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Marijuana could be classified as a lower-risk drug. Here’s what that means.

A potential policy change could have big benefits for marijuana businesses.

Marijuana plants, leafy and green, all about the same height, fill rows of a greenhouse.
Federal law requires all research in federally funded laboratories to use only marijuana from a single facility located in Oxford, Mississippi.
Brad Horrigan/Hartford Courant/Tribune News Service/Getty Images
Li Zhou is a politics reporter at Vox, where she covers Congress and elections. Previously, she was a tech policy reporter at Politico and an editorial fellow at the Atlantic.

The Department of Health and Human Services has now recommended that marijuana be classified as a lower-risk drug, a change that could have a major impact on how the cannabis industry operates, and that could be a step toward further destigmatizing the substance’s use.

Currently, marijuana is classified as a Schedule I drug, in the same category as heroin, and treated as more dangerous than fentanyl and cocaine. Schedule I drugs are described by the US Drug Enforcement Agency as drugs with “no accepted medical use and and a high potential for abuse.” After a request from the Biden administration for the relevant agencies to review its status, the Department of Health and Human Services has suggested the DEA — which is in charge of scheduling drugs — change its classification to Schedule III, like that of anabolic steroids and ketamine, a development first reported by Bloomberg.

Schedule III drugs are described by the DEA as drugs with “moderate to low potential for physical and psychological dependence.” In total, there are five categories that drugs can be scheduled in based on their medical applications and potential for abuse. Some drugs, like nicotine and alcohol, are descheduled, which means there’s limited federal oversight. Many activists and advocates, as well as some lawmakers like Colorado Sen. John Hickenlooper, have argued that marijuana should be descheduled rather than rescheduled.

[Related: The federal drug scheduling system, explained]

HHS’s recommendation, which was based on a review by the Food and Drug Administration, comes as marijuana remains illegal at the federal level, even as 23 states have legalized the use of recreational marijuana and 38 states have approved access to medical marijuana.

The DEA hasn’t signaled how it will respond to the HHS recommendation. But if it does reschedule the drug, marijuana businesses are among those most likely to benefit. That’s because rescheduling would likely mean access to federal financial benefits meant to help businesses, including tax breaks that marijuana companies currently aren’t able to use.

Individuals, meanwhile, could see reduced federal penalties for weed possession, but such acts could still be criminalized at the federal level, meaning drug charges would still be a risk. (Rescheduling marijuana would not legalize it federally.) At the same time, rescheduling could meaningfully dilute some of the stigma around the medical and recreational use of the drug, a move that could pave the way for other policy changes.

What a change to weed’s federal classification could mean

Were weed’s classification to actually get changed, it could portend key changes for weed businesses and for drug researchers. Because weed is currently a Schedule I drug, businesses that sell it are subject to a high tax rate and limited deductions, something that marijuana businesses often claim make for difficult margins. One marijuana CEO told Politico access to federal financial business incentives would create a “healthier cannabis industry.”

A reclassification could also open up possibilities for scientific research on the medical benefits of weed and other questions, since Schedule III drugs aren’t subject to as onerous of an approval process for such studies. A rescheduling of marijuana could also mean that more medicinal products that contain it could be approved by the Food and Drug Administration. And that could lead to a more regulated medical marijuana industry for those who use the drug to treat conditions like Parkinson’s disease or lupus. Other Schedule III drugs like ketamine, for example, can be obtained via a prescription.

For individuals, access to recreational marijuana could still vary depending on their specific state’s laws, as could access to medicinal marijuana, depending on if the FDA chooses to approve more specific treatments. Recreational use at the federal level would also still be illegal. Legislation to legalize marijuana federally has had some bipartisan support in Congress from the likes of House Minority Leader Hakeem Jeffries (D-NY) and Rep. Dave Joyce (R-OH), but it still hasn’t picked up sufficient backing to pass both chambers.

That’s despite a majority of Americans supporting marijuana legalization and growing momentum to pass such laws at the state level.

All that means, however, that there could still be risk of arrest and federal charges for marijuana. There is a chance that rescheduling could “reduce or potentially eliminate criminal penalties for possession,” according to the Associated Press. Activists, however, warn that it’s not yet clear just how much such penalties would change.

“Rescheduling cannabis from 1 to 3 does not end criminalization, it just rebrands it. People will still be subject to criminal penalties for mere possession, regardless of their legal status in a state-level medical program,” cannabis advocate Justin Strekal told Politico.

One thing rescheduling would have is significant symbolic heft. It would alter the way that weed is formally being treated at the federal level, and would do more to normalize its use. Theoretically, that could act as an early step to more transformative federal policy that could one day legalize marijuana more broadly and provide more consistent regulations on the subject.

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