The Biden administration will take a historic step toward easing federal restrictions on cannabis, with plans to announce an interim rule soon reclassifying the drug for the first time since the Controlled Substances Act was enacted more than 50 years ago, four sources with knowledge of the decision tell NBC News.
The Drug Enforcement Administration is expected to approve an opinion by the Department of Health and Human Services that marijuana should be reclassified from the most strict Schedule I to the less stringent Schedule III, marking the first time that the U.S. government would acknowledge its potential medical benefits and begin studying them in earnest.
The Justice Department “continues to work on this rule,” a Biden administration official said. “We have no further comment at this time.”
Since 1971, marijuana has been in the same category as heroin, methamphetamines and LSD. Each substance under the Schedule I classification is defined as a drug with no accepted medical use and a high potential for abuse. Schedule III substances include Tylenol with codeine, steroids and testosterone.
By rescheduling cannabis, the drug would now be studied and researched to identify concrete medical benefits, opening the door for pharmaceutical companies to get involved with the sale and distribution of medical marijuana in states where it is legal.
For the $34 billion cannabis industry, the move would also eliminate significant tax burdens for businesses in states where the drug is legal, notably getting rid of the Internal Revenue Services code Section 280E which currently prohibits legal cannabis companies from deducting what would otherwise be ordinary business expenses.