"The False Promise of Rescheduling"

The title of this post is the title of this timely new paper authored by Robert Mikos and now available via SSRN.  Here is its abstract:

The federal government appears poised to reschedule marijuana under the Controlled Substances Act (CSA). Advocates have suggested the move will generate substantial benefits for the state-licensed marijuana industry, which has struggled to secure basic legal and business services under federal prohibition.  But this Essay serves as a reality check.  It suggests the expectations surrounding rescheduling are highly inflated, for two reasons.

First, rescheduling still might not happen.  To reschedule marijuana, the Drug Enforcement Administration (DEA) would have to change its long-standing interpretation of key statutory scheduling criteria.  Even if the Biden Administration were willing to do that (the jury is still out), a future Administration might reconsider.  If President Biden loses the fall 2024 election, nothing would stop his successor from quickly returning marijuana to the tightly regulated Schedule I.

Second, even if it happens, rescheduling to a lower schedule under the CSA will not greatly improve the fortunes of the marijuana industry.  The CSA will continue to impose a litany of restrictions on the manufacture and sale of marijuana.  What is more, the Food Drug and Cosmetic Act (FDCA) will still ban all interstate commerce in the drug.  (Marijuana would still not be approved by the Food and Drug Administration, post-rescheduling.)  If firms in the industry fail to comply with the rules imposed by these two statutes — as seems almost inevitable — they could still be denied banking, bankruptcy protection, intellectual property protection, contract enforcement, and other key services, just as they are today.  The Essay suggests that only Congress can remove all these challenges. To obtain more impactful and comprehensive reforms to federal marijuana policy, advocates should eschew the false promise of administrative rescheduling and focus instead on convincing Congress to enact reform legislation.