Congressional Researchers Detail Limitations Of Marijuana Rescheduling For State Markets And Criminal Justice Reform

Congressional Researchers Detail Limitations Of Marijuana Rescheduling For State Markets And Criminal Justice Reform

As the Drug Enforcement Administration (DEA) weighs a marijuana rescheduling recommendation from health officials, congressional researchers are laying out the limitations of the policy change— emphasizing that state cannabis markets would continue to run afoul of federal law, and existing criminal penalties for certain marijuana-related activity would remain in force.

In a report published on Tuesday, the Congressional Research Service (CRS) explained the “legal consequences” of moving cannabis from Schedule I to Schedule III of the Controlled Substances Act (CSA), as the U.S. Department of Health and Human Services (HHS) has advised DEA to do following its comprehensive scientific review.

“Moving marijuana from Schedule I to Schedule III, without other legal changes, would not bring the state-legal medical or recreational marijuana industry into compliance with federal controlled substances law,” CRS said.

“With respect to medical marijuana, a key difference between placement in Schedule I and Schedule III is that substances in Schedule III have an accepted medical use and may lawfully be dispensed by prescription, while Substances in Schedule I cannot,” it continued. However, in order for marijuana to be legally prescribed, the Food and Drug Administration (FDA) would need to approve its use, and plant medicines do not typically go through that approval process.

“Moreover, if one or more marijuana products obtained FDA approval, manufacturers and distributors would need to register with DEA and comply with regulatory requirements that apply to Schedule III substances in order to handle those products. Users of medical marijuana would need to obtain valid prescriptions for the substance from medical providers, subject to federal legal requirements that differ from existing state regulatory requirements for medical marijuana.”

Importantly, the report explains that only certain criminal penalties “depend on the schedule in which a substance is classified,” while others are specific to marijuana and would not automatically change with a Schedule III reclassification.

“If marijuana were moved to Schedule III, applicable penalties for some offenses would be reduced,” it says. “However, CSA penalties that apply to activities involving marijuana specifically, such as the quantity-based mandatory minimum sentences discussed above, would not change as a result of rescheduling.”

CRS did point out, however, that the scheduling change would “allow marijuana businesses to deduct business expenses on federal tax filings” that they’ve been barred from under an Internal Revenue Service (IRS) code known as 280E.

“Other collateral legal consequences would continue to attach to unauthorized marijuana-related activities,” the report says.

Regardless of what scheduling decision is ultimately made, CRS said the Justice Department would continue to be blocked from interfering in state medical cannabis programs under an appropriations rider that Congress has annually renewed each year since 2014.

“Thus, so long as the current rider remains in effect, participants in the state-legal medical marijuana industry who comply with state law would be shielded from federal prosecution,” the report says. “If the rider were to lapse or be repealed, these persons would again be subject to prosecution at the discretion of DOJ.”

The researchers also offered considerations for Congress, stating that if lawmakers want to change the legal status of marijuana “it has broad authority to do so before or after DEA makes any scheduling decision.” It listed a number of existing legislative proposals that “would relax federal regulation of marijuana,” while noting that “Congress could also seek to impose more stringent controls.”

“Rescheduling or descheduling marijuana under the CSA could raise additional legal questions,” it continues. “For instance, FDA regulates certain cannabis products under the Federal Food, Drug, and Cosmetic Act, so Congress might also consider whether to alter that regulatory regime or create some alternative regulatory framework. In addition, relaxing the CSA’s restrictions on marijuana could implicate the United States’ international treaty obligations.”

In September, CRS released a related analysis that focused on how rescheduling would have “broad implications for federal policy” in areas such as taxes, housing, immigration, military eligibility, gun rights and more. Researchers also assessed that it is “likely” DEA will abide by the HHS recommendation, based on past precedent.

HHS finally released the full recommendation and scientific findings it shared with DEA last week, and HHS Secretary Xavier Becerra said his agency has “communicated” their “position” on marijuana rescheduling to DEA and has continued to offer additional information to assist with the final determination.

As CRS said in its new report, DEA has steadfastly maintained it has “final authority” over the matter and can make any scheduling determination that it sees fit.

“DEA has the final authority to schedule, reschedule, or deschedule a drug under the Controlled Substances Act, after considering the relevant statutory and regulatory criteria and HHS’s scientific and medical evaluation,” the agency said in a letter to lawmakers last month. “DEA is now conducting its review.”

The statement came in response to an earlier letter from 31 bipartisan lawmakers, led by Rep. Earl Blumenauer (D-OR), that urged the agency to consider the “merits” of legalization as it carried out its review.

DEA has faced pressure on both sides of the marijuana policy debate over recent months, with advocates pressing for a Schedule III decision, or complete descheduling, and prohibitionists urging the agency to keep cannabis in Schedule I.

Prior to the HHS documents’ release, a coalition of 12 Democratic state attorneys general implored DEA to move forward with federal marijuana rescheduling, calling the policy change a “public safety imperative.”

In another letter last month, 29 former U.S. attorneys called on the Biden administration to leave cannabis in Schedule I.

Last month, the governors of six U.S. states—Colorado, Illinois, New York, New Jersey, Maryland and Louisiana—sent a letter to Biden calling on the administration to reschedule marijuana by the end of last year.

Meanwhile, six former DEA heads and five former White House drug czars sent a letter to the attorney general and current DEA administrator voicing opposition to the top federal health agency’s recommendation to reschedule marijuana. They also made a questionable claim about the relationship between drug schedules and criminal penalties in a way that could exaggerate the potential impact of the incremental reform.

Signatories include DEA and Office of National Drug Control Policy heads under multiple administrations led by presidents of both major parties.

In October, Advocates and lawmakers who support cannabis reform marked the one-year anniversary of Biden’s mass marijuana pardon and scheduling directive this month by calling on him to do more—including by expanding the scope of relief that his pardon had and by expressly supporting federal legalization.

Two GOP senators, including the lead Republican sponsor of a marijuana banking bill that cleared a key committee in September, also filed legislation late last year to prevent federal agencies from rescheduling cannabis without tacit approval from Congress.

A coalition of 14 Republican congressional lawmakers, meanwhile, has urged DEA to “reject” the top federal health agency’s recommendation to reschedule marijuana and instead keep it in the most restrictive category under the CSA.

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