President Trump’s recent executive order on December 18 aims to ease federal restrictions on marijuana, a move anticipated to significantly impact cannabis businesses. However, experts caution that this change is not straightforward and will not automatically alter existing federal laws surrounding marijuana.
Understanding Federal Drug Policy and Rescheduling Marijuana
The Controlled Substances Act (CSA) of 1970 has long categorized marijuana as a Schedule I drug, limiting its potential for lawful use. This classification denotes that the substance is considered to have no accepted medical use and a high potential for abuse. Analysts like Gillian Schauer from the Cannabis Regulators Association emphasize that the president lacks unilateral authority to reclassify drugs under the CSA.
Changes to drug scheduling usually require complex rulemaking processes or legislative action. The effectiveness of Trump’s directive remains uncertain, as it may not automatically retract laws governing marijuana usages, specifically interstate transportation.
The Role of the Department of Justice
The executive order assigns Attorney General Pam Bondi the responsibility of guiding the rescheduling process. The timeline for this will greatly depend on whether the Department of Justice (DOJ) opts for a streamlined rulemaking process or a more conventional method requiring public comment.
- Quick rescheduling: If Bondi chooses an expedited option, public comment periods may be bypassed.
- Traditional route: A lengthy notice-and-comment process could extend the timelines for rescheduling.
The executive order hints at a provision within the CSA that allows for potentially quicker scheduling, similar to the historic rescheduling of Epidiolex in 2018.
Potential Effects on Cannabis Businesses
Rescheduling could have immediate financial implications for cannabis firms. Currently, Section 280E of the Internal Revenue Code complicates tax matters for marijuana businesses, preventing them from claiming standard deductions. Sam Brill, CEO of Ascend Wellness Holdings, notes that the removal of this restriction could dramatically improve profitability.
- Immediate impacts: The removal of 280E could lower tax burdens.
- Credit card use: Financial institutions remain hesitant to work with cannabis businesses, limiting transaction methods.
Brill highlights that without credit options, cash transactions dominate, complicating both operations and customer experience.
Advancing Medical Research
President Trump’s order also aims to enhance medical research into cannabis by easing regulatory burdens on researchers. The anticipated changes would reduce the difficulties associated with obtaining Schedule I licenses and prepare laboratories for less stringent regulations.
Despite potential progress, challenges remain. Researchers will still encounter obstacles regarding the sources of marijuana for study, with procurement still reliant on limited facilities. Schauer points out that while these changes might facilitate some research aspects, significant hurdles will persist without a broader policy overhaul.
Conclusion
The future of marijuana rescheduling under the Trump administration involves navigating intricate federal laws and still uncertain pathways. While the executive order signals progress, the timeline and implications for cannabis research and business operations will become clearer as the DOJ takes further steps.
