WORKWEEK

The cannabis industry has to be careful what we wish for.

The words “federal legalization” gets thrown around a lot, however, how do we actually get there, and what happens when we do get there?

The 3 Options

To sum it up, there are three main ways to achieve federal legalization in the U.S.:

1. Remove cannabis from the list of controlled substances entirely and leave it at that, letting the individual states and institutions make their own choices.
2. Move it down the list, making it a Schedule III substance or lower, which typically comes with less restrictions than Schedule I or II substances.
3. Remove cannabis from the controlled substances list and commercialize it at the federal level, unionizing all legal states and creating a federally-regulated program all participating states must follow.

Scheduled substances in the United States

Cannabis is a controlled substance in the United States, and not just any controlled substance; cannabis is a Schedule I substance. 

A Schedule I substance is “defined as drugs with currently no accepted medical use and a high potential for abuse,” according to the DEA. It’s listed alongside other Schedule I drugs like LSD, heroin, and ecstasy. 

Even cocaine and methamphetamine ranks lower than cannabis does, being classified as a Schedule II substance by the DEA. Xanax is a Schedule IV and considered to have “low potential for abuse and low risk of dependence.”

Federal Legalization In Canada

Canada federally legalized cannabis in 2018 through The Cannabis Act. This act created a strict, legal framework that controls the legal cannabis supply chain, from production to consumer possession. 

It removed cannabis from the Canadian list of controlled substances and created a uniform, federal system that every province and territory in Canada must follow. 

Option #1 for U.S. Legalization 

Removing cannabis from the list of controlled substances, and allowing individual states to do what they will with that information, is how hemp-derived CBD businesses were able to come into play. Hemp was removed from the list of Schedule I substances under the 2018 Farm Bill. 

This allows states to choose how they’d like to handle cannabis. It doesn’t create a federal program or regulations like Canada’s federal legalization did.  

Option #2 for U.S. Legalization 

Reclassifying cannabis as a Schedule III substance or lower solves some problems, but not all, and in our opinion: cannabis isn’t as dangerous as even some Schedule IV drugs, so to categorize it on those lists seems disingenuous. 

Schedule IV drugs like Valium, Xanax, and Ativan have caused fatal overdoses. These drugs are all benzodiazepines, and benzodiazepines were responsible for 31% of the almost 23,000 deaths from prescription medications in the United States.

To us, cannabis doesn’t belong in this category at all.

Option #3 for U.S. Legalization 

Removing cannabis from the list of controlled substances and commercializing it at the federal level prevents states from making their own decisions about cannabis. 

While there may be an opportunity for states to opt out of having dispensaries or businesses nearby, those with dispensaries and cannabis businesses are at the mercy of federal regulations and have to abide by them.

Also, we have to consider whether the Bureau of Alcohol, Tobacco, Firearms, and Explosives might be given control of cannabis in this instance. This wouldn’t be an ideal outcome for the cannabis space, despite a few states like Washington and Alaska lumping alcohol and cannabis together in terms of regulations. 

Which option is the right option?

Spoiler alert: here at The Green Paper, we believe in option #1. This route gives states the most freedom to make choices outside of federal regulations and it does not classify cannabis alongside dangerous medications. 

Looking Forward

Cannabis Use Disorder was added to the Diagnostic and Statistical Manual of Mental Disorders (or DSM-5) in 2017. The DSM-5 is the standard classification of mental disorders in the U.S. Being on the DSM-5, the federal government definitely considers cannabis to have a high potential for abuse.

Regarding cannabis having “no recognized medical benefit”, there must be a series of large-scale clinical trials before the federal government says cannabis has medicinal value.

That said, Schedule I substances have barriers associated with conducting research, cannabis is stuck between a rock and a hard place with research. 

The same rock and hard place is present when you consider whether or not cannabis has the potential to be abused. 

Our Take

We believe option #1 is unlikely to happen, at least for now. This is because a drug has to have the potential to be abused before scheduling it and there are certain prerequisites that must happen before cannabis can be considered to have medicinal value in the eyes of the federal government.