19 September 2023

Report To Congress Identifies Significant Implications Of Marijuana Rescheduling

Wilson Elser Moskowitz Edelman & Dicker LLP


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On September 13, 2023, the Congressional Research Service (CRS) released a report prepared for members of Congress regarding the recent recommendation...
United States Cannabis & Hemp
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On September 13, 2023, the Congressional Research Service (CRS) released a report prepared for members of Congress regarding the recent recommendation by the Department of Health and Human Services (HHS) that marijuana be rescheduled from Schedule 1 to Schedule 3 under the Controlled Substances Act (CSA).

The recommendation by HHS was based on a review performed by the Food and Drug Administration (FDA) pursuant to the executive order of President Biden issued in October 2022. The Drug Enforcement Agency (DEA) will now conduct its own review.

DEA Approval Is Likely

As a result of the DEA's acknowledgment during a 2020 congressional hearing that it is "bound by FDA's recommendations on scientific and medical matters," the CRS report predicts that "if past is prologue it could be likely that DEA will reschedule marijuana according to HHS's recommendation." This is because "CRS is unaware of any instance where DEA has rejected an FDA recommendation to reschedule."

State Policy Implications

The CRS report states that when marijuana is likely rescheduled to Schedule 3, it will have significant implications for state medical marijuana programs, but fewer implications for state adult-use programs. "A move to any lower schedule would allow for medical use of marijuana while maintaining federal criminal control over marijuana pursuant to the CSA."

Federal Policy Implications

Several federal policy implications of rescheduling marijuana are identified by CRS, including:

  • Those who manufacture, distribute, dispense and possess medical marijuana may now be able to do so lawfully (under the CSA).
  • States' medical marijuana programs may now be able to comply with the CSA, and will still be subject to CSA/DEA criminal and regulatory control; federal public health laws such as the Federal Food, Drug, and Cosmetic Act; and agricultural laws such as the Agricultural Marketing Act of 1946.
  • The scope of and demand for FDA oversight for medical marijuana and related products may grow considerably. In the short term, FDA may need to generate or update a substantial amount of technical information to clarify its regulatory approach to marijuana for relevant stakeholders. Given that marijuana is a complex substance containing various pharmaceutical components and is available to consumers in numerous formats, FDA also may need to consider long-term resource allocation to ensure that marijuana products consistently meet applicable regulatory standards.
  • Marijuana producers and retailers would be able to deduct the costs of selling their product (e.g., payroll, rent, advertising) for the purposes of federal income tax filings.
  • Those who use medical marijuana lawfully may now be eligible to (1) access public housing, (2) obtain immigrant and nonimmigrant visas, and (3) purchase and possess firearms. Those who use marijuana recreationally would still face restrictions in these areas.
  • Researchers would face less-strict regulatory controls in researching marijuana as a Schedule 3 controlled substance, which may in turn promote further research on marijuana.
  • The DEA would no longer set production quota limitations for marijuana.
  • Those who use medical marijuana lawfully may need to contend with fewer barriers to federal employment and eligibility to serve in the military.

Options for Congress

Finally, CRS emphasizes that Congress may choose to act with respect to the rescheduling of marijuana. This could include legislation to place marijuana on one of the other schedules under the CSA, create a separate classification for marijuana under the CSA or remove marijuana as a controlled substance altogether. CRS further states that "Congress may consider whether to devote additional resources to FDA and the U.S. Department of Agriculture to ensure the safety and quality of the many different products already available in many state markets."

This report highlights the fact that rescheduling is very likely to happen, and that Congress still has an important role in the unfolding changes to federal marijuana policy.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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