Cannabis And Psychedelics Industries: Summer’s Over, Where Are We?
As summer fades, many of us reflect on its swift passage. For me, the season was a mix of joy and ongoing tasks after a lengthy construction project at our beach house. Similarly, the cannabis and psychedelics industries are grappling with their own extended “construction” phases. They are working to establish themselves as respected sectors within the financial and regulatory landscapes, yet both face significant challenges as autumn approaches. Let’s delve into the current state of these industries.
Cannabis: Rescheduling And Regulatory Challenges
The cannabis industry has long been influenced by the fluctuating tides of legalization. It is frustrating to see that the fortunes of public cannabis companies often hinge on the latest legalization news or rumors. For example, at the end of 2022, there were high expectations that the SAFE Banking Act—which would protect banks working with cannabis companies—would pass. Despite these predictions, the legislation did not materialize.
In October 2022, President Biden directed his administration to consider rescheduling cannabis from a Schedule 1 to a Schedule 3 controlled substance. Such a change could remove tax penalties under Internal Revenue Code Section 280E, allowing for more research into cannabis’ medical benefits and potentially leading to a federally regulated medical cannabis market. While this move was welcomed by many, some argue that only full legalization would address the industry’s needs.
As of September 2023, the Department of Health and Human Services (HHS) recommended rescheduling cannabis to Schedule 3. This recommendation was based on scientific evidence showing that cannabis does have medical …