mcglinchey: Federal Legalization of Marijuana May Be Closer Than You Think

According to reporting from Kyle Jaegar of Marijuana Moment, the federal government aims to finish its review of marijuana’s current legal status by the end of 2023, based on remarks from the head of the U.S. Department of Health of Human Services (HHS), Secretary Xavier Becerra. Becerra told Marijuana Moment at a press briefing in Sacramento that he aims to provide President Joe Biden with a cannabis scheduling decision this year. Becerra’s comments provide insight into the federal government’s activities following Biden’s Statement on Marijuana Reform, issued on October 6, 2022 (the Statement). In the Statement, Biden instructed Becerra and U.S. Attorney General Merrick Garland to initiate the administrative process to review how marijuana is scheduled under federal law.

Should the federal government determine that it is appropriate for marijuana to be rescheduled or descheduled altogether, it will have far-reaching impacts on the existing and future industry, as well as ancillary businesses, and our economic fabric as a whole. Both re- and de-scheduling could have dramatic implications for licensees, consumers, doctors, healthcare providers, banks, credit unions and financial services providers, interstate transportation, insurance, taxes, employment, the applicability of federal laws across the board, and more.

Cannabis-touching businesses, ancillary businesses, and companies with marijuana policies and practices will be impacted by these potential changes in federal law. They are well-advised to understand the procedure that the federal government is undertaking, along with the potential outcomes and relevant timelines that could affect their business operations, policies, procedures, and more. This will help them prepare for what many in the industry believe to be an inevitability: the de/rescheduling of marijuana under federal law.

What is the Current and Potential Future Status of Marijuana under Federal Law?

Marijuana and delta-9 THC are currently listed in Schedule I of the Controlled Substances Act (CSA). The CSA places drugs in one of five Schedules, with Schedule I being the most restrictive. Drugs in Schedule I meet the following criteria[1]:

1. The drug or other substance has a high potential for abuse;
2. The drug or other substance has no currently accepted medical use in treatment in the United States; and
3. There is a lack of accepted safety for use of the drug or other substance under medical supervision.

How Could Marijuana’s Status Change Based on Biden’s Request for Administrative Review?

The CSA grants the Attorney General rulemaking authority to reschedule a substance to another Schedule or to remove a substance from the CSA altogether, the latter process referred to as descheduling. To transfer a drug between schedules (i.e., reschedule), the Attorney General must make findings that the drug or other substance fits into the criteria of a given Schedule.[2] In order to remove a drug (i.e., deschedule), the Attorney General must find that the drug or other substance does not meet the requirements for inclusion in any Schedule.[3]

Before initiating rulemaking to reschedule or deschedule, HHS must evaluate the drug via the U.S. Food and Drug Administration (FDA) and report findings to the Attorney General based on scientific and medical considerations. The Attorney General, usually through the Drug Enforcement Administration (DEA), conducts its own research as well.

How will the Federal Government Determine Whether Marijuana Should be Rescheduled or Descheduled?

The factors in determining the appropriate Schedule or to remove a drug from the CSA altogether are as follows[4]:

1. Its actual or relative potential for abuse;
2. Scientific evidence of its pharmacological effect, if known;
3. The state of current scientific knowledge regarding the drug or other substance;
4. Its history and current pattern of abuse;
5. The scope, duration, and significance of abuse;
6. What, if any, risk there is to the public health;
7. Its psychic or physiological dependence liability; and
8. Whether the substance is an immediate precursor of a substance already controlled under this subchapter.

The Attorney General makes the final decision on how to schedule a drug, but the CSA indicates when the HHS Secretary’s recommendations are binding[5]:

The recommendations of the Secretary to the Attorney General shall be binding on the Attorney General as to such scientific and medical matters, and if the Secretary recommends that a drug or other substance not be controlled, the Attorney General shall not control the drug or other substance. If the Attorney General determines that these facts and all other relevant data constitute substantial evidence of potential for abuse, such as to warrant control or substantial evidence that the drug or other substance should be removed entirely from the schedules, he shall initiate proceedings for control or removal, as the case may be, under subsection (a).

Will the Federal Government Reschedule or Deschedule Marijuana?

At the present point in time, we just do not know what will happen with marijuana – whether it will be descheduled, rescheduled, or determined to be appropriately placed in Schedule I. Becerra’s recent statements do not provide any insight into these critical determinations, either, failing to clearly indicate whether his recommendation will be to reschedule, deschedule, or leave marijuana in Schedule I.

Historically, Becerra has a history of advocating for marijuana legalization, especially in his former role as California’s Attorney General, where he promised to enforce California’s cannabis laws in light of former U.S. Attorney Jeff Sessions’ decision to rescind the Cole Memorandum in 2018. As far back as 2017, Becerra told the Los Angeles Times that the federal government had to “catch up” regarding marijuana law. While these statements are relevant to Becerra’s opinion on marijuana reform, as HHS Secretary, he will need to follow the CSA protocols and base any recommendation on medical and scientific findings.

When Can We Expect a Decision on Marijuana Scheduling?

If HHS and the FDA do, in fact, report their findings by the end of 2023, it does not mean that a final decision will be made at that time. The Attorney General would then need to review the recommendation, make a determination, and finally initiate the rulemaking process pursuant to the Administrative Procedures Act.[6] If Becerra’s statements are true, and everything goes according to plan, marijuana could have a new federal status in 2024.

[1] 21 USC 812(b)(1).

[2] 21 USC 811(a)(1)(B).

[3] 21 USC 811(a)(2).

[4] 21 USC 811(c).

[5] 21 USC 811(b).

[6] See 5 USC 551-559.