By Sam Reisman ·  Listen to article

Law360 (August 30, 2023, 4:36 PM EDT) — U.S. health officials have made a new recommendation for potentially changing marijuana’s status under federal drug policy, sending their review to the Drug Enforcement Administration to make a final determination.

In a Tuesday letter, the U.S. Department of Health and Human Services said it had completed its analysis of the science regarding marijuana’s potential risks and benefits and made its recommendation to the DEA about whether it was appropriate to loosen restrictions on the drug.

Both the HHS and DEA confirmed the existence of the letter on Wednesday, while declining to respond to queries about the letter’s substance. Bloomberg News, which first reported the letter’s existence on Wednesday, said that HHS endorsed moving marijuana to Schedule III, down from its current status as a Schedule I substance — the most restrictive tier under the Controlled Substances Act.

The letter comes some 11 months after President Joe Biden ordered federal officials to reevaluate marijuana’s designation.

“Following the data and science, HHS has expeditiously responded to President Biden’s directive to HHS Secretary [Xavier] Becerra and provided its scheduling recommendation for marijuana to the DEA on August 29, 2023,” Ilse Zuniga, an HHS spokesperson, told Law360.

Katherine Pfaff, a spokesperson for the DEA, told Law360: “We can confirm DEA received a letter from the Department of Health and Human Services providing its findings and recommendation on marijuana scheduling, pursuant to President Biden’s request for a review.”

The DEA statement continued: “As part of this process, HHS conducted a scientific and medical evaluation for consideration by DEA. DEA has the final authority to schedule or reschedule a drug under the Controlled Substances Act. DEA will now initiate its review.”

The Schedule I designation, which has applied to cannabis for more than five decades and endured multiple previous reviews, means marijuana has no recognized medical value and has a high potential for abuse as a matter of federal policy.

Despite marijuana’s federal illegality, it has been legalized for adult nonmedical use in 23 states, plus the District of Columbia, and for medical use in another 15 states.

Legalization advocates were quick to note on Wednesday that reassigning cannabis to Schedule III would not close the gap between federal and state marijuana policy.

“Moving cannabis to schedule III could have some limited benefit but does nothing to align federal law with the 38 U.S. states which have already effectively regulated cannabis for medical or adult use,” said Aaron Smith, CEO of the National Cannabis Industry Association.

“The only way to fully resolve the myriad of issues stemming from the federal conflict with state law is to remove cannabis from the Controlled Substances Act and regulate the product in a manner similar to alcohol,” Smith continued.

However, a Schedule III reassignment would provide cannabis operators a reprieve from a punitive federal tax policy that forbids entities that sell Schedule I or II substance from taking ordinary business deductions.

Edward Conklin, executive director of the U.S. Cannabis Council, an omnibus group that includes many of the largest marijuana industry players, said that reports of a Schedule III recommendation were a welcome sign that federal cannabis policy was moving in the right direction.

“We believe that rescheduling to Schedule III will mark the most significant federal cannabis reform in modern history,” Conklin said. “President Biden is effectively declaring an end to Nixon’s failed war on cannabis and placing the nation on a trajectory to end prohibition.”

The statement continued: “The US Cannabis Council is committed to full legalization of cannabis. We believe that rescheduling is a historic step toward that ultimate goal.”

Final determination of cannabis’ schedule status will rest with the DEA and go through the agency’s internal rulemaking and deliberation process. There is no timetable for the agency to render its decision.

The last time federal agencies tasked with enforcing drug policy were asked to review marijuana’s Schedule I status, they determined in 2016 the designation was still appropriate, following a review that stretched over six years.