A guide to what’s changing — and when: NPR

President Trump’s long-awaited executive order to ease U.S. restrictions on marijuana promises to bring immediate relief to cannabis businesses — but only in some ways. And while its reclassification as a lower-risk drug is being touted as ushering in a new era for cannabis research, experts say it’s not as simple as flipping a switch.

“It’s hard to see headlines like, ‘Marijuana postponed until [Schedule] III; marijuana research is going to open up,” says Gillian Schauer, executive director of the Cannabis Regulators Association, which includes agencies in 46 states. “You know, these things aren’t true right now.”

Indeed, Trump’s December 18 executive order alone is not enough to rewrite federal drug policy that has existed for more than 50 years.

“The Controlled Substances Act [of 1970] does not grant any president the authority to unilaterally reschedule a drug,” Schauer said. Such changes are historically made either through a rulemaking process or an act of Congress.

Many details will shape how the administration implements Trump’s order, affecting the timing and scope of easing marijuana restrictions. But when that happens, rescheduling won’t automatically repeal federal laws targeting marijuana, and interstate commerce in marijuana will remain illegal, Schauer says.

It is not yet clear how other policies might change.

“We don’t know what will happen to federal drug testing requirements,” Schauer says, until agencies issue guidelines.

Here’s a look at other key issues raised by the rescheduling order:

The time frame depends on the path taken by the DOJ

Trump’s order directs Attorney General Pam Bondi to “take all necessary steps to complete the rulemaking process related to the relisting of marijuana to Schedule III” of the Controlled Substances Act “in the most expeditious manner consistent with federal law…”

The directive evokes the process begun under former President Joe Biden. Under his administration, the Department of Health and Human Services and the Department of Justice advanced a proposal to reclassify cannabis from Schedule I, meaning it has no medical use and a high potential for abuse, to the lower-risk Schedule III, which includes ketamine, Tylenol with codeine and anabolic steroids.

The Trump administration could resume the process already underway under Biden. But the new executive order’s mention of Section 811 of the Controlled Substances Act hints at a potential shortcut.

“This allows the attorney general to move a drug on the schedule he or she deems most appropriate, without going through the usual steps needed to reschedule a drug,” Schauer says.

The streamlined process was intended to ensure that the United States could do things such as comply with international drug treaty obligations. But historical precedent also links it to cannabis: in 2018, it was used to program the CBD epilepsy drug Epidiolex, months after it became the first purified marijuana-derived medicine authorized in the United States. The drug was included in Annex V, the least restrictive annex.

On December 18, President Trump posted an executive order in the Oval Office reclassifying marijuana as a less dangerous drug.

Evan Vucci/AP

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Evan Vucci/AP

Will the DOJ seek public comment?

The Trump administration’s approach to administrative hearings and public comment periods would also help determine the pace of reprogramming.

“I anticipate that if they use this [expedited] option, that we wouldn’t see a comment period,” which would shorten the process, Schauer says.

But rescheduling could take longer if the Justice Department follows the traditional, time-consuming notice and comment process.

Again, Bondi has options that could speed things up. It could choose to publish a final rule after a public comment period, for example, or to do so without a comment period.

“Part of the calculus for this might be legal,” says Schauer. Noting that some anti-marijuana groups are vowing to file lawsuits to block the postponement, she adds that the DOJ will likely have to balance Trump’s call for expediency with the need to defend his actions in court.

If the rule is released for comment, interest would likely be intense: In 2024, the DEA’s proposed rescheduling rule for marijuana has attracted more than 43,000 comments.

Cannabis Companies Would Get Tax Break, But Credit Cards Remain Banned

Sam Brill, CEO of Ascend Wellness Holdings, a multistate dispensary company, says rescheduling could bring a cascade of positive changes to his industry. But a benefit could come immediately, he says.

“The biggest thing that’s happening overnight is 280E, the punitive and restrictive tax code that’s being imposed on us,” would no longer apply to marijuana businesses, he says.

Like other businesses, Brill’s company is required to pay income taxes. But because their primary product is a Schedule I drug, the IRS says that under Section 280E of the Internal Revenue Code, they cannot claim common tax deductions, exposing them to a higher effective tax rate.

Section 280E “doesn’t allow us to essentially deduct normal expenses that everyone can deduct,” Brill says. “I can’t deduct the rent on my stores, the cost of my employees in those stores, my interest expenses.”

Brill says some cannabis companies, including his own, argue that 280E should not apply to them — but the IRS disagrees. As a result, Brill says, his company sets aside a large contingency fund in case the IRS comes after them.

“For 2024 alone, the value of that reserve” was about $38 million, Brill says, “which includes interest and penalties.”

Brill hopes the change in marijuana’s status could eventually lead to the removal of other restrictions, including the inability of cannabis operations to accept credit cards. Most financial institutions refuse to provide basic banking services to state-licensed marijuana businesses, due to potential liability.

“Not using a credit card is really one of the biggest challenges for customers,” he says. Citing the importance of payday, Brill says, “For us, Friday is by far the most important day of the week because it’s a cash business. »

Medical research

Scientists welcomed news in 2023 that the Biden administration was moving toward reclassifying marijuana, and Trump says the move will boost medical research. But then as today, there are warnings.

One advantage of the new rules is that they will not require marijuana researchers to go through the onerous process of obtaining a Schedule I license, and they would also relax rigorous laboratory regulations.

“You have very strict requirements, for example, for storage and security and reporting of all these things,” neuroscientist Staci Gruber, of McLean Hospital in Massachusetts and Harvard Medical School, told NPR last year.

But another obstacle promises to be more stubborn: finding marijuana to study. The United States requires researchers to obtain marijuana from a handful of sources, which itself is an improvement over the decades when they were forced to rely on a facility based at the University of Mississippi.

And, as Schauer notes, federal rules regarding the supply of marijuana were decided separately from the controlled substance schedule.

“It makes research a little easier,” Schauer says of the current reprogramming effort. “But there will still be many challenges in cannabis research unless many agency policies change and adjust.”