Justice Department officially proposes marijuana reclassification

The Justice Department has formally proposed a rule that would reclassify marijuana into a class of less dangerous drugs.

The proposed rule sent to the Federal Register will reclassify marijuana from its current spot as a Schedule I drug under the Controlled Substances Act to a Schedule III drug. As part of that scheduling, marijuana would officially be considered to have less potential for abuse than Schedule I substances such as heroin and LSD.

Once moved to Schedule III, marijuana would be on the same regulatory level as drugs such as ketamine and anabolic steroids. Rescheduling, however, does not legalize or decriminalize the drug.

News of the impending proposal broke late last month, and came following a review of federal marijuana law that President Joe Biden called for in 2022, and follows a recent recommendation made by the U.S. Department of Health and Human Services. Reclassifying the drug could have implications for marijuana businesses in states where the drug is legal for medical or recreational reasons, and make researching marijuana easier.

“This is monumental,” Biden said in a video announcing the proposal. “Far too many lives have been upended because of a failed approach to marijuana, and I’m committed to righting those wrongs. You have my word on it.”

Biden and a growing number of lawmakers from both major political parties have been pushing for the Drug Enforcement Administration decision as marijuana has become increasingly decriminalized and accepted, particularly by younger people.

Technically known as a notice of proposed rule making, the move will have the DEA take public comment on the potential change for 60 days. Following that, the rule may be reviewed by an administrative judge before it takes effect, which may be a long process.

Some critics argue that the DEA shouldn’t change course on marijuana, saying rescheduling isn’t necessary and could lead to harmful side effects. Others argue that marijuana should be treated the way alcohol is.

As a Schedule III drug, marijuana would still be regulated by the DEA. State medical and recreational marijuana programs would also remain illegal at the federal level once the change took effect, according to the Congressional Research Service.

Marijuana businesses in states where the drug was legal for recreational or medical purposes, however, could see some benefits from reclassification. Chief among them is a potential reduction in cannabis businesses’ federal tax burden, which can be 70% or more, according to industry groups.

That’s because of an Internal Revenue Services rule that prevents businesses that “traffick” in Schedule I or II substances from deducting regular businesses expenses from their federal taxes. If marijuana moved to Schedule III, those businesses would be able to deduct expenses on federal taxes.

In addition, the move might make marijuana easier to study and research, as it is much more difficult to conduct authorized clinical studies on Schedule I substances.

This report contains information from the Associated Press.