Share on linkedin The U.S. Drug Enforcement Agency is recommending that cannabis be reclassified as a Schedule III drug, which would codify that it has medicinal value and is less dangerous than its current Schedule I designation,Venture capital investment in cannabis companies has fallen sharply in the past couple of years, totaling just $550 million in 2023 after hitting $3 billion in 2019 and $2.7 billion in 2021, according to PitchBook.
Publicly traded stocks also have slumped. Curaleaf shares, for example, opened yesterday down 70% from their 2021 highs.Rescheduling would allow cannabis companies to deduct business expenses on their taxes, which would particularly help dispensaries that typically operate on very tight margins. It also would eliminate restrictions on cannabis research, and could create legal protections for medical marijuana users who've run afoul of housing or employment rules.There also are industry hopes that this would be the first step toward allowing interstate trade of cannabis, given that the market has struggled with oversupply in certain states.
But that could only be accomplished by subsequent approval by the U.S. Food and Drug Administration, and even that might be limited to particular cannabis strains or products.Nor would it permit federally chartered financial institutions to do business with cannabis companies, although Congress might view the move as important enough to finally approve aThe road to national legalization has been long, and remains far on the horizon. But this is a significant pitstop on the way.