Opinion: Marijuana rescheduling is positive, but we must go further and faster

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Michael Cooper (Photo courtesy of NCIA)

Rescheduling marijuana is positive news in an industry desperate for good news.

But make no mistake, it is not enough.

We must go further – and faster – on marijuana reform.

By now, everyone in the regulated cannabis industry has likely heard that the U.S. Department of Health and Human Services (HHS) finally surrendered its indefensible position that marijuana belonged on Schedule 1 of the Controlled Substances Act.

That classification meant, in the eyes of federal officials, that marijuana had “no currently accepted medical use … a lack of accepted safety for use under medical supervision and a high potential for abuse.”

Advocates, along with the American public, have spent years urging policymakers to reconcile that position with reality.

Even in these polarized times, 89% of respondents in a recent Pew Research poll said medical cannabis should be legal.

While we might be accustomed to consensus on medical cannabis (outside of Washington DC, of course), we should not overlook how rare this level of support is.

But the fight isn’t over.

Rescheduling, if it were to happen, does not accomplish everything the industry needs. As a result, we cannot become complacent.

Instead, the industry must call for the following three immediate actions:

  • Relief from Section 280E of the federal tax code.
  • Protections for state-regulated businesses.
  • Fully descheduling marijuana with comprehensive reform.

Relief from 280E

Retroactive relief from Section 280E must be provided to businesses in the state-regulated cannabis industry.

It is excellent that the absurd application of 280E to the state-regulated cannabis industry will end when marijuana moves to Schedule 3.

But fixing this issue going forward is not enough for Main Street operators who responded to the will of the voters and provided essential products for years while bureaucrats dragged their feet.

Make no mistake: For most operators – those without access to deep pools of Wall Street capital – the tab for 280E is a financial sword of Damocles hanging over their heads.

These small businesses need relief, and they need it now.

Accordingly, we must work with our champions in Washington DC to grant retroactive 280E relief to state-regulated small cannabis businesses as part of comprehensive reform.

We also must call on our allies to prevent the IRS from seeking to apply 280E to any state-licensed cannabis business in the interim.

These small businesses should not be punished for HHS’ delay in recognizing that marijuana never belonged on Schedule 1.

Protections for state-regulated businesses

We must call on the U.S. Food and Drug Administration and Department of Justice to issue statements that neither agency will enforce the Controlled Substances Act or the Federal Food, Drug and Cosmetic Act against businesses producing marijuana in compliance with state regulations.

Operators and consumers in state markets following those rules should not need to worry that rescheduling will create roadblocks to access to regulated, tested products.

Fully descheduling with comprehensive reform

Building off of these interim measures, we must continue to work tirelessly toward the only just outcome: full descheduling and comprehensive marijuana reform to allow Americans to access regulated, tested and taxed cannabis products.

The industry needs a commonsense, practical federal reform plan that does not seek to reinvent the wheel or cause unnecessary delays.

I was involved in the drafting of one such road map for comprehensive marijuana reform and provided detailed feedback to offer an industry perspective on legislative efforts.

Others will undoubtedly propose their own visions – hopefully allowing us to have a serious discussion about the most effective path forward.

What is beyond debate, however, is that it’s time for Congress and the Biden administration to follow the will of the American people.

Rescheduling marijuana brings many positive developments, but it is also not enough – particularly for the Main Street cannabis operators struggling with high taxes, high costs and a resurgent illicit market.

As an industry, the message to our allies must be clear:

Thank you for this step, but struggling small businesses need you to go further and faster on marijuana reform.

Michael Cooper is the co-founder of New York-based MadisonJay Solutions as well as the board secretary and policy co-chair for the Washington DC-headquartered National Cannabis Industry Association. He can be reached at mcooper@madisonjaysolutions.com.

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