The U.S. Reschedules Cannabis: What does this mean for local and international cannabis markets?
Article Written by Adam Isaac Miller
In a historic move, President Joe Biden officially confirmed that cannabis will be rescheduled from a Schedule I substance to a Schedule III under the Controlled Substances Act. This decision comes after the Drug Enforcement Administration (DEA) published proposed rules in the U.S. Federal Register on May 21, 2024, to reschedule marijuana.
Moreover, the Department of Justice (DOJ) has taken a significant step in this process. Attorney General Merrick Garland has initiated the 'formal rulemaking process'. The proposed new rules and an official legal opinion from the Office of Legal Council (OCL) have been submitted to the Federal Register, marking the start of a 62-day public comment period until July 22, 2024. The DEA will also consider requests for a public hearing before an administrative law judge until June 20, 2024.
The draft rules suggest that the DEA, which has historically been responsible for determining drug schedules, 'had not yet decided as to its views on the appropriate schedule of marijuana.' This indicates that the Justice Department may have proceeded with the rescheduling process independently of the DEA's stance on the matter.
While the process typically spans several years, there are indications that President Biden may have expedited it to ensure a decision is reached before the November election. The news has been met with positive reactions from cannabis stocks across the U.S. and Canada. However, it's important to note that some uncertainties still linger, requiring vigilance and careful observation.
Here are several items worth considering regarding their impact on domestic and international markets.
Domestic Implications
Regulatory Changes: Rescheduling to Schedule III recognises cannabis as having a lower potential for abuse and accepted medical use. This shift will allow for more research into the plant's medical benefits and potentially pave the way for developing new pharmaceutical products.
Medical Accessibility: Patients will benefit from improved access to medical cannabis, as doctors may be more willing to prescribe it, and insurance companies could potentially cover it because of rescheduling.
Legal and Judicial Impact: The legal framework surrounding cannabis will change, impacting various aspects such as criminal charges and sentencing. This shift could alleviate the burden on the criminal justice system and address specific issues related to the war on drugs.
Economic Impact: The rescheduling will further boost the growing cannabis industry, creating more jobs, business opportunities, and tax revenue.
Public Health: With increased research and regulated medical use, there will be a better understanding of cannabis and safer consumption practices.
International Implications
Global Drug Policy Influence: As a significant player in international drug policy, the U.S.'s decision to reschedule cannabis will likely influence other countries to reevaluate their drug laws.
Trade and Commerce: Rescheduling will open international commerce opportunities for cannabis and related products, subject to compliance with international laws and agreements.
Research Collaboration: Enhanced research in the U.S. will lead to increased international collaborations and the sharing of scientific knowledge related to cannabis.
Shift in UN Drug Policy: Rescheduling in the U.S. could prompt a revaluation of the international regulation of cannabis under drug control conventions, potentially resulting in global regulatory changes.
Caveats
State vs. Federal Laws: State laws regarding cannabis will not automatically change with federal rescheduling, although they may be influenced.
Complex Implementation: The impact will depend on how the rescheduling is implemented and regulated.
Public Opinion and Cultural Shifts: Public opinion in the U.S. and internationally will be crucial in how these changes are received and integrated into societies.
International Treaties: Due to the U.S.'s participation in various international drug control treaties, the rescheduling process and its wider implications could be complex.
GMP Catch-up: Because FDA GMP is not internationally recognised worldwide, companies may need international audits, which can take years to coordinate and implement, meaning U.S. companies will not be able to export immediately. GACP, on the other hand, is a different story and could lead to shorter export timelines.
The rescheduling of cannabis in the U.S. signifies a tectonic shift in drug policy, with far-reaching implications for legal, economic, medical, and cultural aspects both domestically and internationally. As the formal rulemaking process begins, the world watches closely to see how this historic decision will unfold and shape the future of cannabis policy globally.
Adam has spent over eight years working with unregistered medicines. With a specialization in Cannabinoid Therapeutics, Adam has supported the development, implementation, and market entry of multiple cannabinoid product portfolios in markets such as Australia, New Zealand, Germany, and Brazil. Before working in the medical cannabis field, Adam spent almost a decade building various B2B businesses within education, investment, and medicinal cannabis, with progressive roles including business development, strategy, product development, and project management. He has consulted private and listed cannabis producers and ancillary businesses since 2015 as one of the early entrants and experts in the burgeoning Australian cannabis industry. Adam founded and sat on the board of The Medical Cannabis Council, Australia’s first not-for-profit industry body. He is a frequent public speaker and publishes a widely read industry newsletter. Adam earned a Bachelor of Entrepreneurship from the Royal Melbourne Institute of Technology. Adam has appeared in several major news outlets, including the Sydney Morning Herald, The Australian Financial Review, Nine News, Startup Smart, SBS, SkyNews, MJBizDaily, and other major publications.
Disclaimer: This information is shared with a global readership for educational purposes only and does not constitute medical or business advice. All patient-related information has been de-identified OR fictional to protect privacy. Nothing in this article is intended to promote the use or supply of medical cannabis to members of the public.