DEA Advocates for Cannabis Reclassification
In a landmark decision, the Drug Enforcement Administration (DEA) is advocating for cannabis to be reclassified under federal law. This recommendation follows eight months after the U.S. Department of Health and Human Services advised the change.
Current Status and Proposed Change
Cannabis is presently classified as a Schedule I substance, which means it is federally prohibited and considered to have a "high potential for abuse." The DEA proposes reclassifying cannabis as a Schedule III substance. This change would allow cannabis to be legally possessed in licensed pharmacies with a doctor's prescription, similar to other Schedule III drugs like anabolic steroids and ketamine.
Cannabis as Medicine
Schedule III drugs are recognized for their medical value but are only available with a prescription. This reclassification would place marijuana, which is widely used recreationally in the U.S. but not approved by the U.S. Food and Drug Administration (FDA), in an unusual category.
Despite this change, the current U.S. marijuana industry would remain federally illegal. However, if cannabis is rescheduled to Schedule III, retailers could benefit from significant tax savings. They would be exempt from Internal Revenue Code Section 280E, which prevents sellers of Schedule I and II drugs from claiming certain business deductions on federal tax returns.
Next Steps: Rescheduling Process
After the White House reviews the proposal, the rescheduling recommendation will be sent to the Justice Department, which will publish a proposed rule in the Federal Register. This will be followed by a public-comment period and hearings before an administrative law judge. The process, which is likely to face legal challenges, has an uncertain timeline. The Office of Management and Budget (OMB) could take up to three months to review, and the comment period could also extend for months.
Impact and Limitations of Rescheduling
Rescheduling cannabis will have minimal impact on state-regulated marijuana markets, which were established with cannabis classified as a Schedule I drug. The conflict between federal and state laws will persist. Additionally, the extent to which rescheduling would facilitate federally funded research remains unclear, as there are concerns that the Medical Marijuana and Cannabidiol Research Expansion Act might not sufficiently relax current restrictions.
Impact for CBD Consumers
Potential for More Research: Rescheduling might facilitate more federally funded research on CBD, leading to better understanding and potentially more effective products.
Limited Impact on State Markets: The reclassification might not significantly change the availability of CBD products in states where cannabis is already regulated.
Federal and State Law Conflicts: Ongoing conflicts between federal and state laws could continue to create legal uncertainties for consumers and businesses.
Uncertain Timeline: The rescheduling process is complex and could take a considerable amount of time, delaying any potential benefits for CBD consumers.
The Process Has Begun (Updated)
The rescheduling process has officially begun. The DEA has forwarded its approval to the Office of Management and Budget (OMB) at the White House, which has up to 90 days to review the recommendations from HHS and the DEA and give its approval. Although the OMB has the authority to block or delay the process, such an action is unlikely given the executive branch's involvement. As of now, it seems that President Biden has already approved this step, as indicated by his announcement on May 16.
“The administrative hearing is overseen by an administrative law judge who presides with the authority to administer oaths, issue subpoenas, accept or reject evidence, and allow for cross-examination,” states the Vicente website. “The type of evidence that may be presented in the hearing is much like a regular court proceeding and must be relevant to the DEA’s scheduling recommendation. Opponents will undoubtedly request a hearing and flood the agency with comments showing why marijuana must remain on Schedule I or go no further than Schedule II. Submitting comments to create a robust record of the evidence supporting marijuana’s reclassification is critical to a successful process.”
In summary, the public comment period is likely to ignite significant debate, and an administrative law judge may have the authority to alter the rescheduling recommendation substantially. This process could involve multiple hearings with various judges, potentially resulting in several different rulings. Since legal proceedings tend to progress slowly, these hearings could further delay the rescheduling. Moreover, the process is far from complete...
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