In a significant development, US health officials have recommended easing restrictions on cannabis. A top official from the Department of Health and Human Services (HHS) has written to Drug Enforcement Agency (DEA) Administrator Anne Milgram, suggesting that cannabis be reclassified as a Schedule III drug under the Controlled Substances Act.
This recommendation, dated August 29, has been confirmed by a DEA spokesperson, who also stated that the agency would initiate its own review.
This move is a monumental step towards acknowledging the legitimate uses of cannabis. It could potentially expand the cannabis market across the country and reduce the taxes that cannabis businesses pay. It’s a clear sign that the era of stigmatizing cannabis is coming to an end, and a more scientific approach is taking its place.
The Impact on Cannabis Stocks and the Market
The news has already had a significant impact on the stock market. The MJ PurePlay 100 Index, which tracks cannabis stocks, rose by 13%, and individual companies like Columbia Care Inc. gained 39%, while Ayr Wellness Inc. climbed 29%.
This is a clear indication that the market is optimistic about the future of cannabis, and it’s a win for individual investors who have been backing these stocks.
President Joe Biden had previously rolled out initiatives focused on easing penalties associated with cannabis use, including pardoning all prior federal offenses of simple possession. This new recommendation from HHS adds another feather to his cap, especially with the upcoming elections.
The Science Behind the Decision
The recommendation from HHS was based on an extensive review by the Food and Drug Administration (FDA). The FDA considered eight factors that determine the control status of a substance and recommended that cannabis be placed in the Schedule III category.
The National Institute on Drug Abuse agreed with this recommendation. This scientific evaluation was completed in less than 11 months, showing the urgency with which the federal government is acting on this issue.
However, some advocates believe that the recommended re-scheduling doesn’t go far enough.
The National Cannabis Industry Association CEO, Aaron Smith, stated that the only way to fully resolve the issues stemming from the federal conflict with state law is to remove cannabis from the Controlled Substances Act altogether.
The Road Ahead – A Modern and Scientific Approach
While the recommendation is a significant step, it’s not the end of the road. Rescheduling cannabis as a Schedule III substance would make research easier and give beleaguered cannabis companies a tax break.
However, it won’t align federal law with the 38 states that allow it for medical use and the 23 states that allow it for recreational use.
Nevertheless, it’s a huge day for the cannabis industry, and there is hope that the federal government will follow through on their recommendation.
