DEA’s Rescheduling of Cannabis: A Major Leap Towards Federal Legalization?
On September 11, 2024, cannabis reform made headlines as the Drug Enforcement Administration (DEA) pushed forward the process of rescheduling cannabis from Schedule I to Schedule III under the Controlled Substances Act (CSA). This rescheduling has been seen as the most significant move towards federal legalization in over 50 years. While the ultimate fate of cannabis legalization remains uncertain, this change could reshape the landscape of cannabis research, regulation, and industry operations in the United States.
The Rescheduling Process: What’s Happening Now?
Earlier this year, the DEA acted on President Biden’s call to reevaluate the classification of cannabis. Following a recommendation from the Department of Health and Human Services (HHS), the DEA opened a 60-day public comment period, which ended on July 22, 2024. An overwhelming 43,000 comments were received, primarily in favor of rescheduling, reflecting growing societal support.
The next major step will be a hearing set for December 2, 2024, overseen by an administrative law judge. This process, resembling a legal trial, could extend over months or even years before a final rule is published. Stakeholders wishing to speak at the hearing must register by September 25, 2024. Despite potential delays or challenges, the DEA’s move marks a step towards aligning federal cannabis policy with the growing body of scientific evidence.
Support for Cannabis Rescheduling Grows
Support for rescheduling cannabis continues to gain momentum, backed by an array of lawmakers, medical professionals, and advocacy groups. Recent studies have shown the efficacy of cannabis in treating chronic pain, epilepsy, and other health conditions, reinforcing the idea that cannabis poses less risk of abuse than previously believed.
A notable analysis by the cannabis data firm Headset revealed that an impressive 92.45% of public comments were in favor of reclassifying cannabis. Such a significant majority underscores the increasing acceptance of cannabis use in the U.S., both for medical and recreational purposes.
Challenges on the Horizon
However, several obstacles still stand in the way. For example, the Republican-led House Appropriations Committee recently approved an amendment to block the rescheduling efforts. The amendment prevents federal funds from being used to support the DEA’s rescheduling process. Furthermore, a change in administration following the upcoming presidential election could halt or reverse the DEA’s progress.
Additionally, federal rescheduling presents complex challenges for the cannabis industry. Although rescheduling to Schedule III would allow cannabis businesses to avoid the onerous tax restrictions under Internal Revenue Code Section 280E, many cannabis companies are concerned about new regulations they may face. Schedule III drugs, like other pharmaceuticals, are subject to more stringent testing and regulation, which could create financial challenges for smaller cannabis operations that struggle to compete with larger pharmaceutical and tobacco companies.
What Does This Mean for Cannabis Legalization?
Rescheduling cannabis would mark a shift in federal drug policy but may not be a definitive step toward full legalization. While it would ease some regulatory burdens and align federal policy more closely with public opinion, other legal hurdles remain. The legal risks faced by financial institutions working with cannabis companies, for instance, are unlikely to disappear without further federal legislative action. This means that access to financial services for cannabis companies could remain restricted even after rescheduling.
Conclusion: The Future of Cannabis Policy
The DEA’s efforts to reschedule cannabis reflect a broader societal change and the growing recognition of cannabis’s medical value. While rescheduling may bring immediate relief to parts of the cannabis industry and improve access to cannabis for medical research, significant challenges remain in aligning state and federal policies. As the hearing approaches in December 2024, all eyes are on the DEA as they navigate this critical juncture in cannabis policy. This decision could shape the future of cannabis research, access, and business in the U.S. for years to come.
Citations:
Malyshev, A., & Ganley, S. (2024, September 11). Current status of cannabis rescheduling and the next steps. Reuters Legal News & Westlaw Today.