UPDATE: President Donald Trump has just signed an executive order reclassifying marijuana from a Schedule I drug to a Schedule III drug, a move that is poised to revolutionize the cannabis landscape in Michigan and beyond. This pivotal change, announced on October 12, 2023, shifts marijuana from a category alongside heroin to one that includes pain medications like Tylenol with codeine, marking a dramatic softening of federal attitudes toward cannabis.
This significant reclassification could open doors for medical research and provide relief for Michigan’s burgeoning cannabis industry. “This classification order will make it far easier to conduct marijuana-related medical research, allowing us to study benefits, potential dangers, and future treatments,” Trump stated during the signing ceremony in the Oval Office.
Experts are weighing in on the implications. Hillary Marusak, an associate professor at Wayne State University, emphasizes the challenges researchers have faced due to federal illegality. “It’s actually a really exciting treatment target for things like anxiety and post-traumatic stress disorder and pediatric epilepsy,” she noted.
The immediate impact on Michigan’s cannabis businesses cannot be overstated. Natalia Cardenas, manager of New Standard Cannabis, has observed firsthand how cannabis products help customers with various medical conditions. “I have always been a little more prone to depression,” Cardenas shared, highlighting her personal use for mental health. She believes that enhanced research capabilities will lead to even better products tailored for issues like back pain and insomnia.
However, while this reclassification is a step forward, Marusak cautions that it does little to alleviate the funding challenges faced by researchers. “At first glance, it seems like a real win for cannabis science and research, but I feel like the gesture changes little by way of research,” she explained.
One major area of impact involves Section 280-E of the IRS tax code, which has limited deductions for cannabis companies. Nick Hannawa, chief legal counsel at Puff Cannabis Company, pointed out that under the current tax code, cannabis businesses cannot write off standard expenses, placing them at a severe disadvantage. “We are one of the most harshly taxed industries in the entire country,” he noted. Hannawa anticipates that the rescheduling will save cannabis companies “millions and millions of dollars” in taxes, leveling the playing field with other industries.
Despite the potential for financial relief, banking challenges remain. Hannawa warned that while the order could entice new investments, it does not federally legalize marijuana. “The compliance costs of banking cannabis are high, and that’s kept a lot of banks out of it,” said Ross Sloan, senior vice president for cannabis banking at Dart Bank. He believes changes will come gradually and not overnight.
Not everyone supports this federal shift. Several Republican members of Congress have openly criticized the decision. Sen. Cynthia Lummis of Wyoming disagreed with the president, expressing concern over youth drug issues. Sen. John Hoeven of North Dakota echoed similar sentiments, citing marijuana’s dangers.
The cannabis industry is now looking to the future, particularly the passage of the SAFER Banking Act, which aims to facilitate banking relations for cannabis companies. As the landscape evolves, stakeholders are eager to see how these developments unfold.
This executive order is not just a policy change; it represents a cultural shift that could redefine the perception and utilization of cannabis across the nation. As Michigan businesses brace for the implications of this move, the focus will remain on how effectively they can leverage new opportunities for growth and research in the coming months.
Stay tuned for more updates as this story develops.
