On October 6, 2022, President Biden issued perhaps the
biggest shift in federal policy on cannabis since enactment of
the Controlled Substances Act, issuing a Statement on Marijuana Reform that:
\u2013 Pardons all prior federal offenses of simple possession or use of
marijuana;
\u2013 Urges all Governors to pardon all prior state offenses of simple
possession or use of marijuana; and
\u2013 Requests that the Secretary of Health and Human Services and the
Attorney General initiate an administrative review of marijuana\u2019s
scheduling under the CSA.<\/p>\r\n
This unexpected but welcome shift in Administration policy led to the usual bump in prices of publicly-traded cannabis companies, as investors seized on any legalization news as good news.\u00a0<\/p>\r\n
But this may well be one of those be careful what you wish for moments.<\/p>\r\n
Many commenters presume this move presages the federal legalization of cannabis. But astute observers understand that the devil is in the details when it comes to so-called federal legalization – and that there are many shades of legalization with very different outcomes for the current industry, legacy operators, and the various noncannabis industries waiting for a break in federal policy that will allow them to enter the cannabis space.<\/p>\r\n
Notably, President Biden did not instruct his agencies to deschedule or even to reschedule cannabis.\u00a0 Instead,\u00a0 he \u201cask[ed]\u201d HHS and DOJ \u201cto initiate the administrative process to review expeditiously how<\/em> marijuana is scheduled under federal law.”<\/p>\r\n The President noted that “\u2026 even as federal and state regulation of marijuana changes, important limitations on trafficking, marketing, and under-age sales should stay in place.\u201d Reading the statement closely, it would seem that descheduling is an unlikely result, unless done in tandem with federal legislation creating a federal regulatory regime or authorizing states to regulate the business.<\/span><\/p>\r\n And rescheduling is not necessarily good news for the industry, either. Rescheduling could result in FDA regulation of products that would all but require cannabis companies to operate like pharmaceutical companies.<\/p>\r\n If cannabis is descheduled or rescheduled, existing state regulatory schemes that feature or include local protectionist measures would likely fall as substantial burden on interstate commerce. The only sure way to preserve existing state-based markets will be an act of Congress authorizing the states to continue to discriminate in favor of local operators and local cultivation.<\/p>\r\n The big questions following this Statement:\u00a0 Any of these outcomes are possible.\u00a0 And where you stand on this review very<\/em> much depends on where you sit.<\/p>\r\n","protected":false},"excerpt":{"rendered":" On October 6, 2022, President Biden issued perhaps thebiggest shift in federal policy on cannabis since enactment ofthe Controlled Substances Act, issuing a Statement on Marijuana Reform that:\u2013 Pardons all prior federal offenses of simple possession or use ofmarijuana;\u2013 Urges all Governors to pardon all prior state offenses of simplepossession or use of marijuana; and\u2013 … <\/p>\n
\u2013 Will DEA\/DOJ\/HHS drag their feet yet again?
\u2013 Will marijuana be declassified altogether?
\u2013 Will it be re-classified as a Schedule II, III, IV, or V controlled substance?
\u2013 Will it remain a Schedule I controlled substance?<\/p>\r\n