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In a groundbreaking national marijuana news that could reshape the landscape of the cannabis industry, the U.S. Department of Health and Human Services (HHS) has recommended reclassifying marijuana from a Schedule I to a Schedule III drug under the Controlled Substances Act.
If accepted by the Drug Enforcement Agency (DEA), this recommendation could have profound implications for the cannabis tech sector.
A Substantial Shift: From Schedule I to Schedule III
Currently, the DEA classifies marijuana (sometimes called drug-type cannabis or non-hemp types with more than 0.3 percent THC) as a Schedule I substance. This scheduling puts it right alongside drugs like heroin and LSD, which, under this designation, are deemed to have a high potential for abuse and no accepted medical use.
This federal classification has been one of the major barriers to the industry’s growth. The stringent rules have hindered research, innovation, banking, and the sector’s overall growth — not to mention restricted patient access to cannabis as a medicine.
As Bloomberg reported today, August 30, 2023, “A top official at the Department of Health and Human Services wrote Drug Enforcement Agency Administrator Anne Milgram calling for marijuana to be reclassified as a Schedule III drug under the Controlled Substances Act.”
A shift to Schedule III would not only acknowledge the legitimate uses of this plant but also pave the way for federally funded research and national availability for patients.
Access to Schedule III drugs is controlled through a prescription. A few of the most commonly prescribed medications in the category are benzphetamine, ketamine, phendimetrazine, and steroids.
The official definition of Schedule III drugs details that they “have a lower misuse potential than I and II. Drugs in this category may cause physical dependence but more commonly lead to psychological dependence. Medications in this category are often used for pain control, or anesthesia, or appetite suppression.”
Marijuana News Aside: What Would a Reclassification Mean the Industry?
- Increased Research Opportunities: If this recent marijuana news on potential reclassification goes through, it would make it easier for researchers and tech innovators to access and study the plant. Alongside larger clinical trials that would inevitably happen for the plant’s therapeutic potential, there would also be advances in cultivation, processing, and consumption technologies.
- Banking and Financial Integration: Cannabis businesses, including tech startups, have faced challenges accessing traditional banking services due to marijuana’s Schedule I status. The reclassification could open doors to institutional capital and financial services, fueling growth and innovation.
- A New Pot Stocks Bonanza: The cannabis stock frenzy could return. As Bloomberg reported, following the announcement, cannabis stocks experienced a surge. The M.J. PurePlay 100 Index increased by 13 percent on Wednesday, and shares of Columbia Care Inc. went up by 39 percent, while Ayr Wellness Inc. saw a 29 percent rise.
- Development of a National Marketplace: Instead of a patchwork of regulation from one state to the next, if the DEA reclassified cannabis, it would allow for a much more nationally cohesive industry — at least for the medical side of the sector. Presumably, it would be possible to set up production in one state yet serve the entire nation. There would be no more need for multi-state operators to start from the ground up every time a state legalized.
The Road Ahead for Cannabis as a Schedule III Drug
While the HHS’s recommendation is a significant step forward, the final decision rests with the DEA. But the industry is already optimistic if the reaction to today’s news is anything to go by. Most of the industry remains hopeful for a favorable outcome to this recommendation that could usher in a new era of innovation, growth, and access.
In the words of Edward Conklin, executive director of the U.S. Cannabis Council, “Moving cannabis off of Schedule 1 is the right decision and long overdue.” The sentiment is echoed across the industry, with many seeing this as a pivotal moment for the future of cannabis technology.
Others have already suggested this piece of marijuana news; it’s not enough. National Cannabis Industry Association CEO Aaron Smith released in a statement, “The vast majority of Americans live in states with laws that depart from federal law on this issue and where thousands of regulated Main Street businesses are serving the legal cannabis market safely and responsibly. It’s long past time for Congress to truly harmonize federal policy with those states.”
The rescheduling is no doubt a positive move compared with the current standards, but it’s realistically only a few steps towards what is to be a very long road of deregulation and, hopefully, one day, legalization.