WASHINGTON, D.C. – President Joe Biden yesterday announced that the Department of Justice is reclassifying cannabis from its Schedule I status in the Controlled Substances Act. The administration is poised to initiate the rulemaking process that will open a 60-day public comment period before the change is made official.
The announcement came shortly after the National Cannabis Industry Association (NCIA) concluded its 12th Annual Cannabis Industry Lobby Days in Washington, D.C., the largest advocacy event for the legal industry.
During the two-day event, more than 100 cannabis business professionals held citizen lobbying meetings with congressional offices to discuss the positive economic and social impact that regulating cannabis markets has already had on states with modern marijuana laws.
Participants advocated for federal reforms that need to be enacted after rescheduling, such as legislation that would allow banks to more easily do business with the legal cannabis industry and broader reforms that would regulate cannabis like alcohol.
While hailed as an incremental win for the legal cannabis industry, rescheduling would not legalize marijuana or harmonize federal law with the laws that allow for either medical or adult-use cannabis sales in 38 states nor does it right the wrongs of decades of misguided prohibition policies, according to the NCIA.
"On behalf of thousands of legal businesses operating across the country, we commend President Biden for taking this important first step toward a more rational marijuana policy. Now it’s time for Congress to enact legislation that would protect our industry, uphold public safety, and advance the will of the voters who overwhelmingly support making cannabis legal for adults," said Aaron Smith, NCIA CEO and co-founder, in a statement. "Rescheduling alone does not fix our nation's state and federal cannabis policy conflict. Only Congress can enact the legislation needed to fully respect the states and advance the will of the vast majority of voters who support legal cannabis."
Reclassifying marijuana from Schedule I to Schedule III in the Controlled Substances Act would provide tax parity for the cannabis industry by ensuring legal businesses would no longer be subject to an arcane provision of the U.S. tax code, Section 280E, which prohibits deductions associated with "drug trafficking."
NCIA will be submitting public comments during the rulemaking period on behalf of the hundreds of small businesses it represents in the legal cannabis industry. In addition to calling on legislation that would carve out a new regulatory pathway for cannabis products, the association supports legislation that would provide retroactive relief for lawful businesses with tax liability associated with Section 280E.
