WASHINGTON — More than three months after President Joe Biden called for a relaxation of cannabis restrictions, the U.S. Drug Enforcement Administration announced a hearing would be held by the end of the year on rescheduling cannabis from a Schedule I substance under the Controlled Substances Act to a less restrictive Schedule III drug, similar to Tylenol with codeine or testosterone.
Dozens of Oklahomans have already submitted public comments supporting the proposed rescheduling, with some going as far as to call for legalization.
This story was reported by Gaylord News, a Washington reporting project of the Gaylord College of Journalism and Mass Communication at the University of Oklahoma.
“Reclassifying marijuana is a necessary step that will move the needle in our ongoing efforts to reform and modernize U.S. drug policy, and I urge you to pass this new rule and push back against this nation’s archaic laws against cannabis possession,” Cameron Foral of Oklahoma City wrote.
Set for 9 a.m. Monday, Dec. 2, the DEA cannabis hearing is open to the public. Individuals with a desire to participate must submit a written request by Sept. 30.
According to the DEA, Schedule I drugs have no medicinal use and the highest potential for abuse. As a Schedule I drug, cannabis is classified with drugs like heroin, LSD and ecstasy, among others.
Schedule III drugs are those designated to have a moderate to low risk of physical and psychological dependence. Schedule III drugs include ketamine, codeine and testosterone, among others.
Oklahoma AG Gentner Drummond supports hearing
In June, before the announcement of the Dec. 2 date, Oklahoma Attorney General Gentner Drummond signed onto a letter from other state attorneys general voicing support for the hearing.
“Considering the public impacts of the proposed rule, a public hearing is in the public interest, and therefore in the interest of our states,” the letter states. “Reclassifying any drug from Schedule I to Schedule III is a significant change. Especially considering how politically fraught the topics of marijuana use and legalization have become, a dramatic change in the classification of marijuana should not be done lightly or without sufficient public input. DEA should hold a public hearing on the proposed rule.”
According to a Pew Research poll from March, 57 percent of voters believe cannabis should be legal for recreational and medicinal use.
While the general public may appear supportive of rescheduling or legalizing cannabis, those in the transportation industry are concerned about challenges it could impose on drug-testing requirements.
“Rescheduling marijuana from Schedule I to Schedule III poses significant potential consequences to federally required workplace drug testing programs that have not been considered or addressed in this proposed rulemaking. While [the Department of Transportation] and Coast Guard regulations specifically require testing for marijuana regardless of its [Controlled Substances Act] Schedule designation, those regulatory frameworks rest on the Department of Health and Human Services’ authority to establish scientific standards including drug metabolite levels and certification of laboratories to conduct specimen testing,” Caitlyn Stewart, vice president of regulatory affairs for the American Waterways Operators, wrote in a July statement. “This critical interplay between DHHS, DOT and the Coast Guard means that rescheduling marijuana to Schedule III without express new authority for DHHS to continue setting scientific standards for marijuana as a Schedule III controlled substance could jeopardize, and possibly eliminate, the authority of DOT and the Coast Guard to continue requiring marijuana testing for transportation workers.”
In June, before the publication of the letter by the American Waterways Operators, Secretary of Transportation Pete Buttigieg testified in a House Committee on Transportation and Infrastructure hearing on the implications of rescheduling cannabis.
“Our understanding of the rescheduling of marijuana from Schedule I to Schedule III is that it would not alter DOT’s marijuana testing requirements with respect to the regulated community,” Buttigieg said. “For private individuals who are performing safety-sensitive functions, subject to drug testing, marijuana is identified by name, not by reference to one of those classes. So even if it was in its classification, we do not believe that would have a direct impact on that authority.”
Rescheduling the drug could reduce federal penalties for trafficking and introduce new regulatory challenges, but it would not ease the restrictions cannabis companies face when working with banks.
SAFER Banking act could provide clarity
On April 30, the American Bankers Association published a statement in response to the announcement of a potential DEA cannabis hearing.
“While ABA takes no position on the legalization of cannabis, it’s important for policymakers to know that any potential decision to reclassify cannabis has no bearing on the legal issues around banking it. Cannabis would still be largely illegal under federal law, and that is a line many banks in this country will not cross,” wrote Rob Nichols, ABA president and CEO. “The solution is the bipartisan SAFER Banking Act, which would allow banks to provide services to the cannabis industry in those states where it’s not legal. Passing that legislation in Congress would address the ongoing legal limbo around cannabis banking, while enhancing public safety, tax collection and transparency.”
In 2023, U.S. Sen. Jeff Merkley (D-Oregon) introduced the SAFER Banking Act, or the latest version of the Secure and Fair Enforcement Regulation Banking Act. The bill would provide protections to federally regulated financial institutions that serve state-sanctioned cannabis businesses. In December 2023, the Senate Committee on Banking, Housing and Urban Affairs held a hearing on the bill. As a similar version did in 2021, the bill stalled.
Since cannabis is federally illegal, individuals in the cannabis industry are often forced to carry large amounts of cash and find legal and creative ways to pay their employees and taxes.
“I go through my LLC. I can pay my employees through the LLC, but I’ve got to give cash to my [accountants] that pay it for me,” said David Walker, owner of Great Barrier Reefer, a dispensary in Oklahoma City.
Walker said the process is not only tedious and time-consuming but also unnerving.
“If I’m driving around when I see my CPAs with $18,000 or $22,000 on average from payroll and taxes, I’m literally sitting there going, ‘Gosh, if I get in an accident or something happens and someone gets my bag, I’m literally out of business. I can’t recover from this,’” Walker said. “I have three kids, I do everything for my family, wife, my whole business relies on that. Most people that try to rob my business know we can’t use banks because banks don’t want us, so they know we’re piled up with cash. That’s the scariest part.”
The DEA cannabis hearing is set to take place at the DEA Museum and Visitors Center in Arlington, Virginia.
