Even if the DEA reschedules marijuana from Schedule I to Schedule III under the Controlled Substances Act (CSA), the federal ban on recreational cannabis will remain in place, and the FDA drug approval process will remain as the only pathway for any drug containing marijuana to be federally legally marketed and sold in the United States. Even though the DEA announced earlier this year that it agreed with the August 2023 Department of Health and Human Services recommendation to reschedule marijuana, the DEA subsequently announced, on August 29, that it will hold a hearing on December 2 before an administrative law judge to discuss rescheduling, prompting anger and a cannabis stock sell-off. At this December 2 hearing “Interested Persons” will be allowed to testify, but even if the hearing concludes with the administrative law judge submitting findings in support of rescheduling, and even if the DEA makes a final determination to reschedule marijuana from Schedule I to Schedule III, the current federal prohibition on marijuana’s recreational use will continue in place undisturbed. If marijuana is moved to Schedule III, while some penalties for CSA violations (that depend on the schedule in which a substance is classified) would be reduced, CSA penalties that apply to activities involving marijuana specifically, such as the quantity-based mandatory minimum sentences, would not change as a result of rescheduling. Moreover, while moving marijuana from Schedule I to Schedule III would allow marijuana businesses to deduct some business expenses on federal tax filings, individuals and organizations engaged in marijuana-related activities in violation of the CSA — including participants in the state-legal cannabis industry — may continue to face other consequences. For example, a financial institution handling income from a marijuana business may violate federal anti-money laundering laws, even assuming marijuana is rescheduled. For individuals, participation in the state-legal marijuana industry may have adverse immigration consequences. Violations of the CSA may also affect individuals’ ability to receive certain federal government benefits. In addition, federal law prohibits gun ownership and possession by any person who is an “unlawful user of or addicted to any controlled substance,” with no exception for users of state-legal medical marijuana, notwithstanding the recent ruling from the United States Court of Appeals for the Fifth Circuit. Recently, the Congressional Research Service published a bulletin discussing the impacts that rescheduling might have on FDA’s regulation of marijuana and concluded that even if DEA “reschedules marijuana as a Schedule III substance, it cannot be used recreationally in food, dietary supplements, tobacco products, or cosmetics” under federal law. As we head toward what could be a multi-day hearing beginning on December 2, we might do well to recognize that, at least when it comes to federal marijuana policy, the more things change, the more the prohibition status quo will persist.
