Three national leaders gathered Wednesday to discuss the impact of the Drug Enforcement Administration's historic move to reclassify cannabis as a less dangerous drug.
Removing marijuana from Schedule 1 – the same class as heroin, LSD, meth and ecstasy – to Schedule III along with ketamine, anabolic steroids and testosterone and an acceptance that the plant has medical value and not a high abuse potential.
A huge win for medical marijuana patients, many cannabis advocates and researchers agree. Another major benefit is that cannabis operators will no longer be taxed under IRS code 280e, which prohibits businesses from deducting normal business expenses. Whitney Economics concluded that cannabis companies paid $1.8 billion in excess taxes due to IRS restrictions in 2022.
More on the impact rescheduling has on communities, businesses and the future of cannabis reform, was discussed by national leaders and industry experts, Howard Sklamberg, former FDA deputy commissioner; Jim Cole, former US Deputy Attorney General and member of the National Cannabis Roundtable and Tahir Johnson, president at Minority Cannabis Business Association and CEO of Simply Pure Trenton.
The discussion was hosted by the Coalition for Cannabis Scheduling Reform (CCSR), NCR and the Minority Cannabis Business Association (MCBA).
‘A Very Big Deal'
The three experts agreed that the tax relief is one of the biggest impacts of marijuana reclassification.
"This action is an important step forward in the rational regulation of cannabis," Sklamberg said. "Its immediate effect, when it is finalized, would be on the finances and having a rational approach to the taxation of cannabis businesses that, like any other business, can deduct their, legitimate business expenses, which is a very big deal."
Cole added that advocates and lawmakers who support reform, the DEA rescheduling is "an important step, but not a final step because rescheduling from Schedule 1 to Schedule 3 does not change cannabis status in FDA’s regulatory framework, which is to say the Food, Drug and Cosmetic Act applies the same way to a substance that is Schedule 3 as it does to Schedule 1, which means there is still regulatory uncertainty."
To hear more from the experts and learn about cannabis rescheduling and the future of the industry, join us at the Benzinga Cannabis Capital Conference this October in Chicago. Hear directly from key industry players and policymakers and ask them your questions. Get your tickets now by following this link, and access a 20% discount using the code JAVI20.
Small Companies Will Also Benefit From Tax Relief
Johnson focused on 280E as an industry problem. "It’s not a large company problem or a small company problem, but one that, by removing it, would have a positive impact on both the MSOs and the small companies alike."
He gave an example, "I think of my partner Wanda James, who’s the 1st African-American cannabis business owner in the country, and she’s been unable to make a profit after being in business for 15 years because of how devastating 280E is. So again, us having the ability to eliminate that allows us to be able to grow our business, make investments in our business and investments in our community."
Big Pharma Shows No Interest
In terms of the FDA, Cole said he does not believe the agency's priorities will change. "And I know there is some fear among some in the industry that oddly, that kind of the rescheduling of cannabis to Schedule 3 would somehow make FDA take more enforcement. And I think that’s, extremely unlikely, to happen. I do not see it, changing its priorities."
Regarding whether cannabis rescheduling will make it easier for the pharmaceutical industry to get into the medical marijuana sector, Sklamberg said he doesn't see that happening. "The fact is that in order for pharma to get involved, they would have to submit new drug applications and go through the process of clinical trials to get approval for a specific indication of a drug. And they have not had any desire to do so in the past. And I don’t think that environment has changed, you know, much at all. And the framework for doing so has not."
See Also: Hemp Advocates Rejoice As Senate Dems Push To Lift Felony Ban In 2024 Farm Bill Proposal
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
