access banking services will also improve public safety and transparency.
Cannabis Reclassified: A Historic Milestone in U.S. Drug Policy Reform
Cannabis advocates, executives, and investors are rejoicing this week as the Drug Enforcement Administration (DEA) has reportedly made the decision to reclassify marijuana under federal drug laws. This groundbreaking development has sparked celebrations from coast to coast and a surge in cannabis stock prices.
However, while the news is cause for celebration, it falls short of the full legalization that determined activists have been fighting for for decades.
DEA Follows Recommendation to Reschedule Cannabis
According to the Associated Press, the DEA has decided to follow a recommendation from the U.S. Department of Health and Human Services to reschedule cannabis under the Controlled Substances Act (CSA). This decision, based on the recommendation of five unnamed sources familiar with the matter, will move marijuana from Schedule I to Schedule III.
Schedule I is the most strict classification, reserved for drugs with no medical value and a high potential for abuse. Schedule III, on the other hand, includes drugs like Tylenol with codeine and testosterone.
Unlocking the Medicinal Benefits of Cannabis
This decision to reschedule cannabis will have a significant impact on the regulated cannabis industry. Not only will it ease access to banking services, but it will also free licensed cannabis companies from IRS rule 280e, which denies most standard business deductions to companies selling Schedule I substances.
But perhaps the most exciting aspect of this decision is the potential for research into the medicinal benefits of cannabis. As a Schedule I drug, cannabis research has been hindered by strict regulatory conditions, preventing potential medical breakthroughs for a variety of physical and mental health conditions.
Reactions to the DEA’s Decision
After the news broke on Tuesday, policymakers, cannabis activists, and entrepreneurs hailed the decision as a historic milestone in U.S. drug policy reform. In Colorado, one of the first two states to legalize recreational marijuana in 2012, Democratic Governor Jared Polis expressed his excitement.
“I am thrilled by the Biden Administration’s decision to begin the process of finally rescheduling cannabis, following the lead of Colorado and 37 other states that have already legalized it for medical or adult use, correcting decades of outdated federal policy,” Polis said in a statement. “This action is good for Colorado businesses and our economy, it will improve public safety, and will support a more just and equitable system for all.”
Chuck Smith, president of the board of directors for Colorado Leads, an alliance of cannabis business leaders, also praised the decision. He stated that rescheduling cannabis under Schedule III will address the 280e tax issue that has unfairly burdened state-legal cannabis businesses. Additionally, allowing marijuana businesses to access banking services will improve public safety and transparency.
