UPDATE: President Donald Trump has just signed an executive order reclassifying marijuana from a Schedule I drug to a Schedule III drug, a pivotal shift that could reshape the cannabis industry and medical research landscape. This urgent development, announced on October 5, 2023, will allow for easier access to cannabis for medical use and research, marking a significant softening of federal regulations.
During the signing ceremony in the Oval Office, Trump stated, “This classification order will make it far easier to conduct marijuana-related medical research, allowing us to study benefits, potential dangers, and future treatments.” This change is especially vital for states like Michigan, where the cannabis industry is rapidly evolving.
According to experts, the reclassification could open new avenues for research on the medical benefits of cannabis. Hillary Marusak, an associate professor at Wayne State University, emphasized the challenges faced by researchers, noting, “It’s still illegal at the federal level.” She described marijuana as a promising treatment for conditions like anxiety, PTSD, and pediatric epilepsy.
At the forefront of the cannabis market, New Standard Cannabis manager Natalia Cardenas shared her personal experience with marijuana’s therapeutic benefits, stating, “I have always been a little more prone to depression.” She highlighted how cannabis products help customers suffering from various ailments, saying, “Back pain, knee pains, and now we have topicals for them.”
While experts praise the move, there are concerns about the need for increased federal funding for cannabis research. Marusak cautioned that while the reclassification is a step in the right direction, it may not significantly change research dynamics without additional financial support.
Major Tax Relief Ahead?
One of the most immediate impacts of this reclassification involves changes to Section 280-E of the IRS tax code, which currently restricts cannabis companies from deducting common business expenses. Nick Hannawa, chief legal counsel at Puff Cannabis Company, explained, “We can’t write off anything other than the cost of goods.” He anticipates that the new classification could save cannabis companies “millions and millions of dollars” by allowing them to operate like any other business.
However, Hannawa also warned that this executive order does not legalize marijuana at the federal level. “The compliance costs of banking cannabis is high, and that’s kept a lot of banks out of it,” said Ross Sloan, senior vice president for cannabis banking at Dart Bank. He believes it will take time for the industry to see changes in banking practices.
Political Pushback
Despite the executive order, several Republican lawmakers have expressed disapproval. Senator Cynthia Lummis from Wyoming stated, “I quite frankly disagree with the president on that one.” Other senators, including John Hoeven of North Dakota and Lindsey Graham of South Carolina, echoed concerns, highlighting the potential risks associated with marijuana use.
As the cannabis industry navigates these new waters, all eyes are on the potential passage of the SAFER Banking Act, which aims to ease banking restrictions for cannabis companies. This legislative change could be key in helping the industry expand and thrive in a newly regulated environment.
With this executive order, the landscape for cannabis in the United States is shifting rapidly. Stakeholders from researchers to business owners are watching closely as the implications of this significant policy change unfold. What happens next could redefine the future of cannabis in America.
Stay tuned for more updates as this story develops.
