House Appropriations Committee Blocks Cannabis Rescheduling Efforts

LOS ANGELES- The House Appropriations Committee approved legislation on Tuesday that impedes the Biden administration’s initiative to reschedule cannabis and relax federal restrictions. The Republican-led panel endorsed an amendment to a funding bill that prevents the Department of Justice from advancing the rescheduling plan, which is currently in a rulemaking process to move cannabis from Schedule I to the less restrictive Schedule III under the federal Controlled Substances Act (CSA).

In October 2022, President Joseph Biden called for a review of the federal prohibition on cannabis. The U.S. Department of Health and Human Services (HHS) recommended rescheduling cannabis in August 2023, following a review that supported the change to Schedule III based on scientific evidence of its medicinal use. In January, the HHS concluded that cannabis meets the criteria for less stringent classification under federal drug laws, and the Drug Enforcement Administration (DEA) expressed its intent to support the rescheduling. The proposed rule is now in a 60-day public comment period.

However, the House Appropriations Committee’s recent approval of a Commerce, Justice, Science, and Related Agencies (CJS) funding bill includes an amendment that blocks the Department of Justice from using federal funds to reschedule or deschedule cannabis under the CSA. An amendment by Democratic Rep. Rosa DeLauro to remove this provision was defeated by a vote of 20-30.

The attempt to prevent cannabis reclassification poses a challenge for the regulated cannabis industry. If successful, rescheduling would enable cannabis companies to take standard business deductions under the tax code, which are currently denied to those selling Schedule I substances. David Craig, chief marketing officer of Illicit Gardens, described the committee’s decision as “a disappointing move,” stating that it hinders vital research and maintains an outdated approach to a substance with proven benefits.

In addition to blocking rescheduling, the committee rejected an amendment from California Democratic Rep. Barbara Lee, co-chair of the Congressional Cannabis Caucus. Lee’s amendment sought to prohibit the Justice Department from interfering in state or tribal regulated cannabis programs, including those legalizing recreational use. Rep. David Joyce, the only GOP member of the committee to support Lee’s amendment, argued that states should regulate cannabis as they see fit to close the loophole that allows illicit operators to thrive and jeopardize public safety.

The funding bill retains a decade-old provision preventing the Department of Justice from interfering in state-legal medical cannabis programs. However, a new provision allows federal law enforcement to enforce a federal law increasing penalties for distributing cannabis near schools, colleges, public housing, or playgrounds.