October 25, 2023

Is the Federal Rescheduling of Cannabis Good or Bad?!

The rescheduling of cannabis at the federal level — is it a good thing? Is it a bad thing? Let’s talk about it.

The Call for Rescheduling Cannabis

So at the end of August, the Department of Health and Human Services made a recommendation to the Drug Enforcement Agency that cannabis be rescheduled from schedule 1 to schedule 3. Quick aside: there’s lots of conversation about rescheduling versus descheduling. Rescheduling means cannabis continues to be classified as a controlled substance; it’s just moved from a schedule one to a schedule three, which is a lower schedule.

Implications of Rescheduling

Descheduling would be when it becomes completely federally legal and is no longer considered a controlled substance. It would then be more seen as a commodity or any other type of ingredient out there. Maybe it would be regulated by the FDA, maybe it would be regulated by the TTB. Any number of options is out there, but it would no longer be considered a controlled substance and therefore would be outside of the purview of the Drug Enforcement Agency.

Cannabis in the Schedule 1 Conundrum

So, end of August, Department of Health and Human Services makes a recommendation to the Drug Enforcement Agency to move cannabis from a schedule one to a schedule three. Schedule one is reserved for the most addictive, most dangerous controlled substances out there that have little to no known medical use. Well, most of us know at this point that that’s simply not where cannabis belongs.

Perspectives on Rescheduling

There is a lot of infighting in the Cannabis Community as to whether or not this is a good thing. Some believe that it’s a good thing because it’s a step in the right direction and it gets businesses who are operating in the cannabis space out from under. It allows them to take advantage of the 280E exception, which means they can start keeping some of that money and fattening some of their margins which right now are pretty slim. They also would, under certain circumstances, be able to operate in interstate commerce as opposed to being siloed into states.

The Argument Against Rescheduling

Other people argue that, in fact, all it does is continue to leave cannabis in a place where it shouldn’t be. It shouldn’t be a controlled substance; it is a natural product and should be treated as a natural product. It should be given to the people freely, and it certainly shouldn’t be reserved for pharmaceutical or multi-state operators who might benefit from this 280E exemption. That still would prevent small businesses and personal cultivation and personal use and would keep a lot of the illegal aspects, the hurtful aspects, the bad history behind cannabis in place. Wherever you may fall in that argument, I see benefits to both sides, and I agree that progress for progress’s sake is not always good.

The Decision-Making Process

But let’s talk about what has to happen. So at this moment, DHHS has made a recommendation to the DEA. The DEA has to choose to take up that recommendation and do something about it. There’s no guarantee that will happen. The current administration has encouraged them to do so; the voting population grows every year for legalization so the pressure is on, certainly.

The Unknown Future of Cannabis Classification

What the world of cannabis will look like after that in terms of what will happen to state programs that currently allow recreational cannabis, no idea. What will happen to the hemp industry in the intoxicating hemp product set, no idea. There are lots of question marks around either one. Most people believe that complete legalization would clear the decks, but we shall see. Nonetheless, this is something to pay attention to because if it happens, it’s going to make a big difference no matter where you fall in the hemp or cannabis industry to your business.

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