Will Reclassification Happen?
A U.S. House of Representatives committee approved a budget bill that would obstruct attempts to reschedule cannabis. The bill contains a provision that forbids the Department of Justice (DOJ) from using the $78.2 million in funding for the DOJ and other agencies to reclassify marijuana from Schedule I under the Controlled Substances Act.
It’s still unclear what this bill will actually mean in practice. Given that the Senate, which is controlled by a different political party, is unlikely to approve a budget that obstructs a major administrative objective, it is probable that the law will have more symbolic significance than real influence. Furthermore, there is uncertainty as to whether this parliamentary move can stop the rescheduling process at this time because it has already progressed far.
In October of 2022, a request to reevaluate what was considered an ineffective regulation prompted the reconsideration of marijuana’s federal classification. As a result, last August, health authorities recommended moving marijuana to Schedule III after concluding that it has medicinal potential. The suggestion was based on state-legal medical marijuana initiatives that are currently in place. Subsequently, in May, the Department of Justice (DOJ) suggested a reclassification that would enable cannabis enterprises to claim regular business deductions—which are presently forbidden under Section 280E of the Internal Revenue Code—thus reducing their tax burden.
The public feedback period for the marijuana rescheduling plan is open until July 21. During this stage, the general public can offer input prior to any definitive choices being made. During this procedure, administrative hearings as well as possible judicial challenges are anticipated. This autumn is the earliest that a final rescheduling rule may be proposed, possibly ahead of any congressional action that might prevent the rescheduling.
The movement for rescheduling is still gaining traction in spite of these legislative initiatives. In deciding the final result, the public comment period and the ensuing administrative procedures will be very important. In the upcoming months, it will be crucial to observe how legislative measures and administrative processes interact.