Exploring the Potential Implications of Cannabis Rescheduling to Schedule III
“It’s acceptance at the highest level of the federal government, being able to operate like a normal business.” That’s what rescheduling means for the cannabis industry, according to Verano’s Chief Investment Officer, Aaron Miles, on a recent episode of the Above the Haze podcast presented by Holon Law Partners.
In recent years, the conversation surrounding cannabis has evolved significantly, with many advocating for its rescheduling at the federal level in the United States. Currently classified as a Schedule I substance under the Controlled Substances Act, cannabis faces numerous legal and regulatory barriers. However, the U.S. Drug Enforcement Administration (DEA) has agreed with the earlier recommendation of the Department of Health and Human Services (HHS) and has signaled its intent to move Cannabis from Schedule I to Schedule III.
Before delving into the implications, it’s crucial to understand what rescheduling to Schedule III entails. Schedule III substances are considered to have a moderate to low potential for physical and psychological dependence compared to Schedule I and II substances. Medications like Tylenol with codeine, ketamine, and anabolic steroids are examples of substances currently classified under Schedule III.
Potential Implications:
- Research Opportunities:
Schedule I classification has hindered comprehensive research into cannabis’s therapeutic potential. Rescheduling to Schedule III could open doors for more extensive scientific studies, leading to a better understanding of its medical benefits and potential risks. This is good news for cannabis patients and the industry, according to Mr. Miles. “Having the availability to go down the research and development route and really being able to utilize the power of this plant medicine, I think is, is probably the most important aspect,” he said.
Expanded research could result in the development of new cannabis-derived medications and treatment options and according to Mr. Miles, the expansion of research and utilization of cannabinoids could be felt across various sectors. “There’s a lot of adjacent industries that can benefit from cannabis. I mean, in cosmetics, it’s in food, it could be in medicine, it could be in sleep aids,” he said.
- Economic Impact:
The shift to Schedule III could also have significant economic implications, particularly for the cannabis industry, specifically as it relates to banking. “In the US, we’re going to be able to use the largest banks. We’re going to be able to utilize the biggest exchanges,” Mr. Miles said.
Rescheduling may open up new opportunities for businesses involved in cannabis cultivation, processing, and distribution as investors begin to feel more comfortable investing in the industry. According to Mr. Miles, rescheduling will alleviate concerns that have kept bigger players from participating in the industry to this point. “There’s some smaller institutions that I think just the rescheduling would give them comfortability to be able to start to invest because their custodians are probably going to say, OK, the government now is accepted as the highest level,” he said.
- Medical Accessibility:
Additionally, rescheduling cannabis to Schedule III could facilitate greater access for medical purposes. By reducing regulatory barriers, patients may find it easier to obtain cannabis-based medications for conditions such as chronic pain, epilepsy, and nausea associated with chemotherapy.
- Regulatory Framework:
Moving cannabis to Schedule III would subject it to a different regulatory framework. This could involve stringent quality control measures, standardized dosages, and oversight by regulatory bodies, similar to other Schedule III medications. Such regulations could enhance consumer safety and product consistency. This could also lead to new licensing requirements for existing cannabis businesses. It remains to be seen whether current operators will need to obtain DEA licenses in addition to their state-issued licenses.
Legalization Momentum:
The potential rescheduling of cannabis to Schedule III carries significant implications across various domains, from healthcare and research to economics and policy, and could serve as a stepping stone towards broader legalization efforts. By acknowledging its medical potential and reducing its stigma, policymakers may be more inclined to explore comprehensive cannabis reform, including decriminalization or federal legalization. However, this could also trigger debates about the appropriate level of regulation and taxation.
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