What would marijuana rescheduling look like?

The Biden administration will soon propose reclassifying marijuana from the more severe Schedule I to Schedule III.

There are still numerous steps left in the process to move from a Drug Enforcement Administration (DEA) proposal to final policy, but the move would represent a major shift in federal drug policy. It would be the first time the US has acknowledged that there are some potential benefits of marijuana and allowed them to be studied.

Marijuana has been designated a Schedule I drug since 1970, on par with methamphetamine and more serious than fentanyl. This means it has a high potential for abuse and no accepted medical value.

The move could also give President Biden a political boost among young, progressive voters who have supported loosening marijuana policies.

If the proposal is accepted by the White House and eventually finalized, here’s what it could mean:

Easier to search

Taking marijuana off Schedule I would make research much easier.

Schedule III medications are considered to have “moderate to low potential for physical and psychological dependence.” Substances in this category include ketamine, anabolic steroids, and testosterone.

Because Schedule I drugs have no medical value, there is no easy way to conduct clinical research.

Until recently, there was also only one facility licensed to grow marijuana for domestic research, and the federal government has historically been incredibly slow to approve additional applications.

Tax exemptions for industry

The legalization of marijuana has led to a booming industry that is still fighting for recognition at the federal level. Reclassifying marijuana would be an incredibly industry-friendly move.

Under the federal tax code, companies that sell Schedule I or II drugs cannot deduct expenses that other companies can write off, resulting in a substantially higher tax rate for marijuana growers and sellers and making it harder to make a profit.

The industry recorded about $35 billion in sales in 2023. Classifying marijuana as a Schedule III drug would likely mean significant growth for the industry.

Not legalized

Reclassifying cannabis as a Schedule III substance would not make it legal. It would still be a federal crime to possess or sell the drug, unlike most states that allow medical or recreational use for adults.

Paul Armentano, deputy director of the National Organization for the Reform of Marijuana Laws, said marijuana rescheduling will not overcome this growing divide. Nationwide, 38 states have legalized medical marijuana, while 24 have approved it for recreational use.

“[E]Existing state legalization laws – both for adult use and medicinal purposes – will continue to conflict with federal regulations, thus perpetuating the existing divide between state and federal marijuana policies,” Armentano said.