The U.S. Department of Justice (DOJ) recently announced a recommendation that marijuana be taken off Schedule I of the Controlled Substances Act (CSA) and put on Schedule III instead. They have proposed a rule to do just that. Now they want your opinion about that rule.
As is the case before any administrative rule is added to the Federal Registry, the DOJ is compelled to take public comments for a period of time. That period of time is now open and will continue until the end of July.
In citing their recommendation to reschedule, the DOJ recognized that the cannabis industry is now worth billions of dollars across the country. Not only that, but they are also interested specifically in public opinion as to how rescheduling would impact the business side of things. It would seem the DOJ is less interested in the medical or social aspects of marijuana rescheduling. They are interested in the dollars and cents.
What Rescheduling Would Mean
A proposed rule to reschedule marijuana does not constitute an actual rule change. The proposed rule is just that: a proposal. The DOJ will not craft its final rule until after the public comment period. It is expected that a final rule will be submitted for entry into the Federal Register by the end of the summer.
Assuming the DOJ goes ahead with plans to reschedule, marijuana would no longer be in the same category as heroin and methamphetamine. Rather, it would be classified under the same category as anabolic steroids and ketamine. This means that medical cannabis could be open to more traditional prescriptions along with potential FDA approval.
Here is what it doesn’t mean: full legalization across the board. Rescheduling will not make recreational marijuana legal at the federal level. States wishing to continue their recreational marijuana programs will also be continuing to thumb their noses at Washington.
A Boon for Cannabis Businesses
Because the DOJ is specifically asking about input on the business side of things, it is important to note how rescheduling will impact marijuana growers, processors, distributors, and retailers. There are two key things to consider: tax deductions and banking services.
1. Tax Deductions
It is incredibly expensive to do business in the cannabis industry. In addition to high startup costs, expensive insurance policies, labor costs, etc., companies in the industry cannot claim any of their expenses on their taxes. That means they pay taxes on all their revenues rather than just their net income.
Rescheduling could change that. Because marijuana, at least for medical purposes, would no longer be considered implicitly illegal, companies producing and processing marijuana for medical consumption would no longer be involved in an illegal business. They would be able to claim their tax deductions just like any other business.
2. Banking Services
As things currently stand, patients visiting the Beehive Farmacy medical cannabis pharmacy in Salt Lake City, UT are expected to bring cash with them. Beehive Farmacy runs an all-cash business at both of their locations because they do not have access to traditional banking services that would facilitate electronic payments.
Banking services are not accessible because marijuana is still a Schedule I controlled substance. Rescheduling would remove the legal restrictions now preventing banks from offering services to dispensaries, growers, etc.
It looks as though the DOJ is going to reschedule marijuana. It will not mean substantial changes in the short term, but the long-term changes it will usher in will be big. Rescheduling is just the next step along the road to complete legalization. But even if marijuana is never legalized completely, the DOJ still wants your opinion.
