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Making Sense of Schedule III: Debunking Common Misunderstandings About Cannabis Rescheduling

May 28, 2024

In a move touted by President Biden as “monumental,” the Drug Enforcement Administration (DEA) has officially made a formal recommendation to move cannabis from Schedule I to Schedule III of the Controlled Substances Act and submitted a notice of proposed rulemaking in the Federal Register. This is an undeniably significant and historical moment in the cannabis reform movement and policy arena. Among the inevitable celebrations, condemnations, and LinkedIn Thought Leadership was no shortage of confusion and misinformation about what rescheduling actually means. Let’s take a look at some of the common misunderstandings about cannabis rescheduling:

Misunderstanding 1: Cannabis is federally legal now!

Not quite. If by “legal,” we mean everyday citizens and commercial operators can now possess, cultivate, sell, and consume cannabis, then no, cannabis is not federally legal. The Controlled Substances Act is a regulatory framework that determines the parameters of how a substance can be used and distributed based on its purported medical value and propensity for abuse. Moving cannabis from Schedule I to Schedule III will facilitate better research, reduce some cannabis-related criminal penalties, and allow plant-touching businesses to deduct standard business expenses from their federal income taxes. Rescheduling does not, however, fundamentally change the reality that all state cannabis programs still technically violate federal law.

Misunderstanding 2: Rescheduling will decimate state cannabis programs.

Some have raised concerns that cannabis rescheduling would bring about a renewed federal effort to regulate cannabis strictly as a controlled substance, meaning any cannabis product sold must be FDA-approved, prescribed by medical professionals, and manufactured and distributed through the existing pharmaceutical framework. While rescheduling will presumably lead to the development of new pharmaceuticals down the road, it will likely have no bearing on the enforcement priorities of the federal government regarding cannabis. Although, indeed, state-level legalization laws will still violate the Controlled Substances Act even after cannabis becomes a Schedule III substance, there is no reason to believe that the federal government will suddenly start going after state cannabis programs. If anything, rescheduling is emblematic of a new era of federal permissiveness toward cannabis use and commercialization. If the federal government has (generally) tolerated the regulation and sale of cannabis in certain states while cannabis was a Schedule I substance, it is highly unlikely this will change when it becomes a Schedule III substance.

Misunderstanding 3: Cannabis businesses can now engage in interstate commerce.

As mentioned above, rescheduling does not mean cannabis is now legal and state cannabis programs are in compliance with federal law. The federal government has made it clear in the past that, while state cannabis markets are not an enforcement priority of the DOJ, the transportation of cannabis across state lines certainly is. Only Congress has the authority to regulate matters of interstate commerce, and, although disputed among legal scholars, it is very likely that interstate commerce for cannabis will only be allowed with the explicit permission of Congress by way of signed legislation. However, it is entirely possible that some bold states might test the waters in coming years under the calculated risk that, if the federal government hasn’t shut down cannabis programs en masse despite their illegality, maybe interstate commerce won’t be any different. Several states, such as New Jersey and California, have signaled their interest in allowing interstate trade, so perhaps it is only a matter of time.

Misunderstanding 4: Cannabis is now decriminalized.

Rescheduling does not mean that a person can no longer be arrested or incarcerated for cannabis-related offenses. While some criminal penalties regarding Schedule I substances will no longer apply to cannabis or will be reduced, the possession, manufacturing, and distribution of cannabis outside the existing regulatory framework for pharmaceuticals will remain federally illegal. Further, there are numerous criminal penalties within the Controlled Substances Act that are specific to cannabis, such as mandatory minimum sentences. While federal prosecutions for cannabis-related crimes have decreased in recent years, indicating a decline in priority for the federal government, rescheduling does not equate to decriminalization.

Misunderstanding 5: Rescheduling happens immediately.

While it would be nice if this announcement took effect immediately, there is an administrative process required in both the Controlled Substances Act and the Administrative Procedures Act that must take place before cannabis becomes a Schedule III substance. Except for a miracle of good governance or a push for an “October Surprise” from the Biden Administration, the rescheduling process could likely take years, not months. Following the DEA’s notice of proposed rulemaking is a 60-day comment period to allow interested stakeholders to have their suggestions, opinions, and concerns heard. Before rules can be finalized, the DEA must review and consider all submitted public comments, which can take a considerable amount of time. Further, the rescheduling process could take years should a judge decide the rule does not go into effect until all litigation is settled.

So, no, cannabis has not been rescheduled quite just yet.

Further Reading: Three Actionable Ways States Can Prepare for Federal Cannabis Legalization

Summer Fox

Summer Fox

Summer Fox (MPP) is the program manager at Cannabis Public Policy Consulting, where she manages the research team’s contracts, provides operational support to leadership, and lends her expertise as a cannabis policy consultant as needed. Summer received her Master of Public Policy (MPP) and Bachelor of Arts in Social Ecology from the University of California, Irvine. Before joining CPPC, Summer worked as the Manager of Policy at a cannabis technology company and has extensive experience in policy research, communications, government relations, and project management.

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