As marijuana rescheduling has gained traction in Congress and DEA has announced it will rule on a rescheduling this summer, a common concern has emerged in the cannabis reform community and among industry actors. It goes something like this: "If marijuana is moved to Schedule II, the Feds will shut down our state's legal system." The worry is that this administrative change will make marijuana pharmaceuticals legal and thus require all such products to be removed from the market until FDA approval is granted. And of course, clinical drug testing and FDA approval often takes years and hundreds of millions (if not more) dollars in research—something cannabusinesses can't afford and time medical marijuana patients don't have.
Alas, these concerns are overstated. Rescheduling will not shut down the thousands of existing medical (or for that matter recreational) grows, processing facilities and dispensaries that serve people in about half of the U.S. There are a few reasons why this is the case and we will discuss each.
I. The legal authority keeping marijuana enterprises open has nothing to do with schedulingThe scheduling of drugs in U.S. comes from authority vested in the Congress and the executive branch under the Controlled Substances Act of 1970. Under this law, Congress or the relevant federal agencies make determinations about substances based on their medical value, safety for medical treatment, and likelihood of abuse. Under that law, the government assigns a drug to a schedule and has the power to reassign a substance to a different schedule (rescheduling).
The Controlled Substances Act does not authorize state-approved and regulated marijuana enterprises to remain open. In fact, the CSA explicitly outlaws any such enterprise. The authority under which cannabis enterprises continue to operate, despite the substance's "absolute" prohibition under the CSA, is a series of memoranda issued by the U.S. Justice Department. These memos—the Cole and Ogden Memos—allow state-approved, heavily regulated operations to exist, so long as they do not violate certain areas of DOJ’s concern, such as selling to minors or engaging with drug cartels.
These memos are executive actions that assert a Supreme Court-approved power of the presidency: enforcement discretion. Enforcement discretion allows the president and officials in the administration to make choices--priorities--about how and under what circumstances laws will be enforced. The Obama administration has de-prioritized the enforcement of the CSA for marijuana in certain states under certain conditions. Nothing will change with regard to these memos if marijuana were rescheduled.
Furthermore, it is highly unlikely that the FDA would ever approve smoked, whole flower marijuana, even after rescheduling. Instead, cannabis pharmaceuticals will come in the form of tablets or liquids, made by isolating individual cannabinoids or compounds of cannabinoids. Currently, FDA has approved trials for two cannabis based drugs—Sativex and Epidiolex—that do exactly that. Worry exists that since FDA won't allow whole flower marijuana, the existing system of grows and dispensaries will be closed. However, as explained above, FDA is not the entity that allows those grows and dispensaries to remain open and would have no power to reverse the administrative carve out currently allowing marijuana businesses to remain open.
II. If the federal government is ok with a Schedule I substance being sold in the states, they'll be fine with Schedule II.
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