From Schedule I to Schedule III: The Future of Marijuana in the U.S.

by Haley Mills · August 31, 2023

Want a better understanding of the potential scheduling changes for marijuana in the United States? Click here for our breakdown of this momentous update to cannabis scheduling.

the future of marijuana scheduling in the u s

On August 30, 2023, the marijuana industry and its advocates were taken by storm. The U.S. Department of Health and Human Services (HHS) declared its intention to propose the transition of marijuana from a Schedule I to a Schedule III substance, unveiled by Riley Griffin via Bloomberg. HHS Secretary Xavier Becerra had hinted earlier in the year about this impending change, igniting discussions on the possibility of a Federal Shift in Marijuana’s Legal Stance. This revelation by Secretary Becerra was a direct consequence of Joe Biden’s directive from October 2022, urging a reevaluation of marijuana’s placement as a Schedule I drug.

So, What’s Next for Marijuana’s Rescheduling?

Although HHS’s recommendation to the Drug Enforcement Administration (DEA) carries significant weight, it’s not the final word. The DEA, an arm of the Department of Justice and under the purview of the U.S. Attorney General, holds the ultimate authority in this decision-making process.

Per the Controlled Substances Act (CSA), the Attorney General can reclassify substances across different Schedules. The transition hinges on the Attorney General’s determination that the drug aligns with the defined criteria of the proposed Schedule, as per 21 USC 811(a)(1)(B).

The present situation sees HHS tasking the U.S. Food and Drug Administration (FDA) with assessing the drug and subsequently presenting its findings to the Attorney General. The DEA, while equipped to conduct its own investigations, has acknowledged receipt of the HHS recommendation.

Decoding Schedule III Classification

Currently, marijuana, along with delta-9 THC, finds itself under Schedule I of the CSA, the most stringent category. Schedule I drugs have no medical benefits and a high abuse potential. In contrast, Schedule III substances have recognized medical applications, moderate to low abuse potential, and minor risk of psychological addiction. Familiar Schedule III drugs include Vicodin, Buprenorphine, and some forms of Barbiturates. Obtaining a Schedule III drug necessitates a prescription, limited to five refills within six months of issuance.

What Would the Transition Imply for Marijuana?

A shift to Schedule III promises significant changes for marijuana enterprises, especially concerning taxation. The transition would exempt marijuana ventures from Internal Revenue Code 280E (IRC 280E). Currently, IRC 280E disallows businesses dealing with Schedule II or III drugs from claiming deductions apart from the cost of goods sold, thereby imposing a heavier tax liability on these entities. For instance, a cannabis cultivator faces steeper taxes than a lettuce grower.

Moreover, the change would make it markedly simpler to research marijuana in the U.S. Given its Schedule I label, marijuana’s study, even under medical supervision, is fraught with restrictions. However, this anticipated transition promises more flexible research regulations, ushering in a new era of understanding marijuana’s therapeutic potential and its interactions with human physiology. This can lead to the introduction of newer prescription-based marijuana-derived medicines.

Yet, this reclassification wouldn’t render state-level marijuana programs legal. Even if the FDA endorses certain marijuana-derived products, it doesn’t imply blanket approval for all marijuana forms. So, while an oral cannabis-derived medication might get the green light, it wouldn’t necessarily pave the way for the legality of gummies or smokable forms. State-regulated marijuana programs may still operate in a gray area, albeit with lesser legal consequences than their Schedule I counterparts.

As for the marijuana industry’s banking interactions, the future remains uncertain. While the risks associated with dealing with the marijuana industry might decrease, complete eradication of these risks remains unlikely. The banking sector’s approach to this potential change remains to be seen.

Concluding Thoughts

Over the past few decades, the perception of marijuana has evolved considerably. From California pioneering medical marijuana legalization in 1996 to Washington and Colorado leading the recreational charge in 2012, state-level stances have often been at odds with federal views. Yet, the wheels of federal reconsideration seem to be turning, marking a significant moment in U.S. drug policy chronicles.

This momentous day etches its mark in the archives of American narcotics legislation, and the team at Leafy DOC commits to keeping you informed on its progress.

Last Updated: January 30, 2024

Get Your Medical Card

Connect with a licensed physician online in minutes

medical marijuana card example on leafy doc

Like This Article?

Share with your friends

Table of Contents

Keep Reading