The Department of Health and Human Services Recommends Rescheduling Cannabis
September 19, 2023
Overview
Cannabis is legal in most states and most of those living in the U.S. support some form of cannabis legalization. Despite the evolution in state policy and broad public support, cannabis remains illegal under federal law. Things could be changing. In October of 2022, President Biden ordered the Secretary of Health and Human Services and the Attorney General to initiate the administrative process to review cannabis’s classification under federal law.
Cannabis is legal in most states. Currently, 38 states and D.C. have legalized cannabis for medical use and 23 states and D.C. have legalized it for adult use. In addition, the majority of Americans support some form cannabis legalization. Despite the evolution in state policy and broad public support for legalization, cannabis remains illegal under federal law. Cannabis is a Schedule I substance under the Controlled Substances Act (CSA). This means that the federal government has deemed it to have no medical value and a high risk of addiction. This category of substance includes drugs like heroin, LSD, and fentanyl.
However, the schedule (or classification) of a drug can be changed by either federal legislation or through an administrative process. Advocacy groups and other interested parties have unsuccessfully petitioned to have cannabis rescheduled through the administrative process several times. Most recently, in 2016, the Drug Enforcement Agency (DEA) denied a petition to reschedule cannabis to Schedule II. In its decision, the DEA cited safety concerns, high potential for abuse, lack of accepted medical uses, and international treaty obligations.
Things could be changing. In October of 2022, President Biden ordered the Secretary of Health and Human Services (HHS) and the Attorney General to initiate the administrative process to review cannabis’s scheduling under federal law. The administrative process for scheduling review is complex. Part of this process requires the Secretary to provide the DEA with a scientific and medical evaluation of the substance. This initial evaluation is carried out by the Food and Drug Administration and must include a review of many factors including the actual or relative potential for abuse, scientific evidence of its pharmacological effect, current scientific knowledge regarding the substance, history and current pattern of abuse, and risk to the public health.
The Secretary must provide a scheduling recommendation to the DEA based on this scientific review. The findings of the Secretary’s report are binding on the DEA with regards to medical and scientific findings. The report is also binding if it recommends removing the substance from the list of controlled substances. However, the DEA is not bound by a recommendation to reschedule the substance. Once the report is received the DEA must initiate rulemaking to implement any change to the scheduling of a substance.
At the end of August 2023, 11 months after President Biden’s initial order, the Secretary of Health and Human Services has sent a letter to DEA recommending that cannabis be rescheduled to Schedule III. The Schedule III designation is applied to drugs with moderate to low potential for physical and psychological dependence, and some medical value. Drugs of this classification can be made available through prescription.
If the DEA follows the recommendation, it could have an important impact on how cannabis is treated under the law. For example, this will make conducting research on the medical benefits and health impacts of cannabis much easier. As a Schedule I substance, it is currently very difficult to conduct any scientific research with cannabis. One of the major barriers is the DEA’s onerous registration process, which is required to gain access to cannabis for research purposes. Schedule III status also will have a large impact on the cannabis industry from the economic perspective. Currently, cannabis businesses cannot take advantage of normal business tax deductions under the federal tax code because of the Schedule I status. This prohibition has forced cannabis businesses to pay a much higher effective tax rate. Schedule III status will make these federal tax deductions available to cannabis businesses.
Even if cannabis is changed to a Schedule III substance, it won’t become legal in the colloquial sense. With Schedule III, parties still need to register with the DEA to manufacture, distribute, or dispense a substance and follow federal law dealing with these substances. There are also strict criminal federal penalties for unauthorized activities. However, the federal penalties for Schedule III substances are less severe than the current Schedule I penalties for cannabis crimes. In addition, despite the concerns of some, a rescheduling is unlikely to lead to greater federal criminal enforcement or interference with state cannabis programs and their participants.
With HHS’s rescheduling recommendation in hand, the DEA must take the next steps in this process. While nothing is a certainty, it is important to note that the DEA has never overridden a scheduling recommendation from HHS. The Network for Public Health Law will continue to monitor the administrative rescheduling process, provide updates on the federal government’s evolving policy, and explore the public health impacts of any changes.
This post was written by Mathew Swinburne, J.D., Associate Director, Network for Public Health Law – Eastern Region.
The Network for Public Health Law provides information and technical assistance on issues related to public health. The legal information and assistance provided in this document do not constitute legal advice or legal representation. For legal advice, readers should consult a lawyer in their state.
Support for the Network is provided by the Robert Wood Johnson Foundation (RWJF). The views expressed in this post do not represent the views of (and should not be attributed to) RWJF.