Summary
President Donald Trump said his administration is considering reclassifying marijuana as a less serious drug, which would please the pressure groups of the industry and business leaders who have approached the president, while looking for a change that could substantially reduce taxes for the cannabis industry.
Key data
Trump told reporters on Monday that his administration is “seeing reclassification” and will probably make a decision “in the coming weeks” about whether marijuana, currently a drug drug 1, becomes a drug drug 3.
This statement confirms a report last week at The Wall Street Journal, which said Trump told attendees – including the CEO of the Trulieve Marijuana company, Kim Rivers – at a charity dinner of one million dollars per plate, which was interested in this change, in the middle of strong pressure from the industry.
As a drug drug, marijuana, along with other substances such as heroin and LSD, is described as “drugs without a medical use currently accepted and with high potential for abuse.”
Reclassifying marijuana to list 3 would put it in the same category as Tylenol and Codeine, facilitating research, obtaining financing and investments, and would allow the industry to access more tax incentives, although the drug would continue to be technically illegal under federal law.
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How the reclassification of marijuana in the US could help cannabis companies
Trump’s most flexible position on marijuana comes when the industry has entered its orbit, including through the American Rights and reform PAC, which receives financial support from the industry, has advertised in its name and has also donated 1 million dollars to Trump’s PAC, according to The Wall Street Journal.
The PAC has a survey on its website commissioned by the Trump polls, Tony Fabrizio, which shows that more than half of the Republicans support legalizing cannabis, in addition to video ads that blame the Biden administration for maintaining the classification of list 1 (the Biden administration tried to reclassify the drug, but finally did not advance with the proposal).
Key event
Calling the theme “Very complicated,” Trump said Monday that he has “heard good things related to the doctor and bad things related to almost everything else.” Trump had already shown some openness to make restrictions on marijuana. Last year he said in a post in Truth Social that he planned to vote in favor of an amendment in Florida to legalize marijuana, although he was finally rejected by voters. In that same publication, he pointed out that, as president, “he would continue to focus on research to unlock the medical uses of marijuana and reclassify it as a list of list 3.”
What to watch
The controlled substances law commission the Attorney General to initiate the process to change the drug classification. Then, the Department of Justice typically assigns the Drug Control Administration (DEA) the final determination on the classification.
Lee: With the federal stagnant legalization, cannabis companies are finding a new green fever in Europe
Main critic
“The only way to completely solve the multiple problems that arise from the federal conflict with the state law is to remove the cannabis of the Law of Controlled Substances and regulate the product similar to alcohol,” said Aaron Smith, CEO of the National Association of the Cannabis Industry, in a statement to ABC News in 2023, when the Biden administration announced that it was reconsidering the classification.
Additional data
Cannabis actions rose on Monday after Trump’s announcement, according to CNBC, which reported that Canopy Growth’s shares increased more than 26%, Tilray Brands rose 41% (its best day since 2021), and Cronos Group shot 16% to reach a maximum in 52 weeks. The rise began just after the Wall Street Journal report last week, which revealed that Trump told attendees in a collection event that he was seriously reclassifying the drug.
Key history
Reclassifying marijuana could attract more investors to the industry and give more confidence to banks to support cannabis companies. As a list 1, cannabis businesses cannot deduce commercial expenses according to section 280E of the Internal Revenue Code. The effort to reclassify the drug stagnated during the Biden administration due to the resistance of the DEA, The New York Times reported.
This note was originally posted in Forbes USA
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