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Schedule III: The DEA Begins the Process of Rescheduling Cannabis. What does that mean?

Schedule III: The DEA Begins the Process of Rescheduling Cannabis. What does that mean?

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1970 was a year of social and cultural upheaval in America. America had just emerged from the turbulent 1960s when movements on civil rights, women’s rights, and gay rights were building. To many Americans, it felt as if the fabric of society was unraveling. Protests against the war in Vietnam were exploding across school campuses across America. When Republican President Richard Nixon announced the escalation of the Vietnam War, anti-war protests, which had been largely peaceful, became increasingly disruptive as the more militant factions of the peace movement gained influence. Antiwar student strikes erupted into what was, at that time, the most massive coordinated disruptive demonstrations in U.S. history, encompassing 833 campuses with more than a million students participating.

Some American cities experienced violence and property destruction during riots as black Americans pushed back against institutional racism that had endured for centuries. And images of Black Panther members with guns were heavily promoted by the media. Establishment Americans bristled at the resulting social turmoil and what they perceived as a breakdown of societal norms.
The year before, half a million young people had gathered at the Woodstock concert as the American counterculture was at its height. The five-pointed image of the pot leaf had evolved into an iconic symbol of the rebellion and dissatisfaction of the “hippie” youth culture. While this all was happening, heroin was coming into America via the Golden Triangle in South Asia, and cocaine was entering the country from South America.

President Nixon and his advisors felt he needed a way to target and marginalize Americans whom he perceived to be a threat to his administration and establishment society. As part of the declared “War on Drugs, Nixon signed into law the Controlled Substances Act of 1970, which repealed the Marijuana Tax Act, passed in 1937, and designated cannabis/marijuana as a Schedule I drug — along with heroin and LSD. Schedule I drugs were said to have no medical uses and to be highly addictive and prone to abuse.

John Ehrlichman, at the time Nixon’s domestic policy chief, later told Harper’s writer Dan Baum, “We knew we couldn’t make it illegal to be either against the war or black, but by getting the public to associate the hippies with marijuana and blacks with heroin, and then criminalizing both heavily, we could disrupt those communities. We could arrest their leaders, raid their homes, break up their meetings, and vilify them night after night on the evening news. Did we know we were lying about the drugs? Of course, we did.”

Sentencing for federal cannabis cases has been based upon the plant’s status as a Schedule I drug ever since. Nixon’s strategy was very effective. The result has seen America become the largest jailer per capita of any nation, with the vast majority of marijuana arrests and convictions involving men of color. Communities of color specifically have been disproportionately targeted, profiled, prosecuted, and jailed. In areas of concentrated illicit cannabis production, such as portions of Northern California, drug task force members would swoop in with helicopters and automatic weapons, repelling down on ropes like an army to raid and arrest anyone they found present on a pot farm.

Slowly, after many decades of community organizing and activism, reform efforts started to see victories in states on the West Coast. Cannabis has incrementally been decriminalized, first for medical use, then for adult consumption and production, state by state. Today, thirty-eight of fifty states allow for some medical use, with 24 allowing recreational. However, every state that has permitted legalized cannabis has not complied with federal law, creating a tenuous and tangled legal status for cannabis.

But then the first significant crack in the foundation of cannabis prohibition in half a century occurred when, in October of 2022, President Biden directed federal agencies to review how cannabis is scheduled, prompting the Department of Justice and the Department of Health and Human Services to begin grinding the slow-moving wheels of bureaucratic action. In May this year, the DOJ and the Drug Enforcement Agency (DEA) released a Notice of Proposed Rule Making. After a period of comments, and with anticipated lawsuits and legal challenges, the United States Federal Government is expected to make the biggest change in the federal status of cannabis since the 2014 Cole Memos, which created a new set of priorities for federal prosecutors operating in states where medical or other uses of cannabis are legal.

So, what does all this mean for those of us who cultivate, imbibe, process, package, or sell cannabis? Well, this has never happened before, as we are in uncharted legal territory to a large degree, and in some regards, we will have to wait and see how this all plays out. But here is what is being predicted.

Assuming that cannabis will be changed to a Schedule III designation, it will be recognized as having medicinal applications and a lower potential for abuse. It will be moved to a category that currently includes prescription drugs such as Tylenol with codeine and Ketamine.

A Schedule III designation will not legalize all recreational adult use of cannabis currently regulated by various states where weed has been legalized. However, one of the biggest impacts a schedule change will see will be how it affects America’s nascent but growing cannabis industry. The FDA will now have jurisdiction to determine whether cannabis is a prescription drug and the appropriateness of doctors to prescribe it. It is notable that the FDA since it has approved cannabis derivative drugs for medical use in the past, is much more likely to find that cannabis has emerging medical value than the DEA, which previously had that authority.

The change in federal designation will immediately change the IRC 280E tax code sections that prevent cannabis businesses from deducting business expenses, which has created significant obstacles for turning a profit, and the new landscape might allow for amended tax returns, which would be a game changer for the industry.

Another area where a schedule change could see a notable impact would be in the field of cannabis research, allowing much greater opportunities for funding and increased access to actual raw cannabis and research applications. For years, the supply of testable cannabis available for scientific research was limited to that provided by the University of Mississippi, the quality of which was criticized. That should change, allowing researchers access to cannabis more in line with that which is commercially sold and consumed, leading to more accurate and thorough scientific investigation.

There are many other potential areas where notable changes are expected to take place. Most importantly, documented immigrants residing in America on visas automatically lose their status after any degree of cannabis violation. That will be a thing of the past if cannabis is moved to Schedule III because the immigration laws depend entirely upon Schedule I status for their draconian effects. Also, mandatory drug testing for Americans on parole or seeking fair housing or employment could be reduced or ended.

Some have predicted that this schedule change will not affect interstate transportation, nor will the cannabis industry gain access to international sales or purchases. The long-term impacts that a change in the federal status of cannabis could have on those federally incarcerated on cannabis convictions are not entirely known, as this is an unprecedented action. However, some legal experts suggest that interstate transportation and international sales may become possible with cannabis’s Schedule III status.

However, there is no immediate change expected for Americans serving prison time for weed, but there is the possibility of reform and clemency based on the change in status.
What are cannabis reformers saying about this development? I spoke to two prominent longtime legalization advocates to get their opinions:

Keith Stroup, founder of the National Organization for the Reform of Marijuana Laws (NORML):

As you know, NORML is a consumer lobby – we represent the interests of responsible marijuana smokers. Rescheduling marijuana from Schedule I to Schedule III has little, if any, impact on consumers. It will remain illegal under federal law, and the conflict between state and federal laws will remain.

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NORML continues to favor de-scheduling marijuana from the Controlled Substances Act altogether, which would resolve the conflict between state and federal law and would treat marijuana more like alcohol and tobacco, two far more dangerous recreational drugs, but neither are included in the federal Controlled Substances Act.

I should also make the point that symbolically, rescheduling from Schedule 1 to Schedule 3 is a big deal, as it is the first time marijuana has been moved from Schedule 1 since it was included when the Controlled Substances Act was adopted by Congress in 1970. The national media and editorial boards all across the country are interpreting this as a seismic shift in marijuana policy and an indication that the Biden administration is committed to ending marijuana prohibition and working towards the decriminalization of marijuana. So, rescheduling will likely turn out to have been an important step forward for the legalization movement, although it is really just a baby step.

Doug McVay, editor of Drug War Facts and host of DrugTruth Network’s Cultural Baggage and Century of Lies programs:

The scheduling debate was relevant in the 1970s. No longer. The Schedules in the federal Controlled Substances Act are based on international treaties that are outdated, no longer fit for purpose, and in need of being either overhauled drastically or replaced entirely. Schedule III drugs are only available by prescription from a pharmacy through licensed pharmacists. Only FDA-approved medicines can be prescribed legally, and weed — the flower — isn’t FDA-approved. Taking weed out of Schedule I could certainly open the door for pharmaceutical companies to develop medicines derived from weed, but it’s worth noting that if DEA were to propose moving weed to Schedule II as a “compromise” between hardliners and reality, then pharma could still develop medicines derived from weed, and sell those medicines at outrageously high prices, while companies involved in the weed business — actually growing, distributing, and selling flower, whether medical or recreational — would still get hosed by 280e.

Douglas Hiatt, longtime criminal defense attorney and legalization activist:

What do we know changing from Schedule I to III is going to do immediately? One of the things we know is immigration law will change overnight once it is out of Schedule I. Number two, the 280E tax penalty, goes away. That means the cannabis industry may be saved. Three, impact on federal prosecutions. It’s unclear what the impact on federal criminal law will ultimately turn out to be. But this is a huge change. It’s unclear what the effect will be on the federal criminalizing cannabis. When it goes out of Schedule I, their ability to use police power is changed. The whole essence of that is based on the dangerousness of the drug. Under Schedule III, it is tied to violating the regulations under prescription drugs. The difference is that the basis for the two types of criminalization will need to be reconciled, and Congress will have to make new findings concerning that criminalization.

It remains evident to anyone who knows the truth about cannabis that, rather than be at its current Schedule One, the relatively benign, therapeutic herb should be at Schedule None. While experts and activists might not all agree on how monumental a shift in federal cannabis policy the Biden Administration’s actions are, pretty much everyone agrees that this is a notable move in the right direction.

Photo credit: Jake W.

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