A Changing of the Guard? A Recap of President Biden’s Pardon & Plans for Cannabis Policy Overhaul
October 7, 2022
President Biden Acknowledges a “Failed Approach” to Marijuana Policy, Outlines Significant Plans to Pardon Thousands, and Evaluate How Marijuana Is Scheduled Under Federal Law.
On Thursday, October 6, 2022, President Joe Biden issued a press release and video statement announcing his actions to end what he called a “failed approach” to the United States’ federal marijuana policies and calling for significant marijuana reform at the federal level.
First, President Biden announced his administration will be pardoning any U.S. citizens and lawful permanent residents charged or convicted under federal law (and Washington D.C. law) of simple marijuana possession on or before October 6, 2022. Their full political, civil and other rights will be restored. The President called on all governors to follow suit and pardon state offenders of simple marijuana possession.
President Biden also directed the Secretary of Health and Human Services and the Attorney General to initiate the administrative process to “review how marijuana is scheduled under federal law.”
At a minimum, the President’s announcement shows a real – and long-awaited – change in the Federal Government’s approach to cannabis, which has been criminalized as a Schedule I substance since the Controlled Substances Act was signed into law in 1970.
The pardons will have a lasting impact on the thousands of individuals convicted of simple marijuana possession since the 1970s, which, according to comments by administrative officials, will affect about 6,500 people convicted at the Federal level and thousands more in Washington D.C. While the administration acknowledged there are no individuals currently serving time in federal prison for simple marijuana possession, the fact that the pardons will be restoring political, civil and other rights to those affected will have a real impact on thousands of lives, by, according to President Biden, restoring voting rights, and removing barriers to employment, housing and educational opportunities, among others.
President Biden acknowledged that it “makes no sense” that “the federal government currently classifies marijuana as a Schedule I Substance, the same classification as Heroin and LSD, and more serious than Fentanyl.”
In directing the Attorney General and Secretary of Health and Human Services to expeditiously review “how marijuana is scheduled under federal law”, President Biden reiterated the importance of maintaining laws related to trafficking, marketing and underage sales.
A change in the scheduling of marijuana could have a tremendous impact on the cannabis industry. While the White House did not state its direct intent with respect to this review process, a senior administration official noted that the President is asking to “undertake a review, not to de-schedule or any particular schedule. He has asked … to undertake the review to assess where — what — how marijuana should be classified.” This seemingly indicates the Biden administration is more interested in re-scheduling, marijuana, as opposed to de-scheduling, i.e., ending the prohibition on marijuana.
A re-scheduling under the Controlled Substances Act could still have profound impacts on operators in the cannabis industry and the investors financing them, potentially easing banking access for cannabis businesses, possibly opening the door to listing plant-touching cannabis stocks on the NYSE and Nasdaq stock exchanges, and possibly freeing cannabis businesses from the crippling effects of Section 280E of the tax code, which prohibits cannabis businesses from claiming any federal income tax deductions (except for costs of goods sold), among others.
These are exciting times, and there is much more to unpack and discuss regarding this announcement.
We are excited to discuss what this means and how it will affect the industry moving forward, in addition to various other topics, with a group of distinguished industry experts at Burns & Levinson’s Sixth Annual State of the Cannabis Industry Conference on October 17th.
Click here to register for the conference. Our readers can save 25% with the code SECRET25 at checkout.
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