The Federal Government Just Recommended a Major Change to Marijuana Classification

The U.S. Department of Health and Human Services made a landmark recommendation to move marijuana from a Schedule I to a Schedule III controlled substance on Wednesday. And while the move falls short from federal legalization, the impacts to the cannabis industry would be huge nonetheless.

Currently, marijuana is listed as a Schedule I drug by the Drug Enforcement Administration, which is defined as "drugs with no currently accepted medical use and a high potential for abuse." Other examples of Schedule I drugs include heroin, LSD, and ecstasy.

If the DEA should approve the HHS recommendation, the biggest impacts would be tax breaks for cannabis companies and the ability to research the medical benefits of the drug.

As a Schedule I substance, marijuana is generally considered too dangerous to research with human subjects, and the supply in the capacity for research is also extremely restricted. Likewise, the rescheduling would allow cannabis companies to take advantage of tax deductions that most other types of companies are able to benefit from.

Edward Conklin, executive director of the US Cannabis Council, said that reclassifying marijuana would be "the most significant federal cannabis reform in modern history."

"Cannabis should have never been scheduled alongside heroin and placed at the center of our nation’s destructive drug war,” Conklin told Bloomberg, which was the first to report the news on Wednesday. "Thankfully that era is coming to a close and is being replaced by a modern and scientific approach to regulating this plant."

Because Schedule III substances are still controlled, it's likely that a prescription would still be needed in states that haven't already regulated marijuana for recreational use, similarly to Tylenol with codeine, ketamine, anabolic steroids, and testosterone, which also fall under the classification. However, the ability to research cannabis would open the door to other types of marijuana-based prescription drugs.

Senate Majority Leader Chuck Schumer (D-NY) applauded the recommendation in a statement on Wednesday.

"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," said Schumer. "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."

President Joe Biden had previously asked HHS Secretary Xavier Becerra and U.S. Attorney General Merrick Garland to review how marijuana is scheduled, while announcing a pardon of all prior Federal offenses of simple possession of marijuana last October.

The HHS findings were based on a "comprehensive scientific evaluation" by the Food and Drug Administration, which was expedited in under 11 months to comply with the president’s request. In conjunction with the FDA review, which considered eight factors that determine the control status of a substance, the National Institute on Drug Abuse likewise agreed with the recommendation.