October 18, 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.

I’m Morgan Davis, a cannabis attorney in Raleigh, North Carolina. Let’s talk about how to keep your business protected and thriving.

So at the end of August, the Department of Health and Human Services made a recommendation to the Drug Enforcement Agency that cannabis should be rescheduled from schedule one to schedule three. Quick aside, there’s lots of conversation about rescheduling versus de-scheduling.

Rescheduling Versus De-scheduling

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. There are five schedules, but it still comes under the purview of the Drug Enforcement Agency and is still technically illegal unless used for approved purposes. De-Scheduling would be when it becomes completely federally legal and is no longer considered a controlled substance, would be then 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. 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

Schedule one is reserved for the most addictive, most dangerous controlled substances out there that have little to no known medical use. While most of us know at this point that that’s simply not where cannabis belongs, we’ll just take into account the fact that so many states have made medical cannabis programs or made exemptions for medical cannabis, recognizing at the state level that there is in fact a known medical use for it.

That being said, it’s been sitting there since the inception of the Controlled Substances Act since the 1970s, and it’s really, really hard to convince people who’ve been living under that horrible decision from the 1970s to do otherwise. And it’s not just reserved for cannabis. Lots of infusions are reserved there. For example, DMT, the main psychoactive ingredient in Iowa sugar, is also sitting in schedule one, as is LSD, which a lot of people would argue that it doesn’t belong in schedule one either, and that there are in fact medical uses for LSD.

Nonetheless, that’s where it’s at. So Department of Health and Human Services says we should reschedule it under schedule three, where it would sit with products that have a recognized medical use are and are not the most addictive in the market and not the most dangerous, but still should be controlled. 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 the allows them to take advantage of the two ADP exemption, which means they can start keeping some of that money in 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. 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 that that it shouldn’t be a controlled substance, that it is a natural product and should be treated as a natural product and be given to the people freely.

And it certainly shouldn’t be reserved for pharmaceutical or multistate operators who might benefit from this to 80 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. I see benefits to both sides.

And I agree that progress or progress is sake is not always good. But let’s talk about what has to happen. So at this moment, Department of Health and Human Services 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. But does that mean that the DEA will change its position, that it’s hard for so long? There’s just no guarantee to that. That being said, that doesn’t mean they have to technically, the current administration, the Biden administration, could, by executive order, legalize cannabis. In addition, DHHS of its own accord could reschedule cannabis.

There are other options and other mechanisms. It’s unlikely that those will be used, but it is likely that something at this point will be done about the classification of cannabis. And a lot of people are very optimistic that it will be moved from a schedule one to a schedule three. 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 end. On the intoxicating hemp product side, no idea. There are lots of question marks around either one. Most people believe that a 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 cannabis industry to your business.

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