By Zeke Miller, Joshua Goodman, Jim Mustian and Lindsay Whitehurst, The Associated Press
WASHINGTON — The U.S. Drug Enforcement Administration will move to reclassify marijuana as a less dangerous drug, The Associated Press has learned, a historic shift to generations of American drug policy that could have wide ripple effects across the country.
The DEA’s proposal, which still must be reviewed by the White House Office of Management and Budget, would recognize the medical uses of cannabis and acknowledge it has less potential for abuse than some of the nation’s most dangerous drugs. However, it would not legalize marijuana outright for recreational use.
The agency’s move, confirmed to the AP on Tuesday by five people familiar with the matter who spoke on the condition of anonymity to discuss the sensitive regulatory review, clears the last significant regulatory hurdle before the agency’s biggest policy change in more than 50 years can take effect.
Once OMB signs off, the DEA will take public comment on the plan to move marijuana from its current classification as a Schedule I drug, alongside heroin and LSD. It moves pot to Schedule III, alongside ketamine and some anabolic steroids, following a recommendation from the federal Health and Human Services Department. After the public comment period and a review by an administrative judge, the agency would eventually publish the final rule.
It comes after President Joe Biden called for a review of federal marijuana law in October 2022 and moved to pardon thousands of Americans convicted federally of simple possession of the drug. He has also called on governors and local leaders to take similar steps to erase marijuana convictions.
“Criminal records for marijuana use and possession have imposed needless barriers to employment, housing, and educational opportunities,” Biden said in December. “Too many lives have been upended because of our failed approach to marijuana. It’s time that we right these wrongs.”
The election year announcement could help Biden, a Democrat, boost flagging support, particularly among younger voters.
Colorado Gov. Jared Polis cheered news of a coming reclassification, saying it would help spare Colorado’s marijuana businesses from a “heavy financial burden” imposed by federal tax rules that make it difficult for the industry to operate.
“I am thrilled by the Biden Administration’s decision to begin the process of finally rescheduling cannabis, following the lead of Colorado and 37 other states that have already legalized it for medical or adult use, correcting decades of outdated federal policy,” Polis said in a statement that described him as a “strong advocate” of federal cannabis reform. “This action is good for Colorado businesses and our economy, it will improve public safety, and will support a more just and equitable system for all.”
Biden and a growing number of lawmakers from both major political parties have been pushing for the DEA decision as marijuana has become increasingly decriminalized and accepted, particularly by younger people. A Gallup poll last fall found 70% of adults support legalization, the highest level yet recorded by the polling firm and more than double the roughly 30% who backed it in 2000.
The DEA didn’t respond to repeated requests for comment.
Schedule III drugs are still controlled substances and subject to rules and regulations, and people who traffic in them without permission could still face federal criminal prosecution.
Voters in Colorado passed the use of medical marijuana in 2000 with Amendment 20, and then recreational use was legalized in Colorado in 2012 with Amendment 64.
Some critics argue the DEA shouldn’t change course on marijuana, saying rescheduling isn’t necessary and could lead to harmful side effects.
Jack Riley, a former deputy administrator of the DEA, said he had concerns about the proposed change because he thinks marijuana remains a possible “gateway drug,” one that may lead to the use of other drugs.
“But in terms of us getting clear to use our resources to combat other major drugs, that’s a positive,” Riley said, noting that fentanyl alone accounts for more than 100,000 deaths in the U.S. a year.
On the other end of the spectrum, others argue marijuana should be treated the way alcohol is.
Last week, 21 Democrats led by Senate Majority Leader Sen. Chuck Schumer of New York sent a letter to DEA Administrator Anne Milgram and Attorney General Merrick Garland arguing marijuana should be dropped from the controlled-substances list and instead regulated like alcohol.
“It is time for the DEA to act,” the lawmakers wrote. “Right now, the Administration has the opportunity to resolve more than 50 years of failed, racially discriminatory marijuana policy.”
Federal drug policy has lagged behind many states in recent years, with 38 having already legalized medical marijuana and 24 legalizing its recreational use.
That’s helped fuel fast growth in the marijuana industry, with an estimated worth of nearly $30 billion. Easing federal regulations could reduce the tax burden that can be 70% or more for businesses, according to industry groups.
Cannabis businesses are currently subject to a section of the tax code known as 280E, which prohibits them from deducting business expenses that are associated with “trafficking” of Schedule I and II controlled substances, including marijuana. Rescheduling cannabis to Schedule III would lift this burden, meaning marijuana businesses could keep more of their revenue.
Shares in cannabis-related businesses surged Tuesday after news of the proposed rescheduling broke, according to Bloomberg News.
“This is a truly historic development in federal cannabis policy that will have significant impacts on the legal marijuana industry in Colorado and throughout the nation,” said Chuck Smith, president of the board of directors for Colorado Leads, an alliance of state cannabis business leaders. “This is by no means the end of the line for federal reform, and we will continue to support efforts to treat it more like alcohol, which is in line with the views of most Colorado voters.”
The rescheduling proposal could make it easier to research marijuana, since it’s very difficult to conduct authorized clinical studies on Schedule I substances. It also could give fresh momentum to the SAFER Banking Act, a long-stalled piece of federal legislation aiming to make it easier for cannabis businesses to access banking services. The current version of the bill, introduced in the U.S. Senate, counts Colorado Sens. Michael Bennet and John Hickenlooper as cosponsors.
The immediate effect of rescheduling on the nation’s criminal justice system would likely be more muted, since federal prosecutions for simple possession have been fairly rare in recent years.
But loosening restrictions could carry a host of unintended consequences in the drug war and beyond.
Critics point out that as a Schedule III drug, marijuana would remain regulated by the DEA. That means the roughly 15,000 cannabis dispensaries in the U.S. would have to register with the DEA like regular pharmacies and fulfill strict reporting requirements, something that they are loath to do and that the DEA is ill equipped to handle
Then there’s the United States’ international treaty obligations, chief among them the 1961 Single Convention on Narcotic Drugs, which requires the criminalization of cannabis. In 2016, during the Obama administration, the DEA cited the U.S.’ international obligations and the findings of a federal court of appeals in Washington in denying a similar request to reschedule marijuana.