The news set the marijuana world ablaze: U.S. health care regulators are suggesting that the federal government should relax restrictions on marijuana.

In particular, the federal Department of Health and Human Services has recommended removing marijuana from the category of drugs that are considered to have no current medical use and high potential for abuse. The bureau recommended moving the pot from that Schedule I group to the less tightly regulated Schedule III.

So what does that mean, and what are the implications? Read more.

What has actually changed? What happens now?

Technically nothing yet. Any decision about reclassification or rescheduling, in government jargon, is a matter for the Drug Enforcement Administration, which says it will take up the matter. The review process takes a long time and involves gathering comments from the public.

Still, the HHS recommendation is a paradigm shift, and it’s very exciting, says Vince Sliwoski, a Portland, Oregon-based cannabis and psychedelics attorney who curates well-known legal blogs on these topics.

I can’t stress enough how big the news is, he said.

It came after President Joe Biden last year asked both HHS and the Attorney General, who oversees the DEA, to review how marijuana was classified. Schema I’ve legally put it on par with heroin, LSD, quaaludes, and ecstasy, among others.

Biden, a Democrat, supports legalizing medical marijuana for use where appropriate, consistent with medical and scientific evidence, White House press secretary Karine Jean-Pierre said Thursday. It is therefore important that this independent assessment continues.

So if marijuana is reclassified, would it legalize recreational weed nationwide?

No. Schedule III drugs, including ketamine, anabolic steroids, and some combinations of acetaminophen and codeine, are still controlled substances.

They are subject to various rules that allow certain medical uses, and to federal criminal prosecution of anyone who traffics the drugs without authorization. (Even under marijuana’s current Schedule I status, there are few federal prosecutions for simply possessing it: There were 145 federal convictions for that crime in fiscal year 2021, and as of 2022, no defendants were in prison for it.)

It is unlikely that the medical marijuana programs now approved in 38 states, not to mention the legal recreational marijuana markets in 23 states, would meet the manufacturing, registration, prescription, and other requirements for Schedule III drugs.

But a reshuffle on its own would have some impact, especially on research and on marijuana company taxes.

What would this mean for the research?

Because marijuana is on Schedule I, it has been very difficult to conduct authorized clinical trials administering the drug. That has created a kind of Catch-22: there is a need for more research, but there are barriers to doing so. (Scientists sometimes rely on people’s own reports of their marijuana use instead.)

Schedule III drugs are easier to study.

In the meantime, a 2022 federal law was designed to facilitate marijuana research.

What about taxes (and banking)?

Federal tax law prohibits companies involved in the trade of marijuana or other Schedule I or II drugs from deducting rent, payroll, or other expenses that other companies can write off. those with a license do pay taxes to the federal government, despite the ban on marijuana.) Industry groups say the tax rate often tops out at 70% or more.

The deduction rule does not apply to Schedule III drugs, so the proposed change would significantly reduce pot company taxes.

They say it would treat them like other industries and help them compete with illegal competitors who frustrate licensees and officials in places like New York.

You’re going to make these state-legal programs stronger, says Adam Goers, a director of the medical and recreational marijuana giant Columbia Care, who co-chairs a coalition of companies and other players pushing for realignment.

Rescheduling would not directly affect another problem in the cannabis industry: difficulty accessing banks, especially for loans, as the federally regulated institutions are wary of the drug’s legal status. The industry has instead looked to a measure called the SAFE Banking Act. It has repeatedly passed the House of Representatives but has stalled in the Senate.

Are there critics? What do they say?

There are indeed, including the national anti-legalization group Smart Approaches to Marijuana. President Kevin Sabet, a former Obama administration drug policy official, said the HHS recommendation contradicts science, smacks of politics and is a regrettable nod to an industry desperate for legitimacy.

Some proponents of legalization say that rearranging weed is too incremental. They want to keep their focus on completely removing the controlled substances list, which doesn’t include things like alcohol or tobacco (they’re regulated, but that’s not the same thing).

Deputy Director of the National Organization for the Reform of Marijuana Laws, Paul Armentano, said simply reclassifying marijuana would perpetuate the existing divide between state and federal marijuana policies. Minority cannabis business

Association Assn.

President Kaliko Castille said rescheduling the ban would have merely given it a new name, rather than giving all permits and ending decades of arrests that disproportionately attracted people of color.

Schedule III will leave it in this kind of amorphous, sordid middle ground, where people won’t understand the danger of it still being federally illegal, he said.