.DEA Considers Reclassifying Cannabis, Boosting Legal Industry and Research

Likely rescheduling will only bring limited relief to an industry in peril

We enter 2024 without much hope that the feds will legalize weed—though, you never know—but with some optimism that progress will be made on various cannabis reforms.

That optimism turned up a notch or two last week when Punchbowl News reported that the Drug Enforcement Administration is considering a recommendation to reclassify cannabis as a Schedule 3 narcotic. At the moment, it’s still under Schedule 1, putting it in the same legal category as heroin and LSD. Under Schedule 3, it would be in a class with ketamine, testosterone and steroids.

Rescheduling would give a big boost to the legal cannabis industry in a few different ways; chiefly, it would allow cannabis companies to write business expenses off on their federal taxes. Among other benefits, it would also make life much easier for cannabis researchers who currently work under onerous restrictions.

It might sound bizarre that serious cannabis reform is in the hands of the DEA, historically the government’s literal army in the War on Drugs. But that’s the agency that makes scheduling decisions like this under the Controlled Substances Act. And it seems more likely than not that it will follow through.

The Congressional Research Service in September concluded that it was more likely than not that the agency would abide by the recommendation of the Department of Health and Human Services, and reschedule. The fact that a DEA official reportedly told a member of Congress in recent weeks that the matter is under active review tends to support that notion.

In its report, the CRS noted that the DEA had recently indicated during congressional hearings that it is “bound by (Food and Drug Administration) recommendations on scientific and medical matters, and if past is prologue it could be likely that DEA will reschedule marijuana according to HHS’s recommendation. CRS is unaware of any instance where DEA has rejected an FDA recommendation to reschedule.”

In other words, if the DEA ends up leaving pot under Schedule 1, it would not only be an unprecedented move, it would run directly counter to the agency’s own recent assessment of its responsibilities. It seems likely that in the coming months, pot will be less illegal than it is now at the federal level.

But it won’t be legal, which means that the beleaguered industry will get only limited relief. For the California industry in particular, it seems unlikely that there will be much tax or regulatory relief forthcoming—though, again, you never know.

Rescheduling, though, would have an impact beyond the technicalities of the law. It would be one more major step toward normalizing weed, which would make it that much easier for federal lawmakers to vote to legalize. Indeed, if it weren’t for a relatively few recalcitrant lawmakers with power over what gets voted on—mostly Republicans led by Senate Minority Leader Mitch McConnell—it’s likely that legalization would sail through both Houses of Congress if a vote were held tomorrow.

It’s difficult to know whether “optimism” is the right reaction to these recent developments. But it helps to remember that just 10 years ago, pot was illegal for non-medical use in every state. Now, it’s legal in 24 of them and counting; support for legalization is now north of 70%; and President Joe Biden, a lifelong drug warrior, is pushing through reforms such as the expungement of criminal records for people convicted of cannabis-related offenses.

Taking stock of all this, Congressman Earl Blumenauer, an Oregon Democrat and longtime advocate of cannabis reform, wrote a letter last week to “cannabis stakeholders,” looking back over the progress that has been made and his hopes for the future.

“Cannabis is a winning issue. [No] one has been penalized by voters for their embrace of cannabis reform. Despite dysfunction in Congress, we can accomplish significant reforms in cannabis in 2024. In the coming year,” wrote Blumenauer, who recently announced he will not seek re-election in 2024, “we will take bold action to end the failed war on drugs once and for all.”


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