The U.S. Department of Health and Human Services has petitioned the U.S. Drug Enforcement Agency to reclassify marijuana. The proposal will reclassify marijuana to a Schedule III drug from Schedule I (its current classification). This means that cannabis will be classified as a less harmful drug under the Controlled Substances Act. This move might potentially increase marijuana users’ acceptance of the drug. Although the change wouldn’t make marijuana legal, it might upgrade its status from Schedule I to Schedule III. LSD, ecstasy, and heroin are classified as Schedule I substances because of their great potential for abuse. Schedule III medications, however, can be purchased with a prescription.
What is a Schedule III Substance?
The Controlled Substances Act (CSA) currently lists marijuana under Schedule I. According to the CSA, substances are classified into one of five Schedules, with Schedule I being the most stringent. Substances listed as Schedule I are deemed to have a significant potential for abuse and no recognized medical purpose.
Substances under Schedule III, on the other hand, have a moderate to low potential for misuse, a use that is now recognized by medicine, and a low potential for psychological dependence. Suboxone, Ketamine, Tylenol with Codeine, and anabolic steroid medications are a few examples of Schedule III drugs. A prescription is required to use a Schedule III drug, and it can only be filled five times in total and no more than six months after it was first issued unless the doctor decides to extend it.
What Will Change, If Marijuana is Rescheduled to Schedule III?
Taxation
The way marijuana businesses will be taxed is one of the most significant effects of the rescheduling. IRC 280E would no longer be applicable to marijuana enterprises if marijuana is moved to Schedule III. Businesses under Schedule I or II are not permitted to deduct or claim any credits or credits other than the costs of products supplied under IRC 280E. As a result, marijuana-related enterprises now face a significantly higher tax burden than comparable companies in other sectors. For instance, a cannabis farmer faces a far higher tax burden than a farmer of other crops.
Research
It will also be considerably simpler to conduct marijuana research in the United States if the drug is moved to Schedule III. Marijuana is classified as a Schedule I substance and is therefore considered too risky for study involving human participants, even when doctors and other medical professionals are around.
Additionally, there is a very limited supply of marijuana available for research. Substances under Schedule III are nonetheless regulated, albeit less strictly than those on Schedule I. The prospective Schedule III rescheduling of marijuana will open up numerous study avenues and help U.S. researchers better understand the cannabis plant and the interactions it has with the body and mind. This will probably result in the development of further marijuana-based medicines that must be obtained through a prescription.
Banking
The marijuana industry’s access to financial services may or may not be impacted by the move from Schedule I to Schedule III. Although several risks can be diminished, they cannot entirely be eliminated. Time will tell whether and how the reclassification of marijuana will impact the risk threshold of banks, credit unions, and other financial service providers.
Legalization Standards
Moving marijuana from Schedule II to Schedule III will not make state-level marijuana programs legal. The CSA has stringent rules and specifications for the production and distribution of Schedule III drugs. The FDA certifies the production of certain medications, concentrating on specific methods of administration. For instance, just because the FDA permits a medicine containing marijuana doesn’t guarantee it will also approve all other kinds of marijuana. In other words, the legality of edibles or joints is not affected by the approval of pills containing marijuana derivatives.
Marijuana programs that are already legal in your state will continue to exist; rescheduling won’t make them legal. Instead, because Schedule III drugs face significantly less severe penalties than Schedule I drugs, it will make them slightly less illegal.
Bottom Line
Despite the fact that marijuana has been used for medical and recreational purposes in the United States for many years, it has long been regarded by federal law as one of the most unsafe drugs known to man.
In 1996, California became the first state to fully legalize marijuana for medical use. The year 2012 saw the first-ever recreational legalization of marijuana in Colorado and Washington. The federal government is actually prepared to shift its stance on marijuana’s legal status now, over 20 years after the first medical marijuana legislation and more than 10 years after the first recreational laws were passed.
This period will go down in history as a pivotal one for American drug policy, regardless of the outcome. We’ll keep track of developments and provide updates as necessary.
