Cannabis
The Cannabis Industry Needs Luck With The DEA
It will take more than Irish luck to help the cannabis industry win over the DEA.
Million of consumers are fans of cannabis, not only to chill out but for medical reasons. In fact, it has become a replacement for alcohol and spanned a movement call California sober. Aside from the thousands of mom and pop small business owners, cannabis employees over 440,000 people. Even the staid AARP has agreed it has health benefits. Over 80% of the country believe it should be legal in some form, but the cannabis industry needs luck with the DEA to move forward. Rescheduling cannabis means changing its classification under the Controlled Substances Act (CSA), moving it from a more restrictive schedule (like Schedule I) to a less restrictive one (like Schedule III), acknowledging its potential medical uses while still maintaining regulatory controls.
The Drug Enforcement Administration (DEA) had scheduled hearings on the proposed rescheduling of cannabis to begin on January 21, 2025. However, these hearings were abruptly canceled by DEA Administrative Law Judge John Mulrooney following legal challenges from pro-reform witnesses. This cancellation has pushed back the rescheduling process by at least three months, with no clear timeline for when it might resume.
The delay stems from allegations of improper communications between DEA officials and anti-rescheduling witnesses. While Judge Mulrooney rejected some key arguments from rescheduling proponents, he granted a request for leave to file an interlocutory appeal, effectively putting the entire process on hold.
The transition to the current administration has further complicated matters. On February 11, 2025, Terrance C. Cole was nominated for DEA administrator, an individual known for his opposition to cannabis reform. This nomination signals a potential shift in the DEA’s approach to marijuana policy, which could further impede rescheduling efforts.
Even if rescheduling were to move forward, it would face significant regulatory challenges. Critics argue that as a Schedule III drug, marijuana would remain under DEA regulation, requiring the approximately 15,000 cannabis dispensaries in the U.S. to register with the DEA and fulfill strict reporting requirements.
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The cannabis industry eagerly awaits rescheduling, as it would bring significant benefits, including the ability to claim federal tax deductions and credits currently prohibited under 26 U.S.C. § 280E. However, the ongoing delays and potential policy shifts under the new administration have created uncertainty in the market.