Updated: Oct 30, 2022
President Biden stunned with an unprecedented pro-cannabis message this month. But let’s take a hard-headed look at the announcement. First, Joe announced pardons for people convicted of marijuana possession under federal law.
That’s what made the headlines. But to put it into context: The pardons affect people convicted of federal possession only. People convicted of selling or distributing cannabis were not pardoned. People convicted of state cannabis crimes were not pardoned. Non-citizen/residents and military personnel are excluded from relief. Records will not be expunged. So, estimates are that only 6,500 Americans will be affected. None of these affected Americans are currently imprisoned for their possession offenses. (See NY Times 10/6/22: Marijuana Moment 10-13-22: Who's Impacted by Biden's Pardon Action Second, Joe announced a review of cannabis scheduling under the Controlled Substances Act of 1970. This is potentially game-changing. The CSA works by allocating lower numbered schedule classifications to the most dangerous drugs, and higher numbered schedule classifications to less perilous drugs. Currently, cannabis is classified as a Schedule I drug under the CSA, and that’s the most severe classification. Schedule I drugs are defined as having no accepted medical use and have a high potential for abuse. So, in the eyes of the Feds, cannabis is currently the equivalent to heroin and ecstasy. Rescheduling to a higher classification would place cannabis in a more permissive controlled drug category and allow for easier cultivation, distribution, sale and consumption. For example, a rescheduling to a Schedule IV classification would put cannabis on a par with Valium, but still leave it as a substance requiring a doctor’s prescription under federal law. Likely, the cannabis industry would want cannabis to be rescheduled, at most, as a Schedule V drug, akin to over-the-counter distribution like some cough preparations, or better yet, as a noncontrolled substance altogether like alcohol or tobacco. See: MJBizDaily 10-14-22: How Rescheduling Could Affect The Cannabis Industry . So, the true promise of this reform will be where cannabis lands after a scheduling review; either higher among the 5 schedules of controlled substances, or entirely outside the controlled classes of drugs. To that end, it’s worth noting that Joe’s 2020 campaign promise was to reschedule cannabis from a Schedule I to a Schedule II controlled drug. Marijuana Moment 1-20-22: Biden's Marijuana Promises 1 Year In . A Schedule II substance is defined as a drug with some medical benefit but which still carries a high potential for abuse, with such use potentially leading to severe psychological or physical dependence. Joe’s prior declarations would insert cannabis into the same controlled drug class as cocaine, opium, fentanyl and Oxycontin. Obviously, that’s still egregiously mistaken. Will Biden’s political subordinates have the courage to overstep their boss’s public posture on rescheduling? If not, then as a Schedule II controlled drug, cannabis business operation expenses would still not be deductible under 280E of the Internal Revenue Code. Banking restrictions might marginally loosen. See Banking Dive 10/7/22 Banking Dive 10-7-22: De-scheduling And Cannabis Banking Nonetheless, we are not unappreciative of the Biden announcement. We recognize that this is the first time any US President has asserted a pro-cannabis position and the political consequences can be earth-shaking. If taken in conjunction with the potential passage of several upcoming state cannabis ballot initiatives, it could make for a material change in the national cannabis conversation.