July 2, 2023

In October 2022, President Biden requested that the Secretary of Health and Human Services (HHS) initiate an administrative review of cannabis’s classification under federal law. In June 2022, HHS Secretary Xavier Becerra said HHS and the DEA are aiming to complete a review of cannabis’s federal scheduling status by the end of “this year.” This is an incredibly significant shift, representing the first Presidential request to reconsider the prohibitionist drug policy scheme established in President Nixon’s War on Drugs launched in the 1970s.

There are several potential outcomes of this review: (1) The status quo persists and cannabis remains classified as a Schedule 1 drug under the Controlled Substances Act; (2) Cannabis is rescheduled to a lesser category; or (3) Cannabis is completely descheduled.

How Drugs are Regulated under the Controlled Substances Act

The Controlled Substances Act of 1970 (CSA) created five schedules through which certain drugs are classified. Schedule 1 drugs are considered the most “dangerous”, being that they have been identified as having no currently accepted medical use and a high potential for abuse. Examples include heroin, LSD, cannabis, and MDMA.

Schedule II drugs have high potential for abuse but have a currently accepted medical use. Examples include fentanyl, Adderall, cocaine, and methamphetamine. Schedule III-V are the lesser categories, with consecutively lower relative potentials for physical and psychological dependance. Schedule III includes ketamine and testosterone, Schedule IV includes Xanax and Ambien, and Schedule V includes Robitussin AC and Lyrica.

Schedule I drugs are prohibited in all contexts. Schedule II through Schedule V drugs are legally available exclusively through licensed pharmacies with a doctor’s prescription. Substances such as vitamins, alcohol, and tobacco are regulated outside of the CSA at federal and state levels.

Regulatory Process for Rescheduling Drugs

Per the CSA, a formal rulemaking process led by the attorney general is required to reclassify or deschedule a drug.

Before initiating proceedings to reclassify a drug, the DEA must request a scientific and medical evaluation from the secretary of HHS, as well as the secretary’s recommendations as to whether the drug should be so controlled or removed as a controlled substance. The HHS secretary has delegated the authority to prepare this scientific and medical evaluation to the FDA.

This scientific and medical evaluation involves consideration of several factors about the substance, including:

  1. Its actual or relative potential for abuse
  2. Scientific evidence of its pharmacological effect, if known
  3. The state of current scientific knowledge regarding the drug or other substance
  4. Its history and current pattern of abuse
  5. The scope, duration, and significance of abuse
  6. What, if any, risk there is to the public health
  7. Its psychic or physiological dependence liability
  8. Whether the substance is an immediate precursor of a substance already controlled under this subchapter

Once the FDA provides this evaluation, the HHS secretary then provides recommendations for the appropriate scheduling for the drug. The scientific and medical issues contained in HHS’s recommendation are binding on the DEA. If HHS recommends that the substance not be controlled, the DEA shall not control it.1

Upon receipt of HHS’s recommendation, the DEA may assess the information and initiate proceedings under the Administrative Procedures Act to schedule, reschedule or deschedule a substance under the CSA. In this decision, the DEA considers the same above factors used by HHS.

The DEA Uses its Own Standards to Keep Cannabis Schedule 1

Since cannabis was classified as a Schedule I drug, there have been consistent petitions to reschedule cannabis. Despite these efforts, cannabis has remained Schedule 1, not because the DEA’s arguments are rock solid, but rather because the courts show significant deference to agency interpretations.

DEA says Cannabis has High Potential for Abuse

The CSA itself does not define “potential for abuse”. Rather, the DEA has constructed its own four element definition based on the legislative history of the statute. Specifically, it looks at whether: (1) Individuals are consuming the substance in amounts sufficient to create a hazard to their health or to the safety of other individuals or to the community; (2) there is a significant diversion of the drug or substance from legitimate drug channels; (3) individuals are taking the substance on their own initiative rather than on the basis of medical advice from a practitioner licensed by law to administer such substances, and (4) the substance is so related in its action to a substance already listed as having a potential for abuse, making it likely that it will have the same potential for abuse as such substance, thus making it reasonable that any of the aforementioned elements are likely to occur.2

In short, the DEA clings to its position that cannabis has a “high potential for abuse”, citing the following reasons: (1) Cannabis is the most widely used illicit substance in the U.S.; (2) Preclinical and clinical data show that it has reinforcing effects of drugs of abuse; (3) National databases on actual abuse show that cannabis is the most widely abused drug, including significant numbers of substance abuse treatment admissions; and (4) data on cannabis seizures show wide availability and trafficking.

The DEA’s position may be readily challenged because the four element standard it relies on is not binding. In fact, the legislative history from which the standard comes spoke to only the minimum information necessary to show potential for abuse–it does not address how to assess a substance’s relative abuse potential, which is precisely the DEA’s task under the CSA.

DEA Says Cannabis Has No Medical Use

As above, the CSA does not define what constitutes “currently accepted medical use.” The DEA currently defines accepted medical use as the following: (1) the drug’s chemistry is known and reproducible; (2) there are adequate safety studies, (3) there are adequate and well-controlled studies showing efficacy; (4) the drug is accepted by qualified experts, and (5) the scientific evidence is widely available. Again, as above, the courts have deferred to the DEA’s position that the cannabis plant has no accepted medical use.

The DEA exercises significant discretion in the standard it uses to classify drugs, and the information it uses to make those determinations. Its position, and the classification of cannabis, has remained unchanged due to the courts’ general deference to federal agency decisions on matters that hinge on the interpretation of broad statutory language.

Potential Outcomes of the Biden Administration’s Review of Cannabis

Option 1: Cannabis Remains Classified as Schedule I

It is very much a possibility that the current review into cannabis’ classification under the CSA will result in no policy change whatsoever.

If cannabis remains a Schedule I drug, state-level programs can be expected to persist in opposition to federal law as they do now and the same issues plaguing state-level commercial cannabis industries would continue.

While cannabis as a whole is classified as Schedule 1, it is relevant to note that several cannabis-derived products are FDA approved. Namely, the FDA has approved Epidiolex, which contains a purified form of cannabidiol (CBD) for the treatment of seizures associated with Lennox-Gastaut syndrome or Dravet syndrome in patients 2 years of age and older.

Option 2: Cannabis is Rescheduled to a Lower Category

Rescheduling could mean that cannabis is moved to Schedule II, or lower to Schedules III, IV, or V. At Schedule II, not much would change, although doctors would be able to prescribe cannabis and it would be easier to facilitate medical research on cannabis.

Likewise, rescheduling to a lower category would allow commercial cannabis operators to escape the burden of Section 280e of the IRS Code, which prohibits cannabis businesses from deducting standard business expenses as a result of “trafficking” a Schedule I or II controlled substance. Under the least prohibitive Schedule V, cannabis could be distributed and dispensed without a prescription in certain contexts.

While rescheduling cannabis is a positive and sensible policy move, many argue it does not go far enough. Rather, cannabis policy advocates prefer that cannabis be completely removed from any classification under the CSA.

Notably, rescheduling would not make state-level commercial cannabis programs legal under federal law. Because of the mandatory minimum and maximum penalties for cannabis possession imposed by the CSA, a reduction in criminal penalties is not likely to occur upon the rescheduling of cannabis unless the action is accompanied by a Congressional amendment to the CSA.

Option 3: Cannabis is Completely Descheduled and Removed from the CSA

Completely descheduling cannabis is the policy route most celebrated by cannabis policy advocates. Namely because descheduling cannabis would remove it from the DEA’s scope of authority under the CSA. In a descheduled world, the DEA would have no authority to enforce criminal sanctions for cannabis. This result is the only avenue consistent with the Biden administration’s stated interests of ending the policies which put people–particularly people of color–in jail for cannabis possession.

Some policy folks have concerns that descheduling would turn cannabis into a pharmaceutical product subject to FDA control and regulation. Though, the FDA’s power does not hinge on whether a substance is controlled under the CSA, but rather if it falls under the purview of the federal Food Drug and Cosmetic Act (FDCA), which is not necessarily a given.

Considering the FDA’s relatively lax approach toward CBD after hemp was legalized in 2018, and Congress’ historical passage of appropriation riders restricting enforcement of cannabis regulations, there is reason to be optimistic about the federal government’s possible management of descheduled cannabis.

In sum, rescheduling cannabis would be positive, particularly in that it would increase opportunities to research cannabis and remove the burden of Section 280e for commercial operators. Although, completely descheduling cannabis is the only avenue to remove criminal penalties for cannabis possession and end the era of prohibition.

Congressional Efforts to Decriminalize Cannabis

If the current administrative review of cannabis does not result in a change in classification, its status could be changed through legislative action.

Over the last several years, there have been several pushes to decriminalize cannabis at the federal level and remove it from the CSA via statute. For example, in 2022, the House passed the Marijuana Opportunity and Reinvestment and Expungement Act, which aimed to deschedule cannabis, remove all associated criminal penalties, and establish taxes for retail sales of cannabis. The bill has not been reviewed or voted on by the Senate.

1 21 U.S. Code § 811
2 See Comprehensive Drug Abuse Prevention and Control Act of 1970, H.R. Rep. No. 91-1444, 91st Cong., Sess. 1 (1970) reprinted in U.S.C.C.A.N. 4566, 4603.

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