Last month, the Drug Enforcement Agency concluded its hearings related to the reclassification of Cannabis from Schedule I to Schedule III. Analysis as to how it went is limited by restrictions that prohibited live streaming, cell phones, recording devices, or cameras in the hearing room gallery, which only had 20 seats. Hearing transcripts and audio recordings have not yet been released by the Feds.
But thanks to some diligent note taking by members of the pot press, we have some great insight as to how it went, and what’s potentially to come.
Natalie Fertig, who covered the hearings for Cultivated, writes “…two primary questions were at stake: is there any indication for medical usefulness, and how large is the potential for abuse?”
When the hearings were announced, there was some outcry that the DEA wasn’t scheduling testimony from cannabis advocates, and instead would be hearing primarily from cannabis prohibitionists who are against rescheduling.
As Max Jackson, who attended the hearings for Marijuana Moment, explains “…The government…is the proponent of moving cannabis to Schedule III, and carries the burden of proof. All seven designated interested parties oppose rescheduling. DEA designated no pro-rescheduling party at all…. People assume the witnesses testifying about psychosis and cartels and pediatric poisonings are the government’s. But they are witnesses against the government’s own position … .The government put on two witnesses—an FDA-controlled substances official and a pain physician—and rested.”
Jackson cites an ER physician who testified using a slideshow, which sounded…sketchy AF. The doctor “…established that much of her visual evidence came off the open internet with no verified provenance—a toddler-with-a-bong photo from Google, a baby with a pipe from a Reddit parenting subgroup, an astronaut meme she could not source. Asked how she knew the baby in the photo was real, she said she didn’t.”
Won’t someone PLEASE think of the AI-generated children? Also, babies can’t use lighters, so unless they chew on the glass pipe, we are good.
The hearings also heard from Dr. Deepak Cyril D’Souza ,a psychiatrist who argued against rescheduling. Dr. D’Souza has an impressive resume, as Jackson describes him as “…a Yale professor of psychiatry, staff psychiatrist at VA Connecticut, inaugural director of the Yale Center for Cannabis and Cannabinoids and author of more than 200 papers.”
Under cross examination, he confirmed that in an interview he stated that “…the overwhelming majority of cannabis users will have no negative outcome. He agreed not everyone who uses cannabis will have mental health problems, then said most people will not develop psychosis.”
Jackson brings up an excellent point, that one of Dr. D’Souza’s exhibits was based on 10 cannabis studies, going back to 2004. All of these studies utilized a manner that I, nor any of my friends, have ever used – intravenous THC. That’s right, research based upon filling an IV with a precise amount of THC, and then shooting it directly into the bloodstream.
So, what’s next?
The Judge will review post-hearing briefs, and issue a non-binding recommendation to the DEA. He could accept the DEA’s move to reschedule, recommend cannabis be rescheduled but only to Schedule II, or recommend against any rescheduling.
Consensus is that regardless of the outcome, both sides are ready to follow up with lawsuits if things don’t go their way, meaning a final decision could be months or years away.
In the meantime, the only ones benefiting at the moment are companies operating in the licensed medical cannabis space. Those businesses can now prepare to throw off the shackles of 280E, which has disallowed the standard tax deductions offered any other U.S. business. This will cut current effective tax rates of 60-70%.
Those companies can also begin registering with the DEA as Medical Cannabis license holders. Registration allows DEA inspections and regulatory paperwork for those companies to become fully legal. Researchers will see benefits as well as regulations loosen.
For any companies operating in the Adult Use cannabis industry, and those using cannabis, nothing has changed.
While full descheduling remains the goal, and there are legit concerns that big pharma will make a play to control the medical cannabis industry, these hearings are a huge first step.
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