Fresh off a meandering national economic speech Wednesday night, President Donald Trump pivoted to a far more popular policy area Thursday by signing an executive order designed to push cannabis reform forward.
Trump’s order directs the Department of Justice to expedite moving cannabis from Schedule I, the federal government’s most restrictive status for a drug, to Schedule III. The action would give a tax break to cannabis companies and open up research, and could energize investment in California’s legal but lagging industry. However, it would not legalize cannabis nationally nor would it change much for customers in legal states.
Trump has been looking for a political win as his polling numbers crumble and Americans sour on his economic leadership. Pundits panned his Wednesday primetime economic address, with one Guardian commentator writing that it made Trump sound like “a desperate man” looking to find some way to win back his poll numbers.
On Thursday, he introduced his latest executive order by directly referencing the popularity of cannabis reform.
“Hopefully this reclassification, which, by the way, polls at 82%, will help many of those patients live a far better life,” Trump said before signing the order at the Oval Office.
Trump’s action follows in the footsteps of former President Joe Biden, who directed the federal government to study rescheduling in October 2022, and whose Drug Enforcement Agency later agreed in April of last year that cannabis should be moved to Schedule III. However, that process got mired in administrative proceedings and failed to move forward before Biden left office.
Trump’s action does not immediately reschedule cannabis and it could face similar delays, either from bureaucrats slowing down the process or outside court challenges delaying the rescheduling from going into effect. But Trump’s order directs the attorney general to make the legal move “in the most expeditious manner” legally possible, and Trump’s general appetite for speed could make this happen quickly, according to Marshall Custer, an attorney who focuses on cannabis regulation.
“This could happen much quicker than I typically would say if this was a continuation of the Biden administration, where there would be continued review and ability for department heads to muck up and slow down the process,” Custer said. “That is not going to be tolerated as much.”
Customers at California’s licensed cannabis dispensaries are unlikely going to notice rescheduling, as those operations will still be illegal according to federal law. But Schedule III, once in effect, would send a massive tax break to legal operators who would now be eligible to take normal business deductions off their federal taxes, which they are blocked from doing as long as cannabis is Schedule I. Custer called those tax implications “massive” for cannabis operators and said they would save companies across the industry billions of dollars in federal taxes.
Custer said he thinks Trump’s action will also spur more investment in state-legal cannabis companies in states like California, where years of federal inaction have created “depressed” markets. “This puts a light at the end of the tunnel and a clear path forward” toward an ultimate federal cannabis reform, Custer said.
Schedule III would also make it significantly easier for companies and academic institutions to research cannabis. Given the slow pace of research, that would take years to yield results but could end up being the biggest effect of rescheduling.
“That’s not going to be an overnight change or a blockbuster drug two months from now, but five years from now there might be truly transformational medical treatments that come from this,” Custer said.
Sean Hocking
Source link