New Cannabis Coalition Aims to Influence Federal Rescheduling Process

A broad group of marijuana companies, cannabis trade organizations, nonprofits, law firms, doctors, ancillary companies, and activists has joined forces in the hopes of influencing a review by the Biden administration which could result in federal marijuana legalization.

The group, called the Coalition for Cannabis Scheduling Reform, will try to persuade the U.S. Food and Drug Administration and other agencies that marijuana’s decades-long presence on Schedule 1 of the list of controlled substances is simply bad policy. CCSR noted in a press release that there has never been a single death attributed by federal health regulators to a cannabis overdose.

“Yet cannabis is classified as a Schedule 1 controlled substance under federal law, on par with heroin and above methamphetamine, opium, and fentanyl,” CCSR noted in a statement.

“We’re optimistic that the FDA and the administration will listen to the science and the legal arguments, which will inevitably point them to Schedule 3 or lower, or in an ideal case, de-scheduling,” said Bryan Barash, vice president at cannabis tech firm Dutchie and co-chair of CCSR.

Some of the coalition’s members include:

• Multistate operators such as Acreage Holdings, Columbia Care, Cresco Labs, Curaleaf, Green Thumb Industries, PharmaCann, and Verano Holdings.
• Small social equity marijuana businesses such as Housing Works, Smacked, and Union Square Travel Agency.
• Trade associations such as the American Trade Association for Cannabis and Hemp, the National Cannabis Roundtable, the New York CAURD Coalition, and the U.S. Cannabis Council.
• Nonprofits such as the Marijuana Policy Project, Hemp for Victory, the Justus Foundation, the Bronx Community Foundation, and the Weldon Project.

President Joe Biden kicked off the review of marijuana’s legal status last fall when he also pardoned thousands of federal cannabis convicts. But since then, little has been shared about the administrative process underway, which begins at the FDA before moving eventually to the Department of Justice, where Attorney General Merrick Garland will make a final decision on whether to reschedule, de-schedule, or maintain the status quo.

But there are a host of questions swirling around both the process and the potential outcome.

For instance, the Biden administration has not set a clear timeline for a final decision to be made. The president has only asked that the review be done “expeditiously,” and Xavier Becerra, the secretary of the Department of Health and Human Services, has said that’s how the FDA is proceeding.

It’s also not clear if there will ever be any public hearings held on the rescheduling question, Barash acknowledged, since the process is administrative and not parallel to, say, Congressional committee hearings or votes.

There are enormous potential business repercussions for the U.S. cannabis industry, depending on which of the three outcomes Garland chooses.

If he makes the easiest choice and leaves cannabis at Schedule 1, then the status quo would remain, as would all of the legal and financial hurdles the industry is already battling. If Garland moves marijuana to Schedule 2, that would leave the onerous 280E portion of the federal tax code still applicable to all licensed marijuana companies.

But if he chooses Schedule 3 or lower, then 280E would cease to apply to the entire industry. That would increase profit margins overnight for every cannabis business by allowing for standard business tax deductions.

Rescheduling or de-scheduling could also open the door for interstate commerce, another potential lifeline for cannabis farmers struggling in oversaturated state markets. But it could also throw open the floodgates for new federal regulations by the FDA and perhaps other bureaucracies, potentially drowning many small businesses in new red tape and government mandates. Narcotics, for example, are listed lower on the controlled substances list may be legal, they’re still very tightly regulated.

That is why the CCSR wants a voice at the table.

“We formed the (CCSR) to help bring cannabis regulation into line with modern science, medicine and law,” Barash said in the release, which asserted that the coalition is already “actively engaging with stakeholders in the Biden administration.”

Barash said the group is welcoming to all members and is a loose coalition without monthly or annual dues, the way trade associations are structured.

“It was created to address this specific process,” Barash said of the CCSR, adding that the status quo is “unacceptable.”

“It’s time for a change,” he said.