of how the federal government classifies cannabis, which President Joe Biden ordered in October, had reached a key milestone.
The Department of Health and Human Services sent a letter to the DEA this week recommending that cannabis be moved to Schedule III, Bloomberg first reported on Wednesday.
Subsequently, a Drug Enforcement Administration spokesperson told Cannabis Wire by email that, “We can confirm DEA received a letter from the Department of Health and Human Services providing its findings and recommendation on marijuana scheduling, pursuant to President Biden’s request for a review. As part of this process, HHS conducted a scientific and medical evaluation for consideration by DEA. DEA has the final authority to schedule or reschedule a drug under the Controlled Substances Act. DEA will now initiate its review.”
Cannabis has been in Schedule I since the Controlled Substance Act of 1970 was passed. This restrictive category is reserved for substances deemed to have no medical value and a high misuse potential. Despite this federal stance, states have for decades carved their own path with cannabis, and cannabis is now legal for either medical or adult use in nearly every state.
Schedule III would not legalize cannabis, but it would be the first change in the federal categorization of cannabis in more than fifty years, and the first acknowledgement of its therapeutic potential.
“We classify marijuana at the same level as heroin – and more serious than fentanyl. It makes no sense,” Biden said in his October announcement, referring to the current federal approach to cannabis.
While the full scope of potential ripple effects from rescheduling remain to be seen, some outcomes are certain. Researchers will have an easier time studying cannabis as it will be subject to fewer hurdles in Schedule III.
And, the cannabis industry could see some long-awaited tax relief. For years, a major thorn in the side of cannabis operators has been Revenue Code Section 280E, which does not allow cannabis businesses to make the same deductions as other businesses; however, 280E only applies to substances in Schedule I and II.
If cannabis is ultimately moved to Schedule III, which is in the hands of the DEA at this point, the U.S. would be following a global trend. In 2020, as Cannabis Wire reported at the time, the United Nations voted, in agreement with a recommendation by the World Health Organization, to reclassify cannabis in a way that recognizes its therapeutic potential.
This is a developing story.
