March has been a big month for cannabis reform and the $40 billion state-regulated marketplace.
President Biden mentioned cannabis reform and his administration’s efforts to reschedule the substance in his State of the Union address—a historic first for any U.S. president. Vice President Kamala Harris held a cannabis event in the White House, where she publicly expressed her desire to see the U.S. Drug Enforcement Administration (DEA) move quickly to reschedule and privately indicated her support for full legalization. The Journal of the American Medical Association released a report and editorial, noting that use of unregulated intoxicating hemp is more prevalent in states without a state-regulated cannabis marketplace. Multi-state operator Trulieve announced that they were receiving $113 million in IRC Section 280E tax refunds. ProPublica reported that the U.S. Department of Justice has prepared an updated Cole memo; this is significant because even in Schedule III, the industry will need clarity on enforcement priorities. A high-profile litigation challenging the constitutionality of Schedule I classification of cannabis continues to press forward. Previously, 12 state attorneys general wrote a letter to the DEA supporting rescheduling to Schedule III, and six governors did the same.
Meanwhile, Perkins Coie lawyers are leading law and public policy strategy for the Coalition for Cannabis Scheduling Reform, which will be filing public comments upon DEA’s issuance of a draft rule. The rule is anticipated to be released as soon as April. If DEA proposes moving marijuana to Schedule III, it is expected that rescheduling and the elimination of Section 280E tax penalties will mark a new chapter for the state-regulated cannabis industry.