Government Shut Down Another Gut Punch To Cannabis Industry
By Terry Hacienda, The Fresh Toast
While consumer use soars, mom and pop businesses are struggling, a shutdown will be be another blow to the marijuana industry
A vast majority of the public and most leading medical institutions support better access to legal cannabis, but a few in DC are against the plant and the thousands of mom and pop businesses in the industry. Now, at the potential government shut down another gut punch to cannabis industry. Rescheduling would not only provide a path for increase research and patient care from medical marijuana, but would allow the mom and pop businesses which make up the bulk of the industry to have the same tax benefits as nail salons, car repair shops, and local restaurants. It would also allow a great ease of doing business which would help business owners and consumers alike.
The potential government shutdown could significantly impact the ongoing process of marijuana rescheduling, which has been a major focus of the Biden administration since 2022. The Drug Enforcement Administration (DEA) is currently considering rescheduling marijuana from Schedule I to Schedule III under the Controlled Substances Act, a move that could have far-reaching implications for the cannabis industry and medical research.
The rescheduling process, which began with President Biden’s instruction in October 2022, has already experienced delays. A preliminary hearing in December 2024 resulted in plans for evidentiary and testimonial proceedings between January and March 20252. A shutdown could further postpone these critical hearings. The Republican-led House Appropriations Committee attempted to block the Department of Justice from using federal funds to reschedule cannabis in July 2024. A government shutdown could exacerbate funding concerns and potentially halt progress on the rescheduling efforts. The rescheduling proposal is currently under review by the White House Office of Management and Budget and is subject to public comment. A shutdown could interrupt this review process and delay the collection and analysis of public input.
Despite state legalizations, the cannabis industry, which has been operating in a federal legal gray area due to the conflict between state and federal laws. And despite being a cash cow for regional government economies, it could face increased uncertainty during a government shutdown:
State-licensed marijuana operators, already existing in a legal limbo, may face additional uncertainty regarding their status and future operations. Questions about the retroactive effect of rescheduling on existing tax liabilities for marijuana operators would remain unresolved during a shutdown.
Rescheduling marijuana to Schedule III would potentially ease restrictions on medical research and help millions of patients. From military veterans and chronic pain suffers to cancer patients, medical marijuana has become mainstream and a mainstay. A shutdown could delay more progress, impacting ongoing and planned studies and patients.
While a government shutdown would likely be temporary, its effects on the marijuana rescheduling process could have lasting consequences:
The expected timeline for a final rescheduling rule, initially anticipated for September or October 2024, would likely be pushed back significantly3.
The momentum gained in the rescheduling process, including the public comment period that garnered a record 43,000 comments, could be disrupted2.
Any delays or interruptions in the process could potentially strengthen arguments in ongoing legal challenges, such as the lawsuit brought by Doctors for Drug Policy Reform questioning the DEA’s witness selection process
The Fresh Toast is a daily lifestyle platform with a side of cannabis. For more information, visit www.thefreshtoast.com.
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