Remember: In October 2022, President Biden announced he was pardoning all prior federal offenses for marijuana possession. He called on state governors do the same and also directed HHS and the Attorney General to conduct a review of how marijuana is scheduled under federal law.
“No one should be in jail just for using or possessing marijuana. Sending people to prison for possessing marijuana has upended too many lives and incarcerated people for conduct that many states no longer prohibit,” Biden said at the time.
HHS this week followed through on Biden’s order, sending its recommendations to the DEA on Tuesday. The DEA ultimately has the final say in how marijuana is scheduled and is not required to abide by HHS’s recommendation.
Marijuana is classified as a Schedule I drug under the Controlled Substance Act, meaning its considered to have “no currently accepted medical use and a high potential for abuse.”
HHS has not confirmed its recommendations, but Bloomberg reports the agency advised that marijuana be moved down to Schedule III, for drugs that have “moderate to low potential for physical and psychological dependence.”
David Culver, senior vice president of public affairs for the U.S. Cannabis Council, which supports marijuana legalization at the state and federal level, said rescheduling marijuana would have a significant impact on the growing cannabis industry.
Because marijuana is a Schedule I drug, businesses that sell it are prohibited from taking traditional business deductions.
“By moving into Schedule III, it would allow the industry to do that which would reduce their effective tax rate considerably,” Culver said. “Many of the companies are paying on average of 70, 75 percent. And this would allow them to reduce their tax rates to the more normalized tax rate.”
Without having direct knowledge, Culver speculated a final decision from the DEA could come as soon as the end of 2024, noting how the administrative process for the agency normally takes between six and 12 months.
