HHS Reschedule vs Deschedule of Cannabis in the USInvestors in US MSOs and Canadian LPs should be thrilled with today's HHS recommendation to reschedule cannabis as a Schedule III drug under the Federal Controlled Substance Act. Some have said that the HHS and FDA didn't go far enough and should have descheduled cannabis. A former deputy commissioner for global regulatory operations and policy at the FDA when asked about this stated today:
"“Descheduling would mean that HHS and FDA would be deciding there was no abuse potential, which would be a very big step for HHS and FDA to take and one that also would have ramifications for its general controlled substance program, Then, in terms of choosing Schedule III, that’s not surprising either, given that Schedule III is not that big of a leap for the agencies to take under the current law, and I think it’s quite supportable under the law and regulations as they exist."
Rescheduling marijuana to Schedule III potentially opens up more avenues for research, allowing cannabis businesses to bank more freely and openly, and have firms no longer subject to 280E, a 40-year-old IRS tax code that disallows credits and deductions from income generated by sales of Schedule I and II substances.
Descheduling cannabis altogether would ultimately make it legal on the federal level, but that would require much more than an HHS recommendation. If HHS simply descheduled it right now, there’d be no regulatory system for it. There’d be no rules around how legal cannabis would be taxed, packaged, labeled, advertised and marketed. This would require US congressional action on it.