What's Happening?
A recent executive order has reignited efforts to reschedule marijuana at the federal level, building on previous directives to review its Schedule I status. The order emphasizes that rescheduling would not legalize recreational marijuana but aims to expedite
the process and strengthen research infrastructure. The Department of Justice recommended rescheduling marijuana to Schedule III, reflecting accepted medical use and lower abuse potential. The DEA is tasked with completing the rulemaking process, which remains subject to administrative law requirements and potential litigation. The order also highlights the need for improved research methods and policy development for hemp-derived CBD.
Why It's Important?
Rescheduling marijuana to Schedule III could significantly impact the cannabis industry by alleviating tax burdens under Section 280E, which denies ordinary deductions to traffickers of Schedule I and II substances. This change would improve cash flow for state-legal cannabis businesses, although banking and compliance issues would persist. The executive order also underscores the importance of research infrastructure, aiming to integrate real-world evidence into clinical practice. This could enhance the understanding of medical marijuana and CBD, influencing policy and regulatory decisions. The move signals a shift in federal priorities, potentially harmonizing state and federal policies regarding medical use.
