DEA May Reclassify Cannabis as Lower Level Drug

“It’s a landmark shift in what we’ve known for a long time, which is that to put cannabis on the same level as heroin and cocaine is an affront to every single person who’s using this medicinally and recreationally,” he said. “It adds more legitimacy and hopefully continues to change the stigma around the cannabis plant and, you know, the people who use it.”

The federal Drug Enforcement Agency has classified cannabis as Schedule I since 1970, listing it along with drugs — like heroin and cocaine — that the agency believes have no medical value.

The DEA is poised to reclassify cannabis to Schedule III, according to multiple unnamed sources who spoke to the Associated Press. There is no indication of when the shift may occur, and it would have to be approved by the White House Office of Management and Budget, though President Joe Biden has signaled his support.

“Criminal records for marijuana use and possession have imposed needless barriers to employment, housing, and educational opportunities,” Biden said last year. “Too many lives have been upended because of our failed approach to marijuana. It’s time that we right these wrongs.”

Ben Pomerantz, a partner at Stamford’s Carmody Law and head of the firm’s cannabis group, said the shift could have far-reaching implications for research, taxes, pharmaceuticals and banking. With large banking institutions concerned about its illegality, cannabis transactions have been limited to cash and debit. Pomerantz said that could now change.

“It will make it easier to operate these businesses as businesses,” he said. “This will make these these companies easier to operate, but who knows what other hurdles we’ll have to start to jump over.”

Cannabis would not be legalized, only reclassified, Pomerantz noted, which means some changes are as yet unknown: “I don’t want to make any comments at this point about interstate sales.”

George Archos, founder and CEO of Verano, one of the largest cannabis cultivators and retailers in the country and owner of the Zen Leaf brand, said the move would mean “another significant domino has fallen in the fight to legalize cannabis and unlock its full potential as an industry.”

Connecticut attorney Alex Taubes, who is representing Joe Accettullo and Cody Roberts, who have been accused of running illegal cannabis “gifting parties,” said it could impact both civil and criminal cannabis cases.

“The rescheduling of cannabis is long overdue and should be celebrated by everyone who believes in law and justice,” Taubes said. “I am hopeful that with this broad reevaluation of the positive potential for cannabis and its therapeutic benefits that all prisoners will be released and the repression of cannabis activists will end.”

Zachs said cannabis retailers would immediately be impacted by the tax implications of such a shift. At present, cannabis retailers may not deduct expenses, which Zachs said could change if cannabis is rescheduled.

“That’s a huge implication for us financially,” he said. “You can’t deduct any of your employees or your rent, you can’t deduct basically anything and this is a game changer for that.”

“Operationally, does it change the way we do anything? No. Does it change the check we need to write to the government? Substantially,” he said.

Cannabis-related research will also be impacted. Researchers have found studying the effects of cannabis and the chemical compounds it contains to be a challenge, considering the federal government’s view that it has no benefit.

“People have been using cannabis for thousands of years, but yet the sort of documented, empirical evidence to support what people are using it for has just been within the past few decades,” said UConn professor Steve Kinsey. “We’re dealing with a Schedule I compound which supposedly have no medical application, and yet now we have research showing that there are different applications for THC.”

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