Industry Reaction to President Biden’s Cannabis Rescheduling

President Joe Biden confirmed May 16, 2024, that the Department of Justice (DOJ) and Drug Enforcement Administration’s (DEA) has definitive plans to reclassify marijuana from a Schedule I to Schedule III drug under the Controlled Substances Act (CSA). Cannabis has been classified as Schedule I since 1970.

Matt Darin, CEO of Curaleaf, the New York-based retailer operating cannabis dispensaries in 19 states, calls yesterday’s news “another important milestone in this very important process as we get closer to rescheduling cannabis to Schedule III and undoing the harms caused by the failed and discriminatory War on Drugs.”

What President Biden deems “monumental” and “an important move towards reversing long standing inequities,” aligns with the Department of Health and Human Services’ (HSS) stance that cannabis holds valid medical applications, with a potential for abuse lesser than other Schedule I substances, such as opium, cocaine and methamphetamine.

“This will unlock important research on the medical efficacy of cannabis and bring about real change for legal operators struggling under the burden of 280E taxes,” Darin says. “It’s very clear that the country is ready for this step, given that 92% of Americans are now in support of legalization in some form.”

What Rescheduling Could Mean for Americans

The historic shift in marijuana classification could help alleviate taxation burdens as Darin suggests. CCELL Global Chief Brand Officer Angela Pih agrees. “This decision will unshackle companies from 280E, giving brands more incentive to allocate funds towards marketing,” she says, adding that cannabis should never have been categorized as a Schedule I substance. Pih also predicts more financial opportunities will come with the easing restrictions, on a number of levels. “Interstate commerce opens new markets for growth and potentially have a positive impact on a frigid investment environment,” she says.  

Rescheduling of cannabis may also encourage other states above and beyond the 24 that have already legalized to revise their jurisdictional laws in favor of cannabis access for medical and recreational purposes, respectively. The change may encourage a shift within some state policymakers in support of a bill they would otherwise deny beneath its current classification.

Moreover, the rescheduling of cannabis could also affect international relationships as the global cannabis marketplace continues to expand its footprint. The reclassification of marijuana alongside drugs like anabolic steroids and some over the counter (OTC) drugs such as Tylenol, signals a more widespread acceptance of the plant and its therapeutic uses among the public. This is especially true of the late majority of the population who require the permissive nod from regulators before onboarding.   

“Every American deserves access to safe, high-quality products, and rescheduling is a step in that direction,” says Shai Ramsahai, president of Royal Queen Seeds. “We’re eager to take our work to the next level as policies shift, access to capital increases, and opportunities to reach new markets continue to arise following the rescheduling.”

For cannabis businesses, accessing capital while being affiliated with the federally incriminating (yet iconic) cannabis plant has resulted in a nagging pain point that may soon begin to lessen with legislative change. “The rescheduling of cannabis reflects a progressive change in our society that opens new opportunities for innovators,” says Brett Stevens, CEO of Nevada-based lighting company FOHSE. “It also means a better relationship with the banks, and in turn, more access to capital for cultivators across the United States,” he says.

A Step Toward Remediation

The history of cannabis and incarceration in the US is marked by racial disparities and harsh penalties. Anti-drug policies instated during the CSA’s inauguration, escalated by the War on Drugs in the 1980s, led to mandatory minimum sentences and mass incarcerations disproportionately affecting minority communities for non-violent cannabis offenses.

“Today’s rescheduling announcement is a big step forward toward eventual cannabis reform,” says Nathaniel “Nutta TICAL” Vereen, co-founder at TICAL Official. “This industry was built on the backs of non-violent offenders currently incarcerated for cannabis-related charges, and we hope that they, too, eventually receive the positive news that is rightfully deserved.”

While industry players both domestically and abroad had hoped for and perhaps even anticipated further good news in the form of federal legalization (or in other words, descheduling), this step marks a significant shift in the socio-political landscape of a country known for class inequities. And indeed, it’s a step in the right direction.

Granted the move to reschedule cannabis is “an encouraging and necessary step forward for the industry and nation at large, ultimately it’s not the final move needed in order to thrive,” states Ramsahai of Royal Queen Seeds.

CCELL’s Angela Pih applauds President Biden and his administration for this action. “It’s significant a standing president, for the first time in over half a century is rectifying this situation,” she says.

And like so many working to advance regulated cannabis to the next level, Curaleaf’s Darin says the brand “remains committed to collaborating with regulatory authorities, industry members, and the broader community to ensure the responsible and sustainable growth of the sector.”  

The reclassification of cannabis from a Schedule I to a Schedule III drug under the CSA represents a landmark decision and pivotal moment by the President and his administration. Acknowledging the medical applications of the plant and addressing the historical impact of cannabis criminalization is a necessary move as the shift in policy not only paves the way for research and economic opportunities, but also offers hope for rectifying the deep-seated issues of past and present inequalities.