The upcoming decision on the Biden administration’s proposal to reclassify cannabis at a federal level has been effectively delayed until after the election in November.
The Drug Enforcement Administration (DEA) has scheduled a hearing on it for 2nd December meaning there is no chance of it happening before then and it could potentially be kicked into the long grass depending on November’s result. Biden had ordered a review back in October 2022, at the same time as he pardoned thousands of people with federal convictions for simple possession.
Reclassification had been supported by the Department of Health and Human Services and the US Food and Drug Administration and in April of this year the DEA said it would approve the attempt to reclassify.
DEA sought public comments on the proposal
After their announcement in April 2024, the DEA held a 60-day public comment period starting on May 21st. By July 22nd, 43,000 comments had been submitted which is 10 times more than the average number for a similar comment period.
According to data firm Headset, 92.45% of the comments supported federal reclassification of cannabis with 62% of them stating that they’d prefer it to be descheduled completely. Several comments had asked the DEA to schedule a hearing on the issue.
This week the DEA administrator has signed a notice that a hearing has been scheduled for 2nd December. This means that any decision will now be delayed until after the next president takes over on 25th January 2025.
How has the marijuana industry reacted?
It’s obviously been disappointing for most in the industry as reclassification to Schedule III would have massive impacts on tax liabilities for related companies. Currently they cannot take standard tax deductions under IRS regulations.
Lauren Fontein,, the founder of The Artist Tree dispensary in California stated: “The decision to hold a hearing is understandable but frustrating. It means that cannabis businesses may be subject to one additional year of taxation under 280E, which makes a tremendous difference to the bottom line for cannabis companies, many of which are already struggling financially given the overall industry conditions. The delay also makes rescheduling less certain since a new presidential administration could possibly reverse course and oppose rescheduling, though it appears there’s generally bipartisan support at the moment.”
George Sadler, CEO of Gelato Canna Co. said: “government has always screwed over the cannabis industry so I can’t say this comes as a surprise. Waiting until after the presidential election is just another example of kicking the can down the road and making those of us working to make cannabis a safer, better industry sit in another holding pattern for no reason. The people have spoken. They want cannabis legalized. This is more of the same: delay, over regulate, over tax.”
Neatleaf CEO Elmar Mair stated: “We believe it’s unfortunate that the DEA has chosen to delay the decision on rescheduling cannabis until after the election. The societal, economic, and legal impacts of this decision are too significant to be postponed. “The majority of the country overwhelmingly agrees that cannabis should be rescheduled, and delaying this decision could hinder progress on crucial issues like releasing individuals wrongfully imprisoned or potentially affecting several others being prosecuted under outdated laws. It’s vital that this matter receives the timely attention it deserves, benefiting countless individuals, communities, and businesses nationwide.”
Envirocann CEO Ian Rice struck a more conciliatory tone saying the “DEA’s decision to hold a hearing on rescheduling cannabis to Schedule III demonstrates the complexity and ongoing challenges of federal cannabis reform. While this step adds uncertainty, it also provides an opportunity for a more thorough examination of the scientific and public health implications.”
Source: Forbes
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