In response to news reports that the Drug Enforcement Administration (DEA) will move cannabis from Schedule I down to Schedule III under the Controlled Substances Act, US Cannabis Council Executive Director Edward Conklin released the following statement:

“The US Cannabis Council strongly supports the move by the DEA to reclassify cannabis at a lower level under the Controlled Substances Act. President Biden and his Administration should be commended for recognizing that cannabis was wrongly classified as a Schedule I controlled substance and pursuing an administrative review to reclassify it.

“The proposed DEA rule implements the recommendations of the Department of Health and Human Services, which were based on an extensive scientific review by the Food and Drug Administration. Once finalized, the reclassification of cannabis to Schedule III will mark the most significant federal cannabis reform in modern history and place the nation on a clear path toward our ultimate goal of federal legalization.

“Reclassifying cannabis at Schedule III will transform the nation’s cannabis industry by ending the onerous 280E tax penalty. Under federal law, regulated cannabis operators are prevented from deducting standard business expenses–including rent and payroll–from their taxes. This results in an effective tax rate north of 70% for many operators.

“Under the status quo, it is challenging to merely break even as a regulated cannabis business. Moving to Schedule III will boost cannabis businesses of all sizes – particularly independent and social equity operators – and make the regulated market much more competitive with the larger illicit market. The net effect will be that more Americans will legally purchase cannabis from licensed retailers that enforce age restrictions and sell safe, high-quality products.

“More broadly, the DEA’s proposed rule would provide a range of benefits by recognizing the therapeutic value and low abuse risk of cannabis while signaling to the criminal justice system that cannabis should be a lower priority. Most importantly, it will mark a formal end to the more than 50 years that cannabis has been improperly classified as Schedule I–alongside heroin–and placed at the center of our nation's destructive drug war.

“Moving to Schedule III represents a tectonic shift in our nation’s drug laws. The US Cannabis Council is committed to ending federal cannabis prohibition, and we believe that reclassification is a necessary and critical step toward that goal. In the coming days, we will submit comments to the DEA in support of the proposed rule.”