US Health Department Recommends Cannabis Be Reclassified as Less Dangerous

The U.S. Health Department (the Department of Health and Human Services) has officially recommended that cannabis be moved from Schedule I to Schedule III of the Controlled Substances List. This historic move signifies, among other things, that the leading American health agency no longer views cannabis as a drug with high abuse potential and devoid of medical value.

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Understanding U.S. Drug Schedules

In the United States, drugs, substances, and certain chemicals used to make medications are categorized into 5 distinct schedules based on their acceptable medical use and potential for abuse or dependency.

Abuse Rate as a Determining Factor in Health Department Recommendations

The rate of abuse is a crucial factor in the drug’s classification by the Health Department. For instance, Schedule I drugs have a high potential for abuse and create serious psychological and/or physical dependency. The potential for abuse diminishes across subsequent schedules, with Schedule V drugs having the lowest abuse potential.

What Do Schedule I and Schedule III Mean?

Schedule I drugs are defined as substances that currently have no accepted medical use and have a high abuse potential. Substances classified under Schedule I include heroin, lysergic acid diethylamide (LSD), cannabis, 3,4-methylenedioxymethamphetamine (ecstasy), methaqualone, and peyote.

Schedule III substances have a moderate to low potential for physical and psychological dependency. The abuse potential of Schedule III drugs is lower than that of Schedule I and Schedule II drugs, but higher than Schedule IV drugs. Schedule III drugs include products containing less than 90 milligrams of codeine per dosage unit (Tylenol with codeine), ketamine, anabolic steroids, and testosterone.

The Health Department conducted a scientific study on cannabis in compliance with a directive from President Joe Biden last year.

Health Department Recommends, DEA Decides

The Health Department now informs the Drug Enforcement Administration (DEA), the U.S. drug regulatory agency, that it believes cannabis should be placed in Schedule III of the Controlled Substances Act (CSA). The Health Department recommendation is not binding, and the DEA has the final say. However, the scientific analysis, combined with growing political support for cannabis reform, could well prompt the DEA to make this change.

“In line with the data and science, Health Department promptly responded to President Biden’s directive to HHS Secretary Xavier Becerra and provided its scheduling recommendation for cannabis to the DEA on August 29, 2023,” said an HHS spokesperson to Marijuana Moment on Wednesday. “This administrative process was completed in less than 11 months, reflecting this department’s collaboration and leadership in ensuring a comprehensive scientific assessment was completed and shared promptly.”

Research and Tax Benefits

As a Schedule III substance, cannabis would remain federally illegal. However, this reclassification would have significant implications for researchers who have long criticized the Schedule I classification, which creates significant barriers to access studies.

Moving cannabis to Schedule III would also open up tax opportunities for the cannabis industry that are currently not available. Section 280E of the Internal Revenue Code effectively prohibits taxpayers engaged in the trade of certain controlled substances—like federal-level cannabis trading—from deducting ordinary business expenses or non-Cost of Goods Sold (COGS) related credits.

Political Ramifications of Health Department Recommendations

Politically, moving cannabis from Schedule I to Schedule III would allow President Joe Biden to claim that he has contributed to significant reform, facilitating an administrative review that could result in reclassification more than 50 years after cannabis was placed in the most restrictive category when the federal government launched the war on drugs.

It could also strengthen Congress’s momentum for further federal cannabis law reform. When lawmakers return from the August recess and continue trying to pass cannabis banking legislation, they can cite the HHS recommendation as evidence of the need to normalize the industry.

International Implications

Beyond the obvious example of cannabis reclassification by the Health Department in the country that initiated and sustained global drug prohibition, the international drug control system could also be affected.

United Nations Conventions, which classify drugs using a schedule system similar to that of the United States, have already seen proposals to reclassify cannabis into categories more aligned with science and actual usage patterns—and have already reclassified it to recognize its medical use. With the possibility of its inclusion in a more permissive schedule facilitating its therapeutic and possibly even recreational uses globally?

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