A decision from the US Drug Enforcement Agency (DEA) on cannabis rescheduling is 80% likely to come in the next few months, according to new analysis.
However, it is not yet clear whether the DEA will choose to honour the recommendations of the HHS and remove cannabis from the Schedule I category, as new reports suggest some DEA officials are opposed to the idea.
In a note published last week, Bloomberg Intelligence suggested that President Biden’s decision to include cannabis reform in his State of the Union address for the first time in history pushed the likelihood of a rescheduling decision being made in the next few months to 80%.
It comes as companies are increasingly turning to the prospect of rescheduling to turn around their waning fortunes following months of stagnating growth, limited investment, and high tax burdens.
According to Bloomberg’s analysis of transcripts from cannabis businesses’ conference calls, there has been a ‘dramatic shift in focus’ since the potential of rescheduling was announced last August.
Talk of ‘legalization’, which until last year had been the holy grail of regulatory change, has fallen to almost zero, while discussions around rescheduling have skyrocketed.
Companies such as Green Thumb Industries believe rescheduling, which would remove the cumbersome 280E tax burden, could see their tax bill halved.
While focus has shifted towards the prospect of rescheduling, it is far from a done deal.
Separate reporting from The Wall Street Journal has suggested that the DEA’s ongoing review of the recommendations is receiving pushback internally.
It is understood that some DEA officials have raised concerns regarding the strength of modern cannabis strains, with others suggesting the drug’s therapeutic benefits remain unproven and further studies are required to evaluate its long-term health benefits.
This is critical, as cannabis’ current Schedule I status by definition means that it does not have any proven medical uses, despite cannabis being legalized for medical purposes in an overwhelming majority of US states.
