Justice Dept plans to reschedule marijuana as a lower-risk drug

By Alicia Wallace, Katherine Dillinger, Kevin Liptak, Jeff Zeleny and Kayla Tausche, CNN

(CNN) — The Biden administration moved Tuesday to reclassify marijuana as a lower-risk substance, a person familiar with the plans told CNN, a historic move that acknowledges the medical benefits of the long-criminalized drug and carries broad implications for cannabis-related research and the industry at large.

The US Department of Justice recommended that marijuana be rescheduled as a Schedule III controlled substance, a classification shared by prescription drugs such as ketamine and Tylenol with codeine.

“Today, [Attorney General Merrick Garland] circulated a proposal to reclassify marijuana from Schedule I to Schedule III,” Xochitl Hinojosa, the DOJ’s director of public affairs, said in a statement. “Once published by the Federal Register, it will initiate a formal rulemaking process as prescribed by Congress in the Controlled Substances Act.”

The formal rulemaking process is lengthy, typically includes a public comment period and could take months to complete.

The rescheduling recommendation, which was first reported Tuesday by the Associated Press, was hailed by lawmakers on both sides of the aisle, including Republican Rep. Nancy Mace of South Carolina, who touted it on X as “major news for businesses, tax deductions & research barriers.”

Democrat Rep. Earl Blumenauer of Oregon said in a statement that rescheduling is “one step closer to ending the failed war on drugs.”

An accepted medical use

For more than 50 years, marijuana has been categorized as a Schedule I substance — drugs like heroin, bath salts and ecstasy that are considered to have no accepted medical use and a high potential for abuse — and subject to the strictest of restrictions.

The expected recommendation comes after the US Health and Human Services department, following a thorough US Food and Drug Administration review at the direction of President Joe Biden, who in 2022 sent a letter to the Justice Department supporting the reclassification to Schedule III.

Last fall, members of the FDA’s Controlled Substance Staff wrote in the documents that the agency recommended rescheduling marijuana because it meets three criteria: a lower potential for abuse than other substances on Schedules I and II; a currently accepted medical use in treatment in the US; and a risk of low or moderate physical dependence in people who abuse it. The National Institute on Drug Abuse concurred with the recommendation.

Although marijuana has a “high prevalence of non-medical use” in the US, it doesn’t seem to elicit serious outcomes, compared with drugs such as heroin, oxycodone and cocaine, the researchers said. “This is especially notable given the availability” of products that contain very high levels of Delta 9 tetrahydrocannabinol (THC), the primary active compound in cannabis.

A booming industry

Since the first adult-use cannabis sale took place in 2014 in Colorado, cannabis has blossomed into a multibillion-dollar industry that has attracted the attention of multinational companies across sectors such as alcohol, agriculture, pharmaceutical and tobacco.

Cannabis, and specifically how it is viewed by the public and politicians, has undergone a sea-change during the past decade.

Currently, 24 states, two territories and DC have legalized cannabis for adult recreational use, and 38 states allow medical use of cannabis products, according to data from the National Conference of State Legislatures. State-licensed cannabis dispensaries and retail shops are expected to generate $32.1 billion in sales this year, according to estimates from MJBiz, a cannabis industry trade publication and events organizer.

Public sentiment has ballooned: In November, a record 70% of Americans surveyed by Gallup said they supported cannabis legalization. In 2014, that share was 51%.

US lawmakers have warmed up to the plant as well, drafting scores of cannabis-related bills, including those seeking to remove marijuana entirely from the Controlled Substances Act while preserving the state-run markets.

Still federally illegal

Moving marijuana out of Schedule I could open more avenues for research; ease some of the more harshly punitive criminal consequences; potentially allow cannabis businesses to bank more freely and openly; and, perhaps most significantly for state-licensed operators, result in firms no longer being subjected to a 40-year-old tax code that disallows credits and deductions from income generated by sales of Schedule I and II substances.

However, rescheduling marijuana will not solve that federal-state conflict, the Congressional Research Service noted in a January 16 brief. The manufacture, distribution and possession of recreational marijuana would remain illegal under federal law and possibly subject to enforcement and prosecution regardless of the state’s legality, the CRS wrote.

“Outside of the tax implications, this is monumentally symbolic,” Andrew Freedman, the former Colorado cannabis czar who now serves as executive director of the Coalition for Cannabis Policy, Education and Regulation, told CNN in an interview. “It is rare for the federal government to reverse itself on an issue where it’s had a stance for the last 100 years and arrested countless people for.”

States with medical marijuana programs do currently have some federal protections in place via appropriations legislation that restricts the Justice Department from interfering in those programs. Schedule III status will not affect that rider, the CRS said.

The 2018 Agriculture Improvement Act, better known as the Farm Bill, defined and decontrolled hemp and hemp-derived cannabidiol and removed it from the definition of marijuana — and from regulatory control — under the Controlled Substances Act. The FDA’s scientific and medical evaluation of marijuana did not address products containing plant-derived cannabidiol, commonly known as CBD.

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CNN’s Hannah Rabinowitz, Meg Tirrell and Jacqueline Howard contributed to this report