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(The Center Square) – As the U.S. government inches closer to reclassifying marijuana as a less dangerous drug, cannabis industry leaders in Washington state are excited about the possibility of relaxed federal regulation.
Earlier this year, the Justice Department confirmed that the Drug Enforcement Agency, agreeing with the U.S. Department of Health and Human Services, is proposing to move marijuana from Schedule I status to Schedule III status under the Controlled Substances Act.
Although the DEA has no timeline for its final decision, it has scheduled an administrative hearing on Dec. 2. That means any decision on the matter will likely be made next year.
Schedule I status means there is no accepted medical use and a high potential for abuse. Schedule I drugs include heroin and LSD. Federal law prohibits the cultivation and possession of Schedule I drugs, except for approved research studies.
Marijuana has been a Schedule I drug since 1970.
Schedule III substances are considered to have medical use and moderate to low potential for physical and psychological dependence. Prescription drugs such as anabolic steroids, ketamine and testosterone are in the Schedule III category.
The Justice Department’s proposal means the federal government would recognize the medical use of cannabis, but wouldn’t legalize it for recreational use.
“Reclassification of cannabis will one day improve the lives of patients and better support economic opportunity for those working and investing in Washington’s safe, quality-controlled and regulated cannabis marketplace,” said Aaron Pickus, media relations head at the Washington CannaBusiness Association, an organization representing Washington’s licensed and regulated cannabis and hemp industry.
He continued: “If adopted, reclassification will resolve the issue of 280E, a longstanding challenge for legal businesses who are blocked from making normal tax deductions on their federal returns.”
If reclassification is implemented, marijuana businesses can officially take federal tax deductions that they’ve been barred from under an Internal Revenue Service code known as 280E.
“We also call on lawmakers to advance additional opportunities to support a safe, viable legal marketplace that keeps products out of the hands of kids by adopting the SAFER Banking Act,” Pickus said, “removing Washington’s ban on access to capital for local businesses and further aligning the regulations governing the legal cannabis industry with the same expectations that workers and business owners in any other legal industry are afforded.”
The Secure and Fair Enforcement Regulations, or SAFER, Banking Act would allow banks to provide services to the cannabis industry in those states where it’s now legal.
On Dec. 6, 2012, Washington became the first state in the nation to legalize recreational use of marijuana and the first to allow recreational marijuana sales, alongside Colorado. Washington legalized medical marijuana in 1998.
According to the Washington State Liquor and Cannabis Board’s most recent Annual Report, in the nearly 10 years since marijuana taxes and fees started being taken in “the state has collected $3.31 billion in excise tax and $37.32 million in fees alone through FY 2023. The revenue funds many important state responsibilities including health care, health education, and cannabis-related research.”
Not everyone is on board with loosening federal regulations on marijuana, including Smart Approaches to Marijuana President Dr. Kevin Sabet, a former White House drug policy advisor to Presidents Barack Obama, George W. Bush and Bill Clinton.
“Politics and industry influence have loomed over this decision from the very beginning,” Sabet said in a news release earlier this year. “Now, against the recommendations of prior Attorneys General, the medical community and law enforcement, the Administration unilaterally reversed decades of precedent despite volumes of data confirming marijuana’s harmfulness. Moreover, a drug can be taken off Schedule I only if it has accepted medical use – raw, crude marijuana has never passed safety and efficacy protocols. A drug isn’t medicine because it’s popular.”
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