Colorado Cannabis industry sees positives and drawbacks to Marijuana reclassification
Marijuana is currently classified as a Schedule I drug, alongside heroin and LSD.
DENVER — The US Department of Health and Human Services (HHS) on Thursday recommended that the Drug Enforcement Administration (DEA) move marijuana from a Schedule I to Schedule III controlled substance.
The recommendation comes after President Joe Biden requested a review in October 2022 as he pardoned thousands of Americans convicted of "simple possession" of marijuana under federal law.
Rescheduling marijuana would reduce or potentially eliminate criminal penalties for possession. Marijuana is currently classified as a Schedule I drug, alongside heroin and LSD.
According to the DEA, Schedule I drugs "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."
Schedule III drugs "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." They currently include ketamine and some anabolic steroids.
Rescheduling marijuana could have a major impact on Colorado's marijuana industry, according to experts.
Truman Bradley with the Marijuana Industry Group, which represents businesses across Colorado, said the move doesn’t go far enough.
“We would like to see the DEA make a recommendation of descheduling entirely, similar to alcohol," Bradley said. "It's quite clear that marijuana has more medical benefits."
Bradley said reclassification would possibly give marijuana businesses access to banking and bring positive tax impacts.
“It's impossible to overstate the harsh impact of IRS Code 280E, which doesn't allow compliant marijuana businesses from taking normal business deductions. We're not talking about a tax break for marijuana businesses. We're just talking about fair treatment across the board just like any other industry,” Bradley said.
If marijuana were to move from a Schedule I drug to Schedule III, it would be in the same category as Tylenol with codeine. Theoretically, in the future, it could be sold at pharmacies.
Powerful pharmaceutical companies and corporations entering the industry make small business owners like Hermine Ngnomire, president of Truve Health, nervous.
“Do we get purchased by let's say, a pharmaceutical company? Are we kind of left out of that space,” Ngnomire said.
Ngnomire is in the marijuana and hemp wellness business. She said this recommendation complicates things.
“The market could dry up, and it could be a situation of why would you get hemp if you could get marijuana at a higher dosage?” she said.
Cannabis stocks are surging with this new development. While Wall Street and corporations are excited to jump in, there are concerns about protecting small businesses and social equity.
“The thinking that it will be easier for people of color to get a loan, it's actually going to potentially be harder to compete in that space,” Ngnomire said.