(Source: MIRS.news, Published 05/03/2024) U.S. Attorney General Merrick Garland put forth a proposal to reclassify cannabis from a schedule I drug, along with heroin, to a schedule III drug, with some codeine combinations, which could change some rules in the Michigan industry.
Department of Justice Director of Public Affairs Xochitil Hinojosa said the proposal would need to be published by the federal register, which would then initiate the formal rule-making process. The Drug Enforcement Administration and DOJ had no further comment about a timeframe for the process or how long it could take.
Cannabis Regulatory Agency Director Brian Hanna said rescheduling would make research easier and make it easier for consumers to access.
He said businesses would also have access to more banking and the tax burden would be reduced.
“We will continue to monitor the situation and look forward to our part to keep Michigan as a national leader in the cannabis industry,” Hanna said.
Michigan Cannabis Industry Association Executive Director Robin Schneider said the rule promulgation process could take three years or longer and the Michigan industry would be participating in that process.
“This is likely one of the most overdue polices that we’ve seen change and certainly the biggest cannabis reform that we’ve seen, federally, ever,” Schneider said.
She said the industry believed it should never have been designated a Schedule I drug, which are classified as drugs with no currently accepted medical use and high potential for abuse. It is the highest classification of controlled substance, and includes drugs like LSD, Ecstasy, Quaaludes, PCP, and peyote.
The DEA defines Schedule III drugs as having a moderate-to-low potential for physical or psychological dependence and lower abuse potential. The group of drugs includes ketamine, anabolic steroids, and testosterone.
“I believe the biggest impact that this will have on Michigan’s cannabis industry is the removal of the 280e tax penalty,” she said.
The 280e tax penalty means that most businesses pay a tax rate of about 81% and this would put the tax in line with other pharmaceutical companies.
Schneider said this reclassification could end up leading to the birth of a federal medical cannabis program.
“We don’t know what that’s going to look like yet, but it’ll be a good thing because individuals who have healthcare needs may be able to have their cannabis approved by doctors used in hospitals, hospice, and insurance coverage may become a possibility,” she said.
She said while this was a big step in the United States, any type of full legalization on the federal level could still be a decade away.
“Support for cannabis, legalization, cannabis as medicine, and certainly ending mass incarceration of our citizens, all of those issues are resonating with average citizens and voters right now,” she said.
She said it takes longer for the federal government to catch up to the sentiment of the citizens and progress was incremental.
“I think this is a historic decision that’s long overdue, and I think it’s a sign of where individuals stand on this issue,” she said.
