Rescheduling Cannabis: HHS Makes Recommendation to DEA

Rescheduling of Cannabis has Major Developments

RESCHEDULING CANNABIS: In a groundbreaking announcement on August 30, 2023, the U.S. Department of Health and Human Services (HHS) signaled a historic shift in marijuana’s legal status. Riley Griffin’s report for Bloomberg unveiled that the HHS is recommending the rescheduling of marijuana from Schedule I to Schedule III.

Earlier speculations were fueled by HHS Secretary Xavier Becerra’s statement that the recommendation on marijuana rescheduling would be presented before the close of 2023.

This follows President Joe Biden’s directive in October 2022, urging HHS and the U.S. Attorney General to assess marijuana’s standing as a Schedule I substance.

The Influence of HHS Recommendation

While the HHS recommendation doesn’t hold binding power, its persuasive impact is significant.

The final decision rests with the Drug Enforcement Administration (DEA), a component of the Department of Justice under the oversight of the U.S. Attorney General. The rescheduling process is guided by the Controlled Substances Act (CSA), where the Attorney General has the authority to shift a substance to a different Schedule.

The evaluation requires HHS to analyze the drug via the U.S. Food and Drug Administration (FDA) and relay findings to the Attorney General based on scientific and medical factors. Currently, the DEA has received the HHS recommendation, as confirmed by Kyle Jaeger of Marijuana Moment.

Understanding Rescheduling

Presently, marijuana and delta-9 THC are categorized under Schedule I of the CSA, the most restrictive classification.

Schedule III substances, in contrast, are those with moderate to low abuse potential, established medical uses, and a reduced potential for psychological dependence. Drugs like Tylenol with Codeine, Suboxone, Ketamine, and Anabolic steroids fall under Schedule III. The reclassification would necessitate prescriptions, with limitations on issuance and renewal.

Taxation and Research Prospects

Rescheduling to Schedule III holds key implications. Marijuana businesses would experience transformed taxation dynamics, as Internal Revenue Code 280E (IRC 280E) restrictions on deductions would no longer apply. This would alleviate the tax burden faced by these businesses.

Furthermore, the research landscape would change drastically. With Schedule III status, research into marijuana’s effects would become more accessible, paving the way for an enhanced understanding of its medical properties and potential drug development.

Rescheduling Impacts the Cannabis Industry & Economy

Rescheduling cannabis from Schedule I to Schedule III could have significant impacts on both the cannabis industry and the overall economy.

Schedule III status could lead to a broader range of cannabis-based products becoming available in the market. This could include more pharmaceutical products formulations that could be developed and approved under the less restrictive classification.

In terms of impacting the overall economy, rescheduling could generate more jobs, tax revenue, and economic growth while reducing law enforcement costs.

Limits of Rescheduling

Despite the potential rescheduling, state-level marijuana programs would not be legalized. The Controlled Substances Act’s regulations persist, mandating specific manufacturing and distribution processes.

The FDA’s approval of marijuana-based drugs, such as Sativex and Marinol, doesn’t translate to a broad approval for all forms of marijuana. The penalties associated with Schedule III substances are milder compared to Schedule I, but the legality of state-level programs remains unchanged.

Rescheduling is a Turning Point in U.S. Drug Policy

For years, marijuana has carried the weight of being classified as a dangerous substance under federal law, despite its widespread medical and recreational use.

This recommendation marks a turning point in American drug policy, coinciding with the history of state-level legalization efforts and reflecting a potential change in the federal stance on marijuana.

The road ahead remains uncertain, but this announcement is a pivotal moment that could reshape marijuana’s legal status. Here at Fairwinds, we will remain hopeful and vigilant as this process unfolds.