Is Cannabis Rescheduling Imminent?
Rumors of an imminent drug policy announcement swept through the industry Tuesday morning after the Associated Press reported the Drug Enforcement Administration (DEA) plans to reschedule cannabis.
Citing five anonymous sources with knowledge of the decision, the AP reported the agency in charge of United States drug policy will change the plant’s classification under the Controlled Substances Act from Schedule I — the most restrictive category, reserved for substances with high addiction potential and no known medical uses — to Schedule III. The potential new classification would place cannabis in the same category as most barbiturates as well as prescription painkillers including gabapentin and tramadol.
“The agency’s move, confirmed to the AP on Tuesday by five people familiar with the matter who spoke on the condition of anonymity to discuss the sensitive regulatory review, clears the last significant regulatory hurdle before the agency’s biggest policy change in more than 50 years can take effect,” the AP reported.
The DEA has not confirmed the decision, but reclassification would cap a process that began more than a year ago when President Joe Biden tasked the departments of Justice and Health and Human Services with reevaluating cannabis’s legal status.
Among the biggest benefits the industry likely would see from rescheduling is the possible elimination of Internal Revenue Code Section 280E, which prohibits businesses that traffic in federally illegal substances from deducting customary business expenses from their federal income taxes. Viridian Capital Advisors examined the potential impact of 280E’s demise in September, extrapolating findings from the second-quarter …