Top US Health Agency Recommends Marijuana Reclassified to Schedule III

Note from the editor: This is an article about the HHS’s recommendation to the DEA that marijuana be reclassified to Schedule III that I wrote for the American Journal of Endocannabinoid Medicine. You can read the original by clicking here.

In a historic decision, the US Department of Health and Human Services (HHS) recommended rescheduling marijuana to Schedule III. Currently, it is listed in Schedule I. The HHS’s recommendation, which was made to the US Drug Enforcement Administration (DEA), was prompted by a request last year from the Biden Administration that marijuana’s classification be reevaluated.

“Following the data and science, HHS has expeditiously responded to President Biden’s directive to HHS Secretary [Xavier Becerra] and provided its scheduling recommendation for marijuana to the DEA on August 29, 2023,” said a spokesperson for the HHS.

Historic Decision

Although the HHS spokesperson did not indicate that it recommended reclassifying marijuana under Schedule III, the media company Bloomberg obtained a letter in which the agency recommended the reclassification to Schedule III, meaning that marijuana is considered to have “moderate to low potential for physical and psychological dependence.”

As a Schedule I drug, marijuana is officially deemed to have no current medical use with high potential for abuse and/or addiction. This classification is at odds with a large and growing body of scientific research regarding marijuana’s medicinal benefits. Its Schedule I status remains a primary obstacle to conducting research. Additionally, the Schedule I classification pits the federal government against the states, as most states now regulate marijuana and allow it for medicinal use. The tension between state and federal law has created a 2-tier system for marijuana companies that operate in the United States, in which they violate federal law despite being compliant with the laws of the states in which they operate. Additionally, marijuana’s Schedule I status has created tax and banking problems for these businesses.

Research Takes Center Stage

Rescheduling marijuana to Schedule III will remove the largest barrier to research in the United States. Additionally, for businesses operating in the marijuana industry, the reclassification may reduce regulatory burdens, including those with respect to taxation and banking. If the DEA reclassifies marijuana to Schedule III, it will remain a controlled drug that can only be distributed or possessed pursuant to a physician’s prescription. Although this will be seen as a boon for many, it will be a frustrating disappointment for advocates who had hoped that the HHS would recommend that marijuana be de-scheduled completely.

“Most importantly, meaningful research will be allowed to commence, which will give providers the long-awaited granular data they expect to help manage patients. This is the piece I’ve been waiting for and I couldn’t be more excited,” says Leslie Apgar, MD, Editor in Chief of AJEM.

Boost for Business

In a nod to what may be to come, cannabis stocks rallied on Wednesday after the news broke. The recommendation comes at a critical time for the cannabis industry. State-regulated marijuana companies are struggling with declining profits. Meanwhile, the hemp industry is anxiously awaiting a new Farm Bill, which will largely determine its fate. Both industries produce and sell similar products.

“Moving from Schedule I to III will impact the cannabis industry and those trying to study the plant in profound ways. The change will significantly lessen the tax burdens and hopefully force safe banking laws to be passed, which will open up the cannabis industry to investors previously nervous to enter the market. It will also allow an industry facing brutal margins more breathing room,” says Dr. Apgar.

Authority to reclassify marijuana to Schedule III remains with the DEA. In response to a question by The Hill, a DEA spokesperson stated, “We can confirm DEA received a letter from the Department of Health and Human Services providing its findings and recommendation on marijuana scheduling, pursuant to President Biden’s request for a review[.] As part of this process, HHS conducted a scientific and medical evaluation for consideration by DEA. DEA has the final authority to schedule or reschedule a drug under the Controlled Substances Act. DEA will now initiate its review.”

August 31, 2023

Rod Kight is an international cannabis lawyer. He represents businesses throughout the cannabis industry. Additionally, Rod speaks at cannabis conferences, drafts and presents legislation to foreign governments, is regularly quoted on cannabis matters in the media, and is the editor of the Kight on Cannabis legal blog, which discusses legal issues affecting the cannabis industry. You can contact him by clicking here.