The DEA Announces Intent To Reschedule Cannabis From Schedule I To Schedule III: What Does This Mean For The Industry?
The Biden administration’s plan to reclassify cannabis as a Schedule III substance through the Drug Enforcement Administration (DEA) could have profound implications for New York City’s cannabis industry, the state, and the entire nation. This move, recognizing cannabis’s medical benefits, signifies a major departure from its longstanding criminalization under the Controlled Substances Act and could significantly impact research and the industry as a whole.
What Is Schedule III?
The U.S. Department of Justice (DOJ) is proceeding with this recommendation, grouping cannabis with current Schedule III drugs like ketamine and Tylenol with codeine, indicating a lower risk profile. However, the White House Office of Management and Budget (OMB) has to approve the request. This process is expected to be lengthy, involving public comment, and could take months to finalize.
Currently designated as a Schedule I substance alongside heroin and ecstasy, cannabis has faced strict restrictions and has been deemed to have no accepted medical use. The proposed reclassification to Schedule III follows a comprehensive review by the U.S. Food and Drug Administration (FDA), prompted by President Biden’s support for the change.
In New York, where medical and adult-use cannabis are legal, this reclassification could open up new research opportunities and lead to potential illegal penalty reform. However, as with all of the 37 states plus the District of Columbia that have implemented some legalized cannabis program, New Yorkers will have to wait.
Potential Problems: What Does The Move To Schedule III Mean For The Cannabis Industry?
Restorative justice nonprofit Last Prisoner Project shared via Instagram that “there are no changes in how the criminal legal system punishes cannabis users” that will accompany the shift from Schedule I to Schedule III This is because under federal law, cannabis would remain illegal for recreational use, further perpetuating conflict with states that have legalized it.
Rescheduling Does Not Free Cannabis Prisoners, And Causes Federal-State Conflict
As Honeysuckle reported in August 2023 when the FDA first recommended that the DEA reschedule the plant, a move to Schedule III encompasses just as many potential problems as it does solutions. Rescheduling will not free anyone currently incarcerated on cannabis charges, nor would it guarantee any expungement of records in states where it is not already the policy to do so. And what becomes of the states that have legalized cannabis? Would their medical and adult-use markets be forced to close? Would their small businesses and local craft brands be shut out of the industry, assuming that these businesses might have trouble coping with the expensive price tags of pharmaceutical compliance?
Schedule III Could Cause Cannabis Accessibility Issues
Schedule III makes cannabis accessible only via pharmaceutical prescription. The disparity between rich and poor in our nation’s healthcare system may well be exacerbated by the imposition of rescheduling, because to have access to a pharmaceutical prescription, one needs a regular medical physician. That also assumes that one has a medical doctor willing to write such a prescription. Even in states with current medical programs, many healthcare professionals have been reluctant to engage with cannabis. Could the advent of new research under Schedule III make them more confident in the plant? It’s possible, but not guaranteed.
Could Rescheduling Erase Cannabis Product Categories?
There’s also the consideration that creating that pharmaceutical barrier could wipe out entire product categories of innovation that don’t meet DEA or FDA standards. That infused seltzer you liked at a party? The cooking oil or honey you used for an elevated dinner with friends? Those chocolates that helped you sleep? If they’re from a small company or pioneering a new category, they are in high danger of being snapped out of existence.
What Does Schedule III Mean For Cannabis Businesses And Tax Code 280E?
Supporters of the move to Schedule III are optimistic about the idea that cannabis businesses could …