[et_pb_section fb_built=”1″ _builder_version=”4.27.4″ _module_preset=”default” global_colors_info=”{}”][et_pb_row _builder_version=”4.27.4″ _module_preset=”default” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.27.4″ _module_preset=”default” global_colors_info=”{}”][et_pb_blurb title=”Rescheduling??? – Thoughts???\u00a0 The DEA issued a final order on Apr. 22nd, moving certain marijuana classifications from Schedule I to Schedule III of the Controlled Substances Act (CSA). Interestingly, the legal milestone here isn\u2019t the usual state medical\/recreational rulemaking process, it\u2019s the United States\u2019 treaty obligations under the United Nations Single Convention on Narcotic Drugs (1961). If you\u2019re a cannabis operator, medical professional, researcher, or investor, this one matters.\u00a0
\nWhat the Final Order Actually Does
\nThe key thing to understanding is this order doesn\u2019t reschedule all marijuana. It only moves specific marijuana categories into Schedule III:
\nFDA-approved drug products containing marijuana (e.g., products containing naturally derived \u03949-THC from the cannabis plant);
\nMarijuana extracts contained in FDA-approved products or subject to a state medical marijuana license; and
\nMarijuana and marijuana extracts are subject to a qualifying state-issued medical marijuana license. This classification will have the greatest effect on the industry.
\nEverything else, unlicensed bulk marijuana, anything not in an FDA-approved product, synthetic THC and all recreational marijuana, remains in Schedule I. These marijuana categories remain illegal under federal law!
\nKey Consequences: What Changes Now
\nSection 280E Tax Relief for State Licensees: This is probably the most immediately impactful piece for licensed operators. The order makes clear that state medical marijuana licensees are no longer constrained with the \u00a7 280E deduction ban, that provision only applies to Schedule I and II substances. There\u2019s no retroactive effect from this order itself, though the Acting AG is encouraging the Treasury Secretary to consider giving businesses some retroactive relief. This isn\u2019t a formal tax ruling, so consult with your Clark Hill tax attorney about what it means for your specific situation and past years.
\nNew DEA Registration Pathway: Good news! If you hold a state medical marijuana license, you can now apply for a federal DEA Schedule III registration through a new expedited process. Just submit proof of your state license. If you file within 60 days of publication, DEA has to process your application within six months, and you can keep operating under your state license while you wait. Give us a call to get ahead of this.
\nImport\/Export Permit Requirement: The order also amends 21 CFR Part 1312 to add an import\/export permit requirement for the Schedule III marijuana. If you\u2019re moving covered marijuana products across borders, you\u2019ll need a DEA permit. A Clark Hill international trade attorney can walk you through what that looks like in practice.
\nReduced Criminal Penalties (Partial): Some penalties tied to scheduling will go down, that is a real but limited win. The mandatory minimums under 21 U.S.C. \u00a7 841, which are based on drug quantity, aren\u2019t touched by this change. Those stay exactly where they are.
\nRecreational Marijuana Remains Federally Illegal: The order does not affect recreational marijuana in any state. We want to be clear on this: if you\u2019re in the recreational space, nothing about your federal exposure changes. Manufacturing, distribution, and possession of recreational marijuana is still a federal crime, still carrying Schedule I penalties.
\nState-Law Compliance Accommodations: One thing the order gets right is trying to cut down on duplicative compliance headaches. State-issued medical marijuana certifications are enough to authorize dispensing. For the most part, you can lean on your state-law requirements for labeling, packaging, disposal, and security instead of layering on separate federal standards; albeit this may be likely to change as federal regulations evolve.<\/p>\n
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