President Trump Reclassifies Marijuana to Less Strict Category
A significant change in the way that marijuana is controlled in the U.S. made headlines last week after President Donald Trump ordered that the drug be put under a less dangerous federal classification. Here is a look at this change in classification and what it means for the marijuana industry and users.
Marijuana Reclassified to Less Dangerous Schedule III Substance
President Trump signed an executive order on December 18, mandating that marijuana be reclassified to a lower level of danger. The mandate marks the biggest change for the drug since 1970. The order places marijuana under the designation of a Schedule III drug. The U.S. Drug Enforcement Administration (DEA) describes Schedule III substances as having a "moderate to low potential for physical and psychological dependence."
Prior to the recent change in classification, marijuana had been listed as a Schedule I drug, a category that includes the most dangerous substances. For instance, heroin, ecstasy, and LSD are Schedule I drugs. The DEA describes these types of drugs as having "no medical use and a high potential for abuse."
Trump was clear to state that the order does not translate to the legalization of the drug. He also said that its reclassification is not meant to sanction the use of marijuana as a recreational drug.
The order directed U.S. Attorney General Pam Bondi to reclassify the drug. The order also stated that the Trump administration will work alongside Congress to redefine cannabinoid products derived from hemp in an effort to provide greater access to CBD.
While the order does not make the drug legal at the federal level, the reclassification could translate to lower tax burdens for those in the industry. The change is also likely to improve access to CBD products for Americans while also boosting research into the benefits and risks of the drug.
Companies that make Schedule III drugs see benefits in tax breaks, as opposed to no tax benefits for those that make Schedule I drugs. However, companies will still not be allowed to sell these products across state lines unless the U.S. Food and Drug Administration (FDA) approves the use of marijuana for medical purposes.
Not surprisingly, shares of cannabis firms shot up in premarket trading on December 18 ahead of the announcement. For example, shares of Tilray were up by almost 5%. SNDL rose 3%, Canopy Growth increased by over 5%, and AdvisorShares Pure U.S. Cannabis jumped by 6.5% before the opening bell.
It is also being reported that the president is considering the implementation of a Medicare pilot program designed to give seniors access to CBD. Providing Medicare coverage is expected to attract more investments into CBD, further increasing the economic impacts of the substance.
Marijuana Regulation at the State Level
Despite being classified as a Schedule I drug until now, almost all states allow marijuana to be used medically or recreationally. In addition, a recent Gallup poll indicates that almost two-thirds of all Americans support the legalization of marijuana. This number is up from 36% just two decades ago, demonstrating how attitudes toward the drug have changed significantly in recent years.
Although most Americans are on the same page about the legalization of marijuana, the move to decriminalize the use of the drug remains controversial. For example, Ohio Gov. Mike DeWine noted that he would sign legislation that was approved earlier this month restricting where marijuana can be grown in the Buckeye State. Local businesses are now suing the governor over a ban on over-the-counter products infused with THC.
Former President Joe Biden made moves to try to reschedule the drug while he was in office. Biden ordered the Department of Health and Human Services (DHS) to review the drug's classification in 2022, proposing a rule to reschedule it in 2024.
Trump has been in support of making these changes to the marijuana landscape for a few years. The president threw his support behind a failed ballot measure in Florida that would have legalized the substance in that state. Most recently, he told reporters in August that he was investigating the possibility of reclassifying marijuana.
Critics of the president note that his views on marijuana are not consistent with his overall approach to drug enforcement against cocaine and fentanyl. The Trump administration has ordered an assault on alleged drug boats off the coast of Venezuela in recent weeks in an effort to reduce the flow of illegal substances into the U.S.
Proponents of removing all of the barriers to marijuana are hopeful that the latest change at the federal level will work to remove the stigma associated with the substance.
Looking for stories that inform and engage? From breaking headlines to fresh perspectives, WaveNewsToday has more to explore. Ride the wave of what’s next.