DEA Advances Marijuana Rescheduling; Senators Propose Descheduling

Advocates of marijuana reform and those seeking an end to marijuana prohibition received welcome news this week.

Yesterday (April 30, 2024), The Associated Press reported that the Drug Enforcement Administration will move forward with reclassifying marijuana from Schedule I to Schedule III under the Controlled Substances Act (the “CSA”). The DEA’s decision comes eight months after the U.S. Department of Health and Human Services (“HHS”) recommended marijuana rescheduling.

Despite this news, marijuana is not yet classified as a Schedule III substance. Marijuana rescheduling must now be reviewed by the White House Office of Management and Budget (“OMB”). Once the OMB signs off, the DEA will issue a proposed rule rescheduling marijuana from Schedule I to Schedule III and invite public comment on the proposal. Rescheduling will not be final until the DEA issues a final rule on the matter.

Rescheduling marijuana to Schedule III does not amount to decriminalization, but it would recognize potential medical benefits of marijuana with a moderate to low potential for physical or psychological dependence. Marijuana rescheduling would place marijuana alongside substances like ketamine and anabolic steroids.

The day after such historic news from the DEA, Senators Schumer, Wyden, and Booker reintroduced the Cannabis Administration and Opportunity Act (“CAOA”). During a press conference on the bill, Senator Schumer referenced the rescheduling, calling it “not the end of the story.” He credited states for being “laboratories of innovation” on marijuana reform and called on the Congress “to bring federal cannabis policy into the 21st century.” CAOA would deschedule marijuana and remove it entirely from the CSA, instead regulating marijuana by, among other things addressing labeling of marijuana products, impaired driving, and research on cannabis’s health impacts, as well as initiating automatic expungement of federal, non-violent cannabis offenses. Senator Booker championed the original version of CAOA in 2022. The reintroduced version has 18 co-sponsors, the most marijuana-reform legislation has ever had.

Until a final rule is issued by the DEA or CAOA becomes law, marijuana remains a Schedule I substance, so uncertainty continues for marijuana businesses in state-legal markets. Last year, Ohio became the twenty-fourth state to legalize adult-use marijuana. Fifteen more states have legalized marijuana use only for medical purposes. Although rescheduling appears to be in the final stretch, marijuana businesses in state-legal markets continue to exist in limbo; they are legal and regulated by state law but federally illegal. Even after the DEA issues a final rescheduling rule, adult-use marijuana would be prohibited at the federal level. Only passage of a bill like CAOA would end federal prohibition on adult-use prohibition. Nevertheless, the news from the Administration and Senate this week is cause for marijuana-reform advocates to be hopeful. Indeed, stocks linked to cannabis surged as a result of the news.

If you have questions about how marijuana rescheduling or descheduling may impact your marijuana business, please don’t hesitate to contact Keenan JonesTom Haren, or any other member of the Frantz Ward Cannabis Law and Policy team.

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