The average American's attitude toward cannabis has changed to a more favorable one over the years. Now, the federal government's stance reflects that shift, moving the plant from the most tightly controlled substances like heroin to less restrictive drugs alongside less dangerous drugs like Tylenol, which contains codeine. We are planning to reclassify the classification.
This is important because for the first time, the Drug Enforcement Administration and the Department of Health and Human Services agree that marijuana has potential medical benefits and a low potential for abuse. It could go a long way toward reducing stigma against the drug, impact cannabis research, and potentially pave the way for financial relief for New York cannabis businesses.
Pot rescheduling would not be legal at the federal level. And since the state's legal market is already open, things won't change much for New York cannabis businesses. But it opens the door to big profits for New York cannabis businesses, which have operated under stricter rules and financial restrictions than most companies.
Others are also reading…
“This is a positive step,” said Chris Alexander, executive director of the New York State Cannabis Control Board.
However, there is a lot of confusion about what rescheduling cannabis does and does not mean.
And while it's too early to tell exactly what ramifications a rescheduling will have, here are some ways that rescheduling cannabis could change things.
Cannabis consultant Anna DiNoto works behind the counter at Honey, a new licensed cannabis dispensary on Delaware Avenue in Kenmore.
Derek Gee, Buffalo News
How will business change for New York state-licensed pharmacies? The schedule changes are expected to have a significant impact on those in the cannabis business. Because it frees you from a scary section of the Internal Revenue Code called 280E. This provision prohibits companies from deducting ordinary business expenses related to the trafficking of Schedule I or II substances. Even if those substances are legal in the states where they operate, like New York.
“Typically, things like rent, utilities and other normal costs of operating a business or retail business are not really deductible, so we are taxed at a much higher rate than any other industry we trade in. on a regular basis,” Mitzi Keating, a certified public accountant and partner at accounting firm Citrine Cooperman, said at a forum held by cannabis law firm Vicente LLP.
Removing cannabis from the more restrictive Schedule I classification would also allow cannabis companies to benefit from federal tax credits available to other businesses, such as the Research and Development Credit and the Work Opportunity Credit.
Keating said cannabis businesses can also take advantage of deductions such as bonus depreciation and other useful measures such as accelerated depreciation, all of which can help companies reduce costs.
“Investment in fixed assets will be encouraged, [allow] Our manufacturers and growers will be able to really look at their business from a tax planning perspective. [It] “There will certainly be significant savings for these customers as they move into a world where they don't have these onerous tax obligations,” she said.
Does this mean recreational marijuana will be legalized by the federal government? Simply rescheduling cannabis does not make it legal. After all, you can't just walk into a store and buy anabolic steroids or other Schedule III drugs like ketamine. The schedule change would make people who grow, buy and sell marijuana subject to federal prosecution.
Because of this, many argue that the schedule changes aren't enough and are calling for a complete postponement of cannabis. By moving marijuana to Schedule III, adult-use dispensaries in New York would continue to operate outside of federal law, even though the federal Drug Enforcement Administration largely leaves states that have legalized marijuana alone.
“Reclassifying cannabis is a necessary and long-awaited step, but it is not the end of the story. We hope Congress wakes up and passes the cannabis reform that most Americans have been asking for for years. It's past time for Congress to catch up with public opinion and catch up with science,” Senate Majority Leader Chuck Schumer said on the Senate floor earlier this month.
Mr. Schumer used this opportunity to reintroduce the Cannabis Control and Opportunity Act, which would decriminalize marijuana and transfer federal oversight of marijuana from the DEA to the federal Bureau of Alcohol and Tobacco Tax and Trade. Records of low-level marijuana offenders would also be expunged. This bill has 18 sponsors.
“We can no longer tolerate the tragedy of a young man being arrested for having a small amount of marijuana in his pocket,” Schumer said. “Over the years, even a small amount of marijuana can result in a serious criminal record that prevents a person from getting a good job, buying a good home, or getting promoted.”
How will it impact research? Schedule I drugs, such as heroin, are considered to have no recognized medical value and are subject to the most restrictions. This classification has long hampered efforts by universities and scientists to study the plant, making it difficult to access cannabis and obtain research funding, and making it difficult or impossible to study the beneficial or harmful effects of cannabis on the human body. It's possible.
Researchers at the University at Buffalo say rescheduling cannabis could change the game and enable research that was previously out of reach.
Rebecca Ashea, an associate professor of psychology in UB's College of Arts and Sciences, said the revised schedule would allow for rigorous, randomized, controlled studies. The researchers also had to rely on cannabis from the National Institute on Drug Abuse, which typically has a much lower THC content than what is commonly available.
But the delay does not extend to federal legalization, so some questions will still remain, said R. Lorraine Collins, director of UB's Center for Cannabis and Cannabinoid Research. Experiments that require administering cannabis products to humans will be closely scrutinized, she said.
Have there been any schedule changes already? Not yet, and it will take some time.
For the first time, President Biden has called for a review of federal cannabis laws in 2022. That same year, he issued an executive order pardoning many federal and D.C. offenses for simple marijuana possession offenses and urged state governors and local leaders to do the same.
The White House Office of Management and Budget must approve the DEA proposal, which is recommended by the federal Department of Health and Human Services. There will then be a public comment period.
“It's going to take some time,” Alexander told OCM. “Everyone was excited, but it's probably going to take a year or so.”
