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What rescheduling cannabis to Schedule 3 could signify

On Behalf of | Jun 20, 2024 | cannabis

In August 2023, the Department of Health and Human Services and the Food and Drug Administration recommended cannabis be moved from Schedule 1 to Schedule 3. Today, the Associated Press is reporting that the Drug Enforcement Administration (DAE) has approved this proposal. This essentially moves cannabis into the same category as testosterone and codeine.

This change could potentially lead to three major implications for the cannabis industry in the U.S. The first is that it could increase institutional investment. By reclassifying cannabis to Schedule 3, it potentially makes cannabis more attractive to investors, which might have been critical due to its past classification. Second, it could boost cash flow. The reclassification would free cannabis companies from the burden of tax provision 280E, which would deduct expenses from their revenue. And lastly, it would allow for growth prospects. Cannabis rescheduling could motivate additional state legalization movements, make cannabis less stigmatized and overall facilitate cannabis-oriented businesses.

Overall, if the rescheduling is confirmed and executed, we can expect to see a big shift in the cannabis industry.

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