HHS Recommends Moving Cannabis to Schedule III
September 5, 2023In a significant development for the cannabis industry, the Department of Health and Human Services officially recommended last week that cannabis be reclassified as a Schedule III drug in a letter to the DEA. The result of a scientific review ordered by President Biden last year, the letter, which was obtained by Bloomberg, suggests that DEA move cannabis from its current category, where it is officially deemed to have high abuse potential and no medical value, to the less restrictive Schedule III. DEA has the final authority to make the change or ignore the HHS entirely.
“Following the data and science, HHS has expeditiously responded to President Biden’s directive to HHS Secretary Becerra and provided its scheduling recommendation for marijuana to the DEA on August 29, 2023,” an HHS spokesperson said. “This administrative process was completed in less than 11 months, reflecting this department’s collaboration and leadership to ensure that a comprehensive scientific evaluation be completed and shared expeditiously.”
While the change would not legalize recreational cannabis federally, it would nonetheless have major implications. Most significantly for the cannabis industry, moving to Schedule III would obviate the much-maligned IRS 280E rule that prevents cannabis businesses from claiming standard federal tax deductions, because that rule only applies to Schedule I & II drugs. It would also considerably loosen rules around researching the plant, which is currently tightly controlled by the DEA; the cannabis used in research comes from special government cultivation facilities and has been criticized for almost no recognizable relation to current commercial product.
Congressional lawmakers applauded the development. Senate majority leader Chuck Schumer, who has pushed for federal legalization said, “HHS has done the right thing and DEA should now quickly follow through on this important step to greatly reduce the harm caused by draconian marijuana laws. While this is a step forward, there is still much more that needs to be done legislatively to end the federal prohibition on cannabis and roll back the War on Drugs. I am committed to continuing to work in Congress to pass important marijuana legislation and criminal justice reform.”
Senator Ron Wyden, who has worked closely with Schumer on the issue said, “Ultimately, I believe that cannabis should be descheduled with strong federal regulations put in place to protect public health and safety—that’s why I introduced the Cannabis Administration And Opportunity Act with Leader Schumer and Senator Booker. However, the recommendation of HHS to reschedule cannabis as a Schedule III drug is not inconsequential. If HHS’s recommendation is ultimately implemented, it will be a historic step for a nation whose cannabis policies have been out of touch with reality.”
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