Why legal weed advocates aren't sold on Biden, DEA marijuana rescheduling

WASHINGTON — The U.S. Drug Enforcement Administration is set to imminently reschedule cannabis as a Schedule III drug, according to The Associated Press, representing a monumental shift in U.S. drug policy but one that advocates say doesn't go far enough.

The DEA has yet to publicly announce the rescheduling, which follows a formal recommendation by the Department of Health and Human Services last year. President Joe Biden, facing reelection this fall, tasked the HHS with exploring the possibility of rescheduling marijuana in 2022.

Marijuana legalization advocates on Tuesday met the news not with the jubilant cheers that often accompany successful statewide legal weed initiatives, but with a brooding sense of too little, too late.

“It is significant for these federal agencies, and the DEA and FDA in particular, to acknowledge publicly for the first time what many patients and advocates have known for decades: that cannabis is a safe and effective therapeutic agent for tens of millions of Americans," said Paul Armentano, deputy director of the National Organization for the Reform of Marijuana Laws, the country's oldest marijuana legalization advocacy group.

"The cannabis plant should be removed from the Controlled Substances Act altogether, thereby providing state governments - rather than the federal government - the ability to regulate marijuana in the manner they see fit without violating federal law, and allowing the federal government to provide standards and guidelines for regulated cannabis markets," Armentano said.

More:What to know about the federal government's big changes to marijuana rules coming soon

Once the DEA officially moves to reschedule marijuana, it will open a 60-day public comment period before the White House Office of Management and Budget makes the final determination.

Under the Controlled Substances Act, Schedule III drugs are substances determined to have medicinal value with a low to moderate potential for addiction, such as ketamine, testosterone, anabolic steroids or Tylenol with codeine. Cannabis has been listed as a Schedule I drug for 54 years, designated as having no medicinal value and a high potential for addiction and treated on the same basis as heroin, LSD and ecstasy.

As medical marijuana programs took off in 37 states over the last 30 years, the federal government's position that cannabis had no medicinal value became harder and harder to defend. Calls for federal change have only heightened in the last 10 years as 24 states, including New Jersey, passed laws legalizing weed for recreational use, leading to billions in sales and the birth of a new industry.

While Biden's move to reschedule cannabis has been welcomed in most progressive circles, longtime marijuana legalization advocates have framed the decision as more of a symbolic first step. Organizations like NORML have instead called for Biden to completely "deschedule" cannabis - removing it from the Controlled Substances Act completely.

Such a move would treat cannabis like alcohol or tobacco, subject to federal and state regulation and taxation. Even as a Schedule III drug, arrests in states that haven't legalized weed could continue.

In January, a group of 10 senators - including Sen. Cory Booker, D-N.J., called for descheduling as a way to "relieve the burden of current federal marijuana policy on ordinary people and small businesses" in a letter to Attorney General Merrick Garland and DEA Administrator Anne Milgram.

More:Biden administration plans to drastically change federal rules on marijuana

“I’m underwhelmed by the progress made during President Biden’s administration, I think it was fair to expect more,” said Matthew Schweich, executive director of the Marijuana Policy Project, which advocates for cannabis policy reform. “It was absurd to consider cannabis to be more dangerous than heroin, as is the case today. It will remain absurd to consider cannabis to be more dangerous than alcohol, Xanax, and Valium, which will still be the case after this rescheduling takes effect.” 

That doesn't mean the decision is without benefits. It likely spells the end of cannabis' placement in Section 280E of IRS tax code, which forbids businesses involved in the "trafficking" of Schedule I and Schedule II substances from deducting "ordinary and necessary" business expenses from their taxes.

Under Schedule I, legal weed businesses - from cultivators to dispensaries - were considered such businesses. Cannabis market research firm Whitey Economics reported that the designation led to an additional $1.8 billion in federal taxes last year, expected to balloon to $2.1 billion this year if cannabis remained a Schedule I drug.

"It's really hard for these cannabis businesses to keep their heads above water," Cannabist Company senior vice president Adam Goers told the Asbury Park Press in January. "They're at a huge competitive disadvantage against the thing they were set up to stop – the traditional, illicit market."

The hope is that removing such a burden could result in lower prices for consumers, though multistate operators regularly charge different prices for cannabis in different states, despite federal tax implications.

The move to reschedule cannabis comes as talk of federal marijuana legalization has largely stalled out.

In recent years, Congress has come close to passing bills that would protect federally insured banks that take on cannabis clients and protect consumers and businesses in legal weed states from enforcement of federal law. But that legislation never passed and, in this congressional session, Democrats have been slow to tackle legal weed as a top-line priority.

Marijuana legalization remains an immensely popular and bipartisan issue: A November 2023 Gallup poll reported that 70% of Americans were in favor of legalizing weed, including 87% of Democrats and 55% of Republicans.

"Rescheduling marijuana is not a policy solution for federal marijuana criminalization or its harms, and it won’t address the disproportionate impact that it has had on Black and Brown communities," said Cat Packer, director of drug markets and legal regulation at the Drug Policy Alliance, which advocates for federal drug policy reform. "Congress and the Biden Administration have a responsibility to take actions now to bring about marijuana reform that meaningfully improves the lives of people who have been harmed by decades of criminalization.

"Descheduling and legalizing marijuana the right way isn’t just good policy, it’s popular with voters, too.”

Mike Davis has spent the last decade covering New Jersey local news, marijuana legalization, transportation and basically whatever else is going on at any given moment. Contact him at mdavis@gannettnj.com or @byMikeDavis on Twitter.