In a significant development for the marijuana industry, the Department of Health and Human Services (HHS) has asked the Drug Enforcement Agency (DEA) to consider revising marijuana’s classification under the Controlled Substances Act. Currently, marijuana is classified as a Schedule I drug, alongside heroin and LSD, despite evidence of its medical benefits and widespread legalization at the state level. The HHS recommendation suggests moving marijuana down to Schedule III, which would signify a substance with moderate to low potential for dependence. However, cultivation, production, and sales would still be against federal law.
The DEA will review marijuana’s potential for abuse, medical use, and level of safety or addiction before deciding, which is expected before the 2024 presidential election. If rescheduled, marijuana stocks would benefit from new tax opportunities, the potential for interstate commerce, and expanded research and investor interest. However, marijuana’s federal standing would still prevent banking services unless legislation such as the SAFE Act is passed to address this issue. Industry leaders and lawmakers are optimistic about the potential for federal cannabis reform.