Federal Marijuana Rule Change Could Save Oregon Cannabis Businesses Millions

Move to reclassify pot from the most serious drug category lauded by advocates.

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The federal government appears ready to downgrade marijuana from an illicit substance on par with heroin to one on par with Tylenol with codeine.

Attorney General Merrick Garland on Thursday submitted a Notice of Proposed Rulemaking to the Federal Register, which starts the formal evaluation process of a proposal to reclassify marijuana from a Schedule I drug to Schedule III. Up next is a 60-day public comment period when the Drug Enforcement Administration will also weigh in.

Following the Justice Department’s announcement, the Cannabis Industry Alliance of Oregon touted the news as a “monumental” turning point in federal policy. It’s seen as the first formal recognition by the federal government of the medical, economic and personal benefits of cannabis, according to a statement.

With the rule in effect, it’s likely cannabis businesses in Oregon will be able to claim new deductions, saving potentially millions of dollars, Getlin said. Research into the medical properties of cannabis will also likely increase.

But CIAO president Mike Getlin tells Oregon Business much work remains. Under the rule change, marijuana will remain federally illegal, meaning most banks won’t work with cannabis businesses.

“This is an important step in the right direction, but it’s nothing close to a solution,” he says. “While it does lessen the tax burden for some companies, it doesn’t do anything about the lack of access to capital and a lack of access to the kind of programs that companies rely on.”

“But there’s no doubt it’s going to put a little money back in the pockets of business owners,” he adds.

Also Thursday, a number of Oregon lawmakers announced their support for the proposal including U.S. senators Ron Wyden and Jeff Merkley, and U.S. representatives Suzanne Bonamici and Earl Blumenauer.

“We are one step closer to ending the failed war on drugs,” Blumenauer wrote in a statement. “Marijuana was scheduled more than 50 years ago based on stigma, not science. The American people have made clear in state after state that cannabis legalization is inevitable.”

This support is in line with a global sea change in attitudes toward cannabis. Several nations including Canada and Uruguay have legalized it and many others like Australia and the United Kingdom permit its medical use. The number of Americans who support full legalization has tripled since the 1990s, with nine in ten citizens supporting some form of legalization. Meanwhile, 24 states have implemented some form of decriminalization.

Marijuana has been a Schedule I narcotic drug under the Justice Department’s categorization scheme since 1970. Schedule I drugs like heroin and LSD are considered to be the most dangerous with no accepted medical purpose and a high potential for abuse. Schedule III drugs, on the other hand, are considered to have low to moderate potential for psychological or physical addiction. The change would make marijuana accessible with a medical prescription.

President Joe Biden first called on regulators to reconsider the classification of marijuana in 2022, according to reporting in The Wall Street Journal. The proposed marijuana reclassification was submitted to the White House last month.

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