The proposal must be reviewed by the White House Office of Management and Budget, and then undergo a public-comment period and review from an administrative judge, a potentially lengthy process.
Local marijuana industry leaders shared excitement over the proposal, but it is meeting mixed initial reactions from area leaders in law enforcement.
“It’s all confusing. This state has this, this state has that. I just wish they would all get together and make their mind up,” said Butler County Sheriff Richard K. Jones. “I believe it is a political issue right now. In law enforcement we call it the looney season. Anytime there is an election, no matter who the president is. Anything is possible.”
The plans come after President Joe Biden asked both HHS and the attorney general, who oversees the DEA, last year to review how marijuana was classified. Schedule I put it on par, legally, with heroin, LSD, quaaludes and ecstasy, among others.
Biden, a Democrat, supports legalizing medical marijuana for use “where appropriate, consistent with medical and scientific evidence,” White House press secretary Karine Jean-Pierre said. “That is why it is important for this independent review to go through.”
Schedule III drugs — which include ketamine, anabolic steroids and some acetaminophen-codeine combinations — are still controlled substances.
They’re subject to various rules that allow for some medical uses, and for federal criminal prosecution of anyone who traffics in the drugs without permission.
Law enforcement impact
No changes are expected to the medical marijuana programs now licensed in 38 states or the legal recreational cannabis markets in 23 states, but it’s unlikely they would meet the federal production, record-keeping, prescribing and other requirements for Schedule III drugs.
Maj. Mike Young of the Clark County Sheriff’s Office said the reclassification plans, at least for a state that has both legal recreational and medical marijuana programs, seems logical.
“Given the changes in law and the advancement in medical marijuana, for me personally it does make sense that there’s some reclassification,” he said.
There haven’t been many federal prosecutions for simply possessing marijuana in recent years, even under marijuana’s current Schedule I status, but the reclassification wouldn’t have an immediate impact on people already in the criminal justice system.
“Put simple, this move from Schedule I to Schedule III is not getting people out of jail,” said David Culver, senior vice president of public affairs at the U.S. Cannabis Council.
Young said confusion still exists in his community surrounding marijuana law.
“I think statewide, some of the education is probably still lacking. Which is creating confusion,” he said.
He does not think the reclassification of marijuana to a Schedule III substance will create much of an impact to sheriff’s offices.
“I think the greater impact will be at the penalty phase, not so much the enforcement,” he said. “Ultimately, it’s our responsibility to enforce the law, whether it’s something we agree on or don’t agree on. There will definitely need to be an education piece so there’s no confusion among law enforcement or the public.”
The Montgomery County Sheriff’s Office declined to comment on the reclassification plans.
Business, research impact
But rescheduling in itself would have some impact, particularly on research and marijuana business taxes.
Because marijuana is on Schedule I, it’s been very difficult to conduct authorized clinical studies that involve administering the drug. That has created something of a Catch-22: calls for more research, but barriers to doing it. (Scientists sometimes rely instead on people’s own reports of their marijuana use.)
Schedule III drugs are easier to study, though the reclassification wouldn’t immediately reverse all barriers to study. But among the unknowns: whether researchers will be able to study marijuana from state-licensed dispensaries and how the federal Food and Drug Administration might oversee that.
Under the federal tax code, businesses involved in “trafficking” in marijuana or any other Schedule I or II drug can’t deduct rent, payroll or various other expenses that other businesses can write off. (Yes, at least some cannabis businesses, particularly state-licensed ones, do pay taxes to the federal government, despite its prohibition on marijuana.) Industry groups say the tax rate often ends up at 70% or more.
The deduction rule doesn’t apply to Schedule III drugs, so the proposed change would cut cannabis companies’ taxes substantially.
Tracey McMillin, chief operations officer at Pure Ohio Wellness, said the reclassification could help business owners in the marijuana industry in several ways.
Pure Ohio Wellness operates a cultivation and processing site in Springfield and dispensaries in Dayton.
“Most importantly it will open up some banking and financing options for us that have previously been unavailable and it will allow us to be treated similarly to any other company as far as tax write-offs and things like that,” McMillin said. “It will also open the door to cannabis research which will benefit the population as a whole. Very exciting news!”
Rescheduling wouldn’t directly affect another marijuana business problem: difficulty accessing banks, particularly for loans, because the federally regulated institutions are wary of the drug’s legal status. The industry has been looking instead to a measure called the SAFE Banking Act. It has repeatedly passed the House but stalled in the Senate.
Some legalization advocates say rescheduling weed is too incremental. They want to keep the focus on removing it completely from the controlled substances list, which doesn’t include such items as alcohol or tobacco (they’re regulated, but that’s not the same).
Paul Armentano, the deputy director of the National Organization for the Reform of Marijuana Laws, said that simply reclassifying marijuana would be “perpetuating the existing divide between state and federal marijuana policies.”
Minority Cannabis Business Association President Kaliko Castille said rescheduling just “re-brands prohibition,” rather than giving an all-clear to state licensees and putting a definitive close to decades of arrests that disproportionately pulled in people of color.
“Schedule III is going to leave it in this kind of amorphous, mucky middle where people are not going to understand the danger of it still being federally illegal,” he said.
The Associated Press contributed to this report.
