Well Leaf Nation, it’s happened. Today the Associated Press broke the news that the Drug Enforcement Administration (DEA) is agreeing with the top federal health agency and proposing to move Cannabis from Schedule I to Schedule III under the Controlled Substances Act (CSA).
This groundbreaking move comes more than 50 years after the plant was listed as a Schedule I drug in the first place — which classified it amongst heroin and LSD as a substance with no known medicinal value and high abuse potential. Other drugs currently listed under Schedule III include Ketamine and Codeine.
While many feel that rescheduling is a step in the right direction, there’s still a lot of work to be done and a lot of questions this potential change brings up. In the hours after the headlines, we’ve seen industry professionals, cannabis brands, mainstream celebrities and end consumers alike chime in with their thoughts and start chatting through the implications. It boils down to this: what could all this actually mean for the legal cannabis industry and its customers?
If the change is implemented, state-legal cannabis businesses could start taking federal tax deductions they’ve been previously barred from under Internal Revenue Service (IRS) code 280E. It would also remove penalties on financial institutions for working with these businesses, ensuring they have safe access to essential banking services such as checking accounts, credit cards and checks.
There’s also virtually no official research currently being conducted on Cannabis because the CSA requires scientists to apply with the DEA if they want to study Schedule I substances. Rescheduling would remove those research barriers, improving education around the plant and creating data that can ultimately be used to make better products for consumers.
This change could also have a significant impact on the way Cannabis is talked about online and how products are marketed to consumers. While there are currently strict limitations on advertising in the space (or even sharing what you’re seshing on via your story), moving to a Schedule III could open up more mainstream digital advertising platforms like Instagram and Google Ads to cannabis-related businesses and allow true freedom of speech for users.
For now, this is just a proposed change and nothing is happening yet. Unfortunately, this news doesn’t mean we can start sparking up in the streets, or that the recreational dispensary down the road can open up an account with a major bank tomorrow. It’s important to keep in mind that Cannabis is still federally illegal and rescheduling it will not legalize it. Even fully licensed brands in legal state markets would be technically going against federal law, and many existing criminal penalties would remain in place. With so many people still sitting in jail for non-violent cannabis offenses, this has been one of the biggest points raised by those who aren’t fully satisfied with the announcement.
What this news does mean is that the next step in the rescheduling process (which has been stagnant for quite some time) will begin. The rule will be reviewed by the White House Office of Management and Budget (OMB), and if approved, go to public comment before potentially being finalized.
At the end of the day, the DEA has finally recognized the medical value and low abuse potential of Cannabis. As this story continues to evolve, we’ll keep you posted with the latest from Leaf Nation.
