DEA Reschedules Cannabis, Boosting Industry and Sparking Calls for More Reform

LOS ANGELES- This week, the Drug Enforcement Administration (DEA) made a significant policy shift by reclassifying cannabis under the Controlled Substances Act (CSA), moving it from Schedule I to Schedule III, alongside drugs like Tylenol with codeine and testosterone. This decision, reported by the Associated Press and based on information from unnamed sources, is seen as a historic change in U.S. drug policy.

Economic and Research Implications
The rescheduling is set to revolutionize the cannabis industry and research into its medicinal properties. By easing some of the stringent regulations that have stifled cannabis research, this new classification opens doors for potential medical breakthroughs. For businesses, the change promises relief from the onerous IRS rule 280e, which severely limits tax deductions for cannabis companies, thereby potentially reducing their tax burdens significantly.

Industry Leaders React
Leaders within the cannabis industry have expressed strong support for the DEA’s decision. For example, Colorado’s Governor Jared Polis and executives like Chuck Smith of Colorado Leads and Ali Garawi of Muha Meds highlighted the benefits ranging from enhanced public safety to economic growth and increased community investment due to the easing of tax restrictions.

Bob Groesbeck, co-CEO of Planet 13, emphasized the potential for improved banking access for cannabis companies, which has been a significant hurdle due to the federal restrictions that have kept most banks away from the industry.Despite the positive reception, some activists and organizations are pushing for more comprehensive reforms. Paul Armentano of NORML argues that cannabis should not be regulated under the CSA at all, drawing comparisons with alcohol and tobacco, which are regulated differently despite their risks. Sarah Gersten of the Last Prisoner Project calls for complete descheduling and legalization to correct past injustices and to align federal policy with state laws that have legalized cannabis either for medical or recreational use.

Stock Market Reaction
The stock market reacted positively to the news, with significant gains in cannabis stocks. Companies like Trulieve and Curaleaf saw sharp increases in their share prices, reflecting investor optimism about the future of a less restricted cannabis industry.

The DEA’s decision marks a pivotal moment in cannabis regulation, offering numerous economic and social benefits while also highlighting the ongoing debate over the best path toward federal cannabis policy reform.