US President Donald Trump on Thursday signed an executive order to speed up the rescheduling of marijuana from a Schedule I substance to the less severe Schedule III, stating that the move was intended to boost research.
While the previous Joe Biden administration had begun the reclassification process, it had been bogged down by administrative delays and legal hurdles. Trump, months after taking office for a second term, had agreed to finish the job.
What does the executive order do?
Trump's latest executive order essentially directs US Attorney General Pam Bondi to speed up the process of reclassification.
"The Federal Government’s long delay in recognizing the medical use of marijuana does not serve the Americans who report health benefits from the medical use of marijuana to ease chronic pain and other various medically recognized ailments...," read Trump's order.
"It is the policy of my Administration to increase medical marijuana and CBD research to better inform patients and doctors," it added.
Currently, marijuana is classified alongside heroin and and LSD as Schedule I drugs, which are defined by the Drug Enforcement Administration (DEA) as having "no currently accepted medical use and a high potential for abuse."
In comparison, Schedule III drugs such as Tylenol with codeine, ketamine etc. are described by the DEA as having "a moderate to low potential for physical and psychological dependence."
Does the executive order legalize marijuana?
No, Trump's executive order does not legalize marijuana under federal law, a fact stressed upon by the President.
“I want to emphasize that the order I am about to sign is not the legalization or it doesn’t legalize marijuana in any way, shape or form, and in no way sanctions its use as a recreational drug,” Trump was quoted as saying in a press briefing from the Oval Office.
Forty US states, including the capital Washington, D.C., have legalized the use of medical marijuana, while more than half of them—24—have legalized recreational use as well.
As things stand, medical or recreational marijuana is still considered illegal under the Controlled Substances Act and companies seeking to legally produce and distribute marijuana and associated products need approval from the US Food and Drug Administration (FDA).
The order will not change this, reported TIME, adding that penalties for crimes related to recreational marijuana use would not be impacted either.
Does the executive order affect the industry?
While the executive order directly doesn't impact businesses yet, the reclassification of marijuana, once completed, would.
Currently, cannabis businesses are subjected to IRS Code 280E, which prevents them from deducting standard business expenses (rent, payroll, marketing) because they "traffic in a Schedule I substance."
Reclassification, would, in effect, treat them like normal corporations for tax purposes, likely helping the industry save billions in exorbitant taxes—a reported estimate by Viridian Capital Advisors suggests that the top 12 cannabis companies alone would save $800 million annually in taxes.
Because companies would no longer have to pay high taxes, prices for consumers could also drop at the counter if firms pass the benefits on.
In addition, it would become much easier for scientists to study cannabis. This could lead to better, FDA-approved cannabis-derived medicines and potentially insurance coverage for medical marijuana prescriptions in the future.
