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Operating on a late schedule: DEA considers re-scheduling marijuana

The possibility of a reclassification of marijuana from Schedule I to another schedule has many concerned about what this change could mean for medical marijuana industries and businesses who currently sell regulated, legal marijuana.

Photo from Getty Images.

Despite marijuana’s evolution as a societal norm, the federal government has been reluctant to reclassify the drug.  However, in the next six months the Drug Enforcement Administration (DEA) may make a landmark decision to re-schedule marijuana from its schedule I classification.

In April, the DEA published a memorandum concerning medical marijuana research.  The memo discusses various topics such as research contracts, the framework in which marijuana is studied, future plans as to marijuana research, and an expected timeline for a decision as to whether or not marijuana will be rescheduled. Research has been conducted on marijuana in recent years, but the demand of marijuana legalization or reclassification has not been enough to support increasing the government’s support of such research.  The memo states that a decision will be made “in the first half of 2016.”

Drugs are scheduled into categories based on their potential for abuse, accepted safety under medical supervision, and accepted medical use.

Marijuana was originally classified as a schedule I drug in 1970 due to the enactment of the Controlled Substances Act (CSA).  The federal law was passed in conjunction with numerous other laws as part of the Comprehensive Drug Abuse Prevention and Control Act of 1970.  The consolidation of laws classified substances under a comprehensive framework, mandated the pharmaceutical industry to safeguard these substances from the public, defined mechanisms for enforcement, and implemented a thorough record keeping process in the hopes of eliminating drug abuse in the American community.

Drugs are scheduled into categories based their potential for abuse, accepted safety under medical supervision, and accepted medical use.  There are five schedules total.  Of these schedules, Schedule I containing drugs that have a high potential for abuse and no approved medical use, while Schedule V contains drugs with low potential for abuse, minimal physical or psychological dependence, and has a currently accepted medical use in treatment.  While advances in medicine and images portrayed in pop culture would lead one to reasonably classify marijuana under Schedule V, the Federal Government has remained steadfast in their determination to keep marijuana classified as a Schedule I drug.

Reformers have long argued that marijuana has no business being grouped with such drugs as heroine and LSD.  However, their arguments have fallen on deaf ears with Congress and drug regulatory bodies.  The argument, though, is the same as it has been for years.  How is marijuana in the same category as heroine?  Heroine caused 11,000 deaths by overdose in 2014.  However, evidence is sparse on last time someone overdosed on marijuana.  While these arguments are thrown around like reactionary insults, the more poignant question to ask is: “How can the DEA say marijuana has no medical value in light of current scientific findings?”

Recent medical research has shown that marijuana contains properties that treat a plethora of ailments ranging from Multiple Sclerosis to Epilepsy.  Even the current United States Surgeon General, Vivek Murthy, admitted last year that it’s true marijuana can be helpful in treating certain medical conditions.  Since research has demonstrated marijuana’s medical properties, it has been argued that the drug should be removed from a category that classifies its substances as meritless medicine, but instead as a dangerous drug.  In addition, the DEA should be persuaded by the fact that twenty-three states plus Washington D.C. have legalized medical marijuana even in the face of federal prohibition.

Why is it that marijuana has not been rescheduled before? 

Why is it that marijuana has not been rescheduled before?  There are numerous reasons why marijuana has not been rescheduled, but among them are the procedural hoops the DEA must jump through in order to reclassify a drug.  The memo released by the DEA shines light on the procedure that the agency must abide by in order to reschedule drugs under the CSA.  That procedure requires the DEA to make a formal request to reschedule to the Office of the Assistant Secretary for Health (ASH) with a citizen petition attached.  From there, the request is forwarded to the FDA who conducts a scientific review using an eight factor analysis.

The eight factor analysis considers: 1) actual or relative potential for abuse 2) scientific evidence of its pharmacological effect 3) state of current scientific knowledge regarding the substance 4) history and current pattern of abuse 5) scope, duration, and significance of abuse 6) risk to the public health 7) psychic or physiological dependence liability 8) immediate precursor of a substance already controlled.  The analysis is then sent to the National Institute on Drug Abuse for a concurrence on the FDA’s opinion.

The concurrence is then sent to the FDA Commissioner and ASH for approval before being transmitted to the DEA in the form of a recommendation.  The DEA then publishes the recommendation in the Federal Register for a 30-60 day comment period open to the public.  Following the comment period, the DEA publishes the final notice on the scheduling action.  Given this process which is cluttered with red tape, it is understandable how past petitions have failed to result in any policy change over the last forty-six years.

If the DEA does choose to reschedule marijuana, do not expect a revolutionary decision.  In all likelihood, if marijuana is reclassified, it will only be bumped down to schedule II.  Schedule II drugs are characterized as having a high potential for abuse with some accepted medical properties.  Drugs in this category include amphetamines (Adderall) and oxycodone (OxyContin).

The marijuana economy will not experience a boom but will instead still be plagued with the issues affecting the drug under Schedule I.

Assuming marijuana gets classified as a Schedule II drug, there will be little change to the American marijuana landscape.  The marijuana economy will not experience a boom but will instead still be plagued with the issues affecting the drug under Schedule I.  State marijuana businesses will still struggle to conduct business due to a lack of banking services willing to accept and hold their money.

One poll found that 60 percent of marijuana enterprises don’t have banking services.  Banks choose not to engage in business with marijuana related companies out of fear of prosecution.  A reclassification to Schedule II will do little to subside these fears since the federal government will still be within their right to prosecute businesses involved in these types of transactions.

In addition, federal taxes have been hitting marijuana businesses with a heavy bill.  Section 280E of the Federal Tax Code states that taxpayers cannot deduct the costs of selling federally illegal drugs.  If marijuana were classified under Schedule II, then the same harsh taxes would be slapped on marijuana businesses residing in marijuana friendly states.

As the regulations become more voluminous and difficult to navigate, regulated industry counsel will be a necessity in the growth of marijuana businesses.

While a marijuana reclassification may not benefit marijuana enterprises, some law firms have recognized an emerging niche.  Law firms like GrayRobinson PA specialize in counseling businesses in what has come to be called “regulated industries,” including marijuana businesses.  Practice groups like GrayRobinson specialize in assisting clients with compliance issues regarding state and federal regulations as these businesses attempt to manufacture, market, and distribute regulated products.  If marijuana is rescheduled, the regulations will likely increase.  As the regulations become more voluminous and difficult to navigate, regulated industry counsel will be a necessity in the growth of marijuana businesses.

Marijuana would likely have to be reclassified under Schedules III, IV, or V for real change to occur in the landscape.  At that point, banks and businesses would have more courage to engage in the marijuana business.  The states that have not passed pro-medicinal marijuana laws would likely come forward and pass similar legislation as well.  However, such an action seems too radical and uncharacteristic of the DEA.

Odds are that when July rolls around, the DEA will continue to classify marijuana as a Schedule I substance.  However, should marijuana be rescheduled, even if it is just to Schedule II, the government would be signally a departure from a policy that has dominated American culture for the last fifty years.

Johnny Hutchens, Senior Staff Writer
About Johnny Hutchens, Senior Staff Writer (18 Articles)
Johnny Hutchens is a third year law student and serves as a Senior Staff Writer for the Campbell Law Observer. He is originally from Charlotte and graduated from the University of South Carolina in 2012 with a Bachelor of Arts in Political Science. The summer following his first year, he interned as a research assistant for Professor Collins in the Legal Research and Writing department at Campbell.
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