Towards the end of August 2023, President Biden’s Department Health and Human Services (HHS) issued a letter to the Drug Enforcement Administration (DEA) requesting that cannabis be rescheduled from a Schedule I substance to a Schedule III substance. While there has been lots of talk about Schedule I and its’ associated substances (heroin, ecstasy, and cannabis), Schedule III is a lesser-known topic. Per the DEA’s official website, Schedule I substances are classified as “Substances in this schedule have no currently accepted medical use in the United States, a lack of accepted safety for use under medical supervision, and a high potential for abuse.”
Unfortunately, with cannabis listed as a Schedule I substance, all legally operating cannabis business are subject to tax code 280E (which we describe in greater detail here) as well as other federal implications. However, if cannabis were to be rescheduled as a Schedule III substance, it would not be affected by 280E as 280E only applies to Schedule I and Schedule II substances.
But what else would change if cannabis were to move to a Schedule III substance?
The DEA’s website notes on Schedule III that “substances in this schedule have a potential for abuse less than substances in Schedules I or II and abuse may lead to moderate or low physical dependence or high psychological dependence.” One key distinction to highligh between the definitions of Schedule I versus Schedule III substances is that Schedule I substances are noted to have “no currently accepted medical use in the United States”. That distinction is not made for Schedule III substances, and in fact, many of the substances in the Schedule III class are traditionally medical use only.
Schedule III substances currently include testosterone, Tylenol with codeine, and anabolic steroids. When compared to the more recreational or “hard drug” substances in Schedule I, it’s clear that the Schedule III classification would support solidifying cannabis as a medicinal property. With thirteen states currently not allowing cannabis even for medicinal use, this reclassification could be pivotal in allowing medicinal cannabis access to their residents.
While medicinal studies on cannabis use are still in their infancy, key studies researching positive effects of cannabis and cannabinoids will continue. The future is clear- continued research will only reiterate that cannabis undoubtedly has medicinal properties. Classifing cannabis as a Schedule III substance will support these notions on a federal classification level- a step down the path to federal legalization.
For more on cannabis industry updates and news, stay tuned to the MJ Platform blog.
