Why Rescheduling Marijuana Won’t Save the Marijuana Industry

The Drug Enforcement Administration (DEA) is poised to move Marijuana from Schedule I to Schedule III under the Controlled Substances Act (CSA), putting it on par with ketamine and some anabolic steroids instead of heroin and LSD. The move would reduce restrictions on the drug, but as Marijuana Law expert Robert Mikos argues in a new paper, rescheduling will not save the marijuana industry from many of the challenges it faces today.

In his paper “The False Promise of Rescheduling,” forthcoming in the Tulsa Law Review, Mikos highlights two limiting factors with this move:

Rescheduling is contingent on a novel interpretation of the CSA’s scheduling criteria. Historically, the DEA has insisted that a Schedule I drug may only be moved off that schedule if there are Randomized Control Trials (RCTs) that prove the drug is effective at treating some medial condition. No RCTs to date have demonstrated such efficacy for marijuana.

In 2023, the Department of Health and Human Services (HHS) broke from past practice and recommended that Marijuana be reclassified as a Schedule III drug despite the lack of RCTs. The Biden Administration DEA appears willing to follow suit.

But while this change in interpretation may work at the moment, there’s no guarantee that future Administrations will take the same lenient approach. ”It is easy to see why the DEA would strongly disagree with HHS’s change of standards for CAMU,” either now or in the future, Mikos writes. As Mikos explains, if Joe Biden loses the fall 2024 election, nothing would prevent a new Trump Administration from quickly moving marijuana back to Schedule I.

Schedule III drugs are still subject to significant restrictions imposed by the law. “Even assuming marijuana is rescheduled and stays off Schedule I, the change still will not significantly improve the fortunes of the marijuana industry,” the paper states.

Schedule III regulations, would, among other things, prohibit the sale of marijuana for non-medical use and require firms to register with the DEA and only buy marijuana from and sell marijuana to other DEA-registered firms. Punishment for non-compliance would also remain the same. “I suspect that few (if any) of the more than 12,000 firms now licensed by the states to produce and / or sell marijuana will be able and willing to scrupulously comply with all the new regulations the CSA will throw at them,” Mikos writes.

Moreover, the Food Drug and Cosmetic Act (FDCA) would still regulate the sale and marketing of drugs across state lines. It bans the interstate sale of drugs that the FDA has not found to be safe and effective, regardless of scheduling under the CSA. While HHS dropped the RCT testing requirement for rescheduling, it explicitly did not drop that requirement for the FDCA. “FDA approval of marijuana remains a long way off because the drug approval process remains as demanding as ever,” Mikos writes.

This makes it “virtually impossible” for state-licensed marijuana firms to comply with the FDCA, even if they do not sell their products across state lines. The FDA has claimed that the FDCA applies to any drug with components sourced out-of-state. “I suspect most finished marijuana products now on the market include some component that was sourced out of state, even if the marijuana itself was grown locally,” Mikos writes. “Think of rolling papers, glass vape cartridges, ethanol used to extract hash oil, containers used for packaging, and so on.”

According to Mikos, recognizing the limited impact of rescheduling holds an important lesson for marijuana reform advocates: meaningful reform must come through Congress. “No agency has the power to dismantle the tangled web of federal drug laws that Congress has spun,” Mikos writes. “Only Congress can do that.”

The paper ends on a positive note for advocates of marijuana reform, citing the wide bi-partisan support for full legalization. “Now that marijuana advocates have won over the hearts and minds of the vast majority of American voters, continuing to push for administrative rescheduling may simply distract from the unavoidable if inconvenient truth: Meaningful reform takes Congress.”

The False Promise of Rescheduling, by Robert A. Mikos, is forthcoming in the Tulsa Law Review.