President Biden's Scheduling Directive Part 3

The Path Forward

The first two posts in this series introduced the formal rulemaking process that will govern the cannabis scheduling review that President Biden requested earlier this month. I covered the applicable law, the mechanics of the administrative process, and the tedious and enraging history of DEA’s use of that process to keep cannabis in schedule I unlawfully for decades. In this third installment in my series of posts on President Biden’s cannabis scheduling directive, I’m going to discuss the end game: What outcomes are possible from the impending administrative process to reconsider cannabis’s schedule I status? What are the implications of those various possible outcomes? And how should we all proceed in light of it all?

In Part I, I argue that descheduling is the outcome most aligned with rational drug policy reform. I also refute the widespread myth that rescheduling to schedules II-V would do more harm than good. While rescheduling is not the best result we can hope for, it certainly wouldn’t be a bad thing. Indeed, I’ll demonstrate that simply transferring cannabis from schedule I to schedule II—the most modest change to cannabis’s status under the CSA possible—would be a historic victory with several attendant benefits for industry, state and federal regulators, and the public. In Part II, I discuss the various barriers to rescheduling and descheduling and identify the strategic steps necessary to overcome them.

What’s happening here is historic. As I’ll explain, though, to make the most of the opportunity, we must navigate an obscure process under unprecedented circumstances. Developing a winning game plan will therefore be tricky business. Indeed, I believe there is one—and only one—strategy that makes descheduling a realistic possibility here, and as I explain below, it requires a carefully coordinated and expertly led effort from public and private stakeholders.

Part I: Identifying the Goal

A. Descheduling > Rescheduling

Many argue that those interested in sensible federal cannabis policy reform should adopt a “deschedule or bust” approach to the impending administrative process. Anything short of that, they say, would be a disaster. I’ll explain why that view and the various arguments commonly marshalled in support of it are wrong. I want to start, though, with something we all seem to agree about: descheduling is far and away the best outcome we could hope for from the administrative process. That is so for many reasons. I discuss three of them here.

First, descheduling is the only result that would remove cannabis from DEA’s purview and the CSA’s regime of federal criminal sanctions. See, e.g., 21 U.S.C. 844(a). The CSA’s prohibited acts and criminal sanction provisions apply uniformly to all controlled substances whether they’re listed on schedule I or schedule V. Take 21 U.S.C. 844(a). With limited exceptions not relevant here, that provision makes it “unlawful for any person knowingly or intentionally to possess a controlled substance ….”—full stop and without regard to its specific scheduling classification. 21 U.S.C. 844(a) (emphasis added). Or consider section 829(a), which addresses controlled substances listed in schedule V—the CSA’s least-restrictive classification—and expressly forbids “distribut[ing] or dispens[ing] [them] other than for a medical purpose.” 21 U.S.C. 829(c). Thus, even if cannabis were transferred to schedule V, virtually every transaction in the adult-use cannabis market today would remain criminal under federal law. The only way this administrative process fixes that core problem is through descheduling.

Second, descheduling is the only outcome that aligns with the reason President Biden gave in his October 6th announcement for requesting an administrative review of cannabis’s scheduling status in the first place. He emphasized that “no one should be in jail just for using or possessing marijuana,” and declared that he was taking “three steps … to end this failed approach”:

As I often said during my campaign for President, no one should be in jail just for using or possessing marijuana.  Sending people to prison for possessing marijuana has upended too many lives and incarcerated people for conduct that many states no longer prohibit. Criminal records for marijuana possession have also imposed needless barriers to employment, housing, and educational opportunities.  And while white and Black and brown people use marijuana at similar rates, Black and brown people have been arrested, prosecuted, and convicted at disproportionate rates.

Today, I am announcing three steps that I am taking to end this failed approach.

Descheduling is the only outcome consistent with that goal. Look at it this way, had cannabis never been listed as controlled substance in the first place, the President wouldn’t have had anyone to pardon on October 6th. Leave cannabis on any of the CSA’s schedules, however, and jailtime for cannabis possession and use—the essence of “failed approach” that President Biden hopes to “end” through this administrative process—will remain. See 21 U.S.C. 844(a); see also, e.g., id. 829(c) (prohibiting the “distribut[ion] [and] dispens[ation] [of schedule V substances] other than for a medical purpose”).

Of course, the President was quick to add that “even as federal and state regulation of marijuana changes, important limitations on trafficking, marketing, and under-age sales should stay in place.” While many claim that qualification proves that President Biden would oppose descheduling, I’m not so sure. For one thing, that’s not what he said. As just explained, his stated goal—“end[ing]” the “failed” federal policy that puts people in jail for cannabis use and possession—can be accomplished only through descheduling. I’m therefore hesitant to read his subsequent qualifying statement in a way that assumes he contradicted himself, especially because there are sensible alternative interpretations that don’t create such a problem. President Biden might, for example, have intended his reference to “important limitations” that “should stay in place” to

• announce a secondary purpose, i.e. “important limitations … should stay in place” to the extent they don’t undermine the primary objective of “right[ing] the[] wrongs” of the federal government’s “failed” approach of criminalizing cannabis possession and use;

• reference legal constraints that stop short of the sort of criminal sanctions that could result in jailtime; or

• limitations that exist under state law.¹

So, I think we should all take the President at his word when he says he hopes this process will ensure that no one ends up in jail for cannabis use or possession. I fully support that goal. And because descheduling is the only outcome consistent with it, prioritizing it over rescheduling as the primary goal of the administrative process strikes me as a no-brainer.

Third and finally, compared to rescheduling, descheduling would do more to close the “cannabis policy gap,” a term used to describe the dramatic and ever-widening gulf between the cannabis policies of the states that have legalized/decriminalized cannabis on the one hand and those of the federal government on the other. By removing cannabis from DEA oversight and the criminal penalties associated with federal controlled-substance status, descheduling would bring state and federal cannabis policy into alignment to a greater degree than they have been in decades.

That would be a very good thing on several levels. As Justice Thomas recently lamented, the cannabis policy gap has created a “contradictory and unstable state of affairs [that] strains basic principles of federalism and conceals traps for the unwary.” Standing Akimbo v. United States, 141 S.Ct. 2236, 2237 (Mem.) (Thomas, J., statement respecting denial of certiorari). He went on to describe the problem in greater detail:

This disjuncture between the Government’s recent laissez-faire policies on marijuana and the actual operation of specific laws is not limited to the tax context. Many marijuana-related businesses operate entirely in cash because federal law prohibits certain financial institutions from knowingly accepting deposits from or providing other bank services to businesses that violate federal law. Black & Galeazzi, Cannabis Banking: Proceed With Caution, American Bar Assn., Feb. 6, 2020. Cash-based operations are understandably enticing to burglars and robbers. But, if marijuana-related businesses, in recognition of this, hire armed guards for protection, the owners and the guards might run afoul of a federal law that imposes harsh penalties for using a firearm in furtherance of a “drug trafficking crime.” 18 U.S.C. § 924(c)(1)(A). A marijuana user similarly can find himself a federal felon if he just possesses a firearm. § 922(g)(3). Or petitioners and similar businesses may find themselves on the wrong side of a civil suit under the Racketeer Influenced and Corrupt Organizations Act. See, e.g., Safe Streets Alliance v. Hickenlooper, 859 F.3d 865, 876–877 (CA10 2017) (permitting such a suit to proceed).

I could go on.

Id. at 2238.

In short, closing the gap promotes the rule of law and the interests of all of us who depend on it for basic health, safety, and welfare.

B. Rescheduling Would Have Positive—Not Cataclysmal—Consequences.

Many argue that descheduling isn’t just the optimal outcome, but the only one that wouldn’t bring immediate devastation to the cannabis industry and everything reform advocates hold dear. Proponents of this view often claim that rescheduling would mean subjecting cannabis to a “the prescription drug model.” They’re wrong. As I’ll explain, rescheduling cannabis to any of the CSA’s other four schedules would be a historic event with concrete benefits for cannabis stakeholders, regulators, and the public at large. Arguments to the contrary rest on fallacious reasoning and assumptions that can’t withstand the slightest scrutiny.

To assess whether and to what extent a transfer to another of the CSA’s schedules would be a good or bad thing, you must first understand the basic requirements associated with each. The chart below covers the territory.²

As you read through the following discussion of the various benefits that would flow from transferring cannabis to the CSA’s other four schedules, you’ll notice that as thorough as the chart above is, it doesn’t capture everything. Where a relevant detail is not reflected in the chart, I’ve tried to provide other authority so you can verify my claims. I’ll start with the benefits of rescheduling cannabis to schedule II before discussing the benefits of schedules III, IV, and V.

Benefits of rescheduling to schedule II. There are two big differences between schedules I and II (a point Matt fleshed out in fascinating detail in his killer post on PCP). First, doctors may prescribe schedule II drugs under certain circumstances—something they can’t do with schedule I substances. Second, and this is the point I’ll focus on here: those seeking to research schedule I substances face significantly more red-tape than those seeking to research schedule II substances. In testimony before the House Subcommittee on Health, Committee on Energy and Commerce, Dr. Nora Volkow, the Director of the National Institute on Drug Abuse (“NIDA”), recently described the extraordinary challenges researchers face when seeking to study schedule I substances, contrasting them with the dramatically more relaxed regulations that apply to substances in schedules II-V:

Even experienced researchers have reported that obtaining a new Schedule I registration [from DEA under 21 U.S.C. 823(f)], adding new substances to an existing registration, or getting approval for research protocol changes is time consuming. Unlike for Schedule II through V substances, new and amended Schedule I applications are referred by the DEA to the HHS for a review of the protocol and a determination of the qualifications and competency of the investigator. This review is often in addition to other reviews of the proposed research and investigator, such as the federal grant review process, the FDA Investigational New Drug (IND) application review process, and Institutional Review Board and Institutional Animal Care and Use Committee reviews. Establishing the security infrastructure needed to conduct Schedule I research can be expensive and may need to be duplicated for each registrant working within a single research department. Researchers have also reported that there is a lack of clarity in some of the registration requirements and variability in their interpretation, which complicates and adds time to the process. For example, researchers report inconsistency in the guidance they have received on whether one individual can work under the registration of another, whether separate registrations are needed for each of an investigator’s research sites within the same campus, whether a manufacturing registration is needed to create final dosage formulations for research purposes, among other issues. Researchers have reported that sometimes these challenges impact Schedule I research and deter or prevent scientists from pursuing this critical work. 

A paper published by the National Library of Medicine in 2017, examined the problem of schedule I research barriers in the cannabis context specifically. After describing “[t]he substantial layers of bureaucracy that emerge from cannabis’s Schedule I categorization,” the authors explain that cannabis’s schedule I classification has stifled “research on the health effects of cannabis and cannabinoids . . . in the United States, leaving patients, health care professionals, and policy makers without the evidence they need to make sound decisions regarding the use of cannabis and cannabinoids.” Their conclusion is ominous (and obviously right): “This lack of evidence-based information on the health effects of cannabis and cannabinoids poses a public health risk.”

If you ask me, blocking science that “patients, health care professionals, and policy makers” urgently need to “make sound decisions” on issues so central to public health and safety isn’t just bad policy—it’s immoral. That might³ be an exaggeration if DEA could hide behind claimed fealty to the CSA’s “closed system of drug regulation.” Here, though, “the Federal Government’s current approach to marijuana bears little resemblance to the watertight nationwide prohibition that a closely divided Court found necessary to justify the Government’s blanket prohibition in Raich.” Standing Akimbo, 141 S. Ct. at 2238. So DEA doesn’t even have that fig leaf to hide behind.

But wait. It gets worse. In his October 6th announcement, President Biden noted the patent absurdity of keeping cannabis in schedule I while fentanyl—the nightmare synthetic opoioid fueling the overdose epidemic that is mowing down over 100,000 Americans a year right now—continues to wreak unimaginable havoc from schedule II. He’s right about that. As I’ve explained before, however, the fentanyl-cannabis comparison points up an even deeper problem: that cannabis’s unlawful schedule I classification may be exacerbating the opioid and overdose epidemic:

The Administration’s defenders say that addressing the overdose and addiction epidemics is simply a higher priority at the moment. With hundreds of thousands of Americans dying of overdoses each year and millions more addicted to powerful opioids, they argue, you’ll just have to excuse the President for not having gotten around to cannabis and psychedelics reform.

That argument may seem compelling, but only if you assume that cannabis and/or psychedelics aren’t part of the solution. Trouble is, there is powerful evidence that they are.

Don’t believe me? Fair enough. Perhaps you’ll believe NIDA Director, Dr. Nora Volkow, and former NIH Director and recently named “Science Advisor to the President,” Dr. Francis S. Collins. In a 2017 article published in one of the most prestigious peer-reviewed medical journals on the planet, they recognized that “[t]here is strong evidence of the efficacy of cannabinoids, including tetrahydrocannabinol (THC), in treating pain” and concluded that “[m]edications that target the endocannabinoid system … could provide a powerful new tool” for “chronic pain management.” And studies, including clinical trials, investigating the use of psychedelics for opioid use disorder are already underway.

Yet the Wall Street Journal recently quoted one lawmaker who opposes cannabis reform because, in his words, “[w]e have enough problems with gateway drugs the way that it is right now.” While he’s unquestionably right that America has a problem with gateway drugs, it seems he is laboring under the long-ago-discredited view that cannabis is a gateway drug. In fact, however, as Drs. Collins and Volkow recognized in 2017, America’s gateway drugs are pharmaceutical opiods. With millions of Americans struggling with opioid use disorder and thousands overdosing on fentanyl every year, that much should be obvious to anyone paying attention. Their more significant insight, however, is that there is powerful evidence that cannabis and (I would submit) psychedelics can be America’s “exit drugs.”

Put simply, the seriousness of America’s overdose and addiction epidemic makes the need for cannabis and psychedelics reform more—not less—urgent.

Rescheduling cannabis to schedule II would end this DEA-imposed dark age on cannabis science once and for all. That’s unquestionably a good thing. So while I acknowledge that descheduling would be even better, I remain convinced that rescheduling to schedule II would qualify as a historic victory for rational federal drug policy reform.

Before I move on, it’s worth mentioning that schedule II would have a few other benefits, including:

• theoretically opening the door to federally legal cannabis prescriptions and likely making some physicians less reticent to consider cannabis’s therapeutic potential, see 21 U.S.C. 829(a);

• theoretically opening the door to access to cannabis medicines under the federal Right to Try law, see 21 U.S.C. 360bbb-0a;

• resolving the 280E tax problem for companies whose business would no longer qualify as “trafficking” in a schedule I or II substance under state or federal law, see 21 U.S.C. 280E;

• potentially influencing lawmakers in jurisdictions that have maintained especially restrictive cannabis laws to consider loosening them to some extent;

• encouraging regulators and researchers to entertain the idea of occasionally thinking outside the “molecule/compound” model of drug development that currently dominates drug development and policy in the U.S.; and

• taking an incremental but significant step toward normalizing cannabis under federal law.

Next, I’ll quickly highlight some of the key benefits that would attend a transfer to schedules III, IV, and V. Then I’ll address the naysayers who view rescheduling as a doomsday scenario to be avoided at all costs.

Rescheduling to schedule III. Transferring cannabis to schedule III would have all the benefits of schedule II plus:

• lighter criminal penalties for cannabis-related violations of the CSA;

• eliminating the 280E tax problem altogether;

• relaxing various other regulatory burdens like quota requirements, security regulations, etc. (see the Vodra chart above for more detail); and

• do a bit more to normalize cannabis along the lines mentioned in the bullet-point list of additional benefits of schedule II.

Rescheduling to schedule IV. Schedule IV would have all the benefits of schedules II and III plus slightly lighter criminal penalties for trafficking, relaxing other technical compliance obligations slightly (see chart), and doing a bit more still to normalize cannabis along the lines already discussed.

Rescheduling to schedule V. Shedule V would have all the benefits of schedules II, III, and IV plus permitting cannabis to be distributed and dispensed without a prescription under certain circumstances, slightly lighter criminal sanctions for trafficking, relaxing other compliance obligations slightly (see chart), and doing a bit more still to normalize cannabis along the lines already discussed.

In my view, solving the 280E tax problem and finally removing the ridiculous barriers to cannabis research are huge, and the symbolic and historical significance of removing cannabis from schedule I should not be underestimated. Thus, while I acknowledge that descheduling is far and away the best outcome possible, I’m genuinely mystified that so many smart commentators continue to insist that we should prefer the schedule I status quo to any rescheduling scenario. I’ve studied their arguments carefully. I’ve even argued the point at length with several of them. As I explain next, having heard them out with an open mind, I remain thoroughly unpersuaded.

C. The Various Arguments That Rescheduling Would Be Worse Than Schedule I Are Nonsensical.

Why do so many people claim that keeping cannabis locked away in schedule I—the most restrictive and harshly criminalized federal classificaiton possible—is somehow preferable to moving cannabis to a less-restrictive and less-harshly-criminalized schedule? I’ll let them explain it to you in their own words.

Paul P. Josephson, partner in charge of Duane Morris’s Cannabis practice, says that rescheduling would result in FDA regulation of cannabis and state cannabis laws being struck down under the Dormant Commerce Clause:

[R]escheduling is not necessarily good news for the industry, either. Rescheduling could result in FDA regulation of products that would all but require cannabis companies to operate like pharmaceutical companies.

If cannabis is descheduled or rescheduled, existing state regulatory schemes that feature or include local protectionist measures would likely fall as substantial burden on interstate commerce.

Raza Lawrence, Counsel at Zuber Lawler LLP, argues that moving cannabis to schedule II would mean regulating cannabis under a pharmaceutical model that would doom the existing cannabis industry:

If President Biden’s proposal to move marijuana to Schedule 2 were implemented by his Administration, then the existing group of state-licensed, state-regulated cannabis businesses would continue to remain federally illegal, and only federally-regulated pharmaceutical companies could produce and sell marijuana, only in the form of FDA-approved drugs, and only to consumers who had a medical prescription for the drugs from a licensed physician.  This could drastically change the current state of the US cannabis industry and would put many existing cannabis companies out of business if the federal laws were enforced.

Another story quotes Robert A. Hendricks, “cannabis law expert and former chair of the State Bar of Michigan’s Cannabis Law Section,” who aruges that rescheduling to schedule II would spell the end for state-level adult-use frameworks:

“If we leave marijuana on the controlled substances list, we could never get over the hurdle of allowing the recreational use of marijuana in the United States,” Hendricks said. “Changing the scheduling of marijuana doesn’t change the framework for adult use. All of these states that have taken action, like Michigan, to create a framework for the regulation of marijuana, all of those probably go out of the window [if marijuana is classified as Schedule 2].” 

Others, whose identities I will not disclose (since they haven’t made these statements publicly as far as I’m aware), have made similar arguments to me personally. One friend recently argued, for instance, that “rescheduling cannabis would likely create a prescription drug model, setting the industry on a path to mandated clinical trials and FDA premarket review.” That, they claimed, “would likely cause more problems than it would solve for state-legal businesses,” and it would “devastat[e] … smaller businesses and [the efforts of] criminal justice reform advocates.”

The case against rescheduling thus boils down to three basic arguments:

1. Rescheduling would subject the cannabis industry to FDA regulations designed for the pharmaceutical industry. Complying with these regulations would be impossible for most cannabis companies and would quickly drive the rest out of business.

2. In the wake of rescheduling, courts would declare the various state laws designed for (and with the help of) the cannabis industry preempted or unconstitutional under the Dormant Commerce Clause. Chaos and upheaval would ensue as cannabis companies attempted to adjust to a burdensome and unfamiliar legal framework on the fly.

3. Rescheduling would only legitimize FDA-approved medicines dispensed by doctor prescription. If adult-use cannabis remains criminally prohibited at the federal level post-rescheduling, it will remain subject to a categorical federal criminal ban forever.

From here on, I’ll refer to these arguments (and every variant of them I’ve come across so far) collectively as the “Pro-Cannabis Case for Schedule I.” I’ll explain why they’re woefully misguided shortly. Before I do, though, I want to be very clear about what I’m not saying. I’m not saying that threats of crippling FDA regulation and enforcement, the Dormant Commerce Clause, and preemption—or, as I like to call, “The Three Horsemen the Legalization Apocalypse”—aren’t real threats to the cannabis industry. They are. What I am saying is that (1) cannabis’s schedule I classification isn’t doing a damn thing to protect anybody from them, and (2) descheduling wouldn’t either (or at least not much).

Let me explain. Proponents of the Pro-Cannabis Case for Schedule I do not—and cannot—deny that rescheduling has all the tangible benefits I went over above. Nor can they deny that some of those benefits—like reducing criminal penalties for cannabis-related crimes and removing obstacles to urgently needed cannabis research—would do a helluvalot of good in terms of promoting social justice and public health and safety. Yet they fear the Three Horsemen of the Legalization Apocalypse so much that they insist that those benefits aren’t even worth pursuing if achieving them means transferring cannabis from schedule I to schedule II, III, IV, or V.

That line of reasoning assumes that cannabis’s schedule I status is somehow protecting the cannabis industry from the Three Horsemen’s wrath. Otherwise, why the trembling fear that rescheduling would unleash their fury, right? Thing is, though, FDA’s jurisdiction over a substance doesn’t end at schedule I. In fact, it doesn’t depend on scheduling status at all. It turns entirely on whether the substance (or product or whatever) qualifies as a “drug,” “medical device,” “food,” "dietary supplement,” “cosmetic,” “tobacco product,” etc. under the surprisingly broad definitions of those terms under the Federal Food Drug and Cosmetic Act (“FDCA”) and FDA’s regulations implementing that statute.

The same goes for the other preemption and the Dormant Commerce Clause, which emanate from the Supremacy Clause and the Interstate Commerce Clause of the U.S. Constitution, respectively. Let me assure you, those constitutional doctrines—indeed, every constitutional doctrine—apply to cannabis today while it’s in schedule I and will continue to apply to cannabis whether it’s rescheduled, descheduled, excommunicated, or cannonized.

Naturally, this raises the question: If cannabis’s schedule I status isn’t keeping the Three Horsemen at bay, then what is? Many things. First, both Congress and the Executive Branch appear to be pushing for less—not more—cannabis enforcement at the federal level over time as a general matter. The President’s October 6th announcement, FDA’s passivity toward CBD even post-descheduling, and Congress’s passage of cannabis spending riders and ongoing focus on cannabis legalization proposals are just some of the proof in that pudding.

Second, federal enforcement consumes a lot of agency time and money. That money has to come from somewhere. In the FDA context, it’s pharma user fees and appropriations (your tax dollars). In other contexts, Congress offers the states access to federal funds conditioned on their cooperation in federal programs. In other words, the states often do the federal government’s dirty work (enforcement) in exchange for the money they need to meet their own responsibilities to the public they serve.

None of that is in place here, though. Appropriations require legislation. Conditional spending does, too. And good luck convincing the states that have legalized (i.e. the ones whose cooperation the federal government needs) to go along with a federal program that would threaten to end the flow of all those state-level cannabis tax dollars! So even if FDA had the inclination to ramp up enforcement in the cannabis space, the only way it could get the resources to do so would be by stealing from itself—i.e. taking dollars away from another agency project/priority. And make no mistake, FDA would have to rob itself blind to fund uniform enforcement against a $13 billion nationwide industry that it has barely engaged with for the past 50 years or so.

Nor is it clear that the prospect of shouldering the new and nebulous responsibility of aggressive cannabis enforcement would be an especially thrilling one to FDA. It sure hasn’t been in any particular hurry to ramp up enforcement in the CBD space since the 2018 Farm Bill descheduled hemp, for example.

Part II: The Path Forward

So far, I’ve demonstrated that (1) descheduling is far and away the best possible outcome we could hope for from the impending administrative process, and that (2) rescheduling would also have benefits that are definitely worth pursuing. So what are the barriers and obstacles to descheduling, and how do we overcome them? I answer those questions next.