We’ve had a bit of a sudden development in the cannabis world recently! The White House announced last week that the wonderful plant we have all held in high regard for years will now be reclassified to a Schedule III level of controlled substances, a stark evolution in cannabis legality. As the industry holds its breath while we wait to see what exactly will be written into law, lawmakers and investors are speculating on the possible horizons that this change will bring.
Cannabis is still not federally legal, but rescheduling it certainly reveals several paths that can lead us there. The Controlled Substances Act defines a Schedule I substance as having a high potential for abuse with no accepted medical usages; this category includes substances such as heroin, GHB, and more highly addictive substances. Schedule III categorizes substances with a low-to-moderate risk for dependence alongside accepted medical uses, and includes anabolic steroids, ketamine, and other prescribable drugs. Essentially, rescheduling cannabis to Schedule III could provide a more realistic foundation to base future cannabis legislation on. Rescheduling also has the potential to encourage more leniency in legal punishment within nonlegal states – however, it is important to note that this news will not automatically mean expungement of records for nonviolent cannabis convictions.
Another exciting bit of progress that can come from this major development regards tax restrictions for cannabis companies. Since cannabis became medically legal in the state of California in the 90’s, cannabis companies have been forced to operate under Tax Code 280E, which classifies growers and sellers as traffickers of controlled substances. Rescheduling cannabis will open up billions of dollars in tax revenue across the industry as it lifts these restrictions. While this seems like a hopeful advancement, some argue that these tax cuts will primarily benefit large cannabis companies while leaving smaller companies behind. Marijuana research is also severely restricted under these circumstances as related business expenses are unable to be deducted – this is no longer an issue once rescheduling is made official.
Furthermore, pharmaceutical companies will now have more leeway to develop cannabis-derived medicinal products and get them in front of the FDA. This is another possible point of contention with rescheduling cannabis – growers and sellers will potentially need FDA approval to continue operating which can lead to increased complications for smaller businesses. Rescheduling could also help expand access to cannabis for those with medical needs. According to Forbes, “the executive order also includes a pilot program that would allow senior citizens on Medicaid to get reimbursed for CBD and medical cannabis products,” thus providing alternative treatment paths for seniors and hopefully more folks in the future.
All in all, we’re watching a very interesting development in our industry unfold! Stay tuned for future updates regarding cannabis scheduling, industry news, and all things Bud & Rita’s!
