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If marijuana is rescheduled—as President Donald Trump directed in a recent executive order—congressional researchers say the move could ease current restrictions on advertising for cannabis products.
Moving marijuana from Schedule I to Schedule III of the Controlled Substances Act (CSA) wouldn’t federally legalize the plant. But while it’s commonly understood that the reclassification would have tax policy and research implications, a lesser known effect concerns federal advertising laws.
In a report from the Congressional Research Service (CRS) that was published on Tuesday, analysts reiterated that many penalties associated with marijuana would remain in effect if it’s rescheduled. That’s because the CSA distinguishes cannabis from other Schedule III drugs with respect to most criminal penalties.
“If marijuana moves to Schedule III, this does not mean that all marijuana products would be lawful to manufacture, distribute, or possess,” CRS said, noting that the only exceptions that could apply would require Food and Drug Administration (FDA) approval of cannabis products in order for them to be lawfully sold. Experts generally agree that the chances of such approval for botanical marijuana that’s available in state-legal markets are slim.
But rescheduling would mean that advertising restrictions applied to Schedule I drugs would be lifted for marijuana, the report says.
“Some CSA penalties for marijuana are specific to its Schedule I classification. For example, CSA advertising offenses are written specifically for Schedule I,” it says.
“It is unlawful knowingly ‘to place in any newspaper, magazine, handbill, or other publications, any written advertisement [that] has the purpose of seeking or offering illegally to receive, buy, or distribute a Schedule I controlled substance,’” CRS said. “The penalties for doing so are up to four years in prison and/or a criminal fine. These penalties would no longer apply if marijuana moves to Schedule III.”
The report also addresses the tax policy implications of reclassifying cannabis under the CSA. If marijuana is moved to Schedule III, it would make an Internal Revenue Service (IRS) code known as 280E “inapplicable to marijuana businesses,” meaning they could take federal tax deductions available to other traditional industries.
CRS also described the collateral consequences of past or current marijuana use, regardless of rescheduling. That includes potential adverse employment actions, a ban on gun possession, loss of federal housing opportunities, immigration-related penalties and ineligibility for federal benefits such as grants, loans, contracts and licenses.
“Most of the consequences for marijuana use or for marijuana-related convictions would remain the same if it is moved to Schedule III,” it said. “While the use of marijuana by prescription for medical purposes would become lawful, marijuana products that are available in dispensaries in many states across the country are not currently available via lawful prescription.”
CRS also laid out considerations for Congress, which it said may take actions to “affect the classification of marijuana and the consequences of its use in any number of ways.”
“It could alter the schedule, declassify it as a controlled substance, or even create a new schedule classification,” the report says. “Further, Congress could seek to ease the criminal and collateral consequences of marijuana use and marijuana-related convictions, leave them as they are, or make them more severe.”
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Also last month, CRS put out a separate report clarifying that president simply directed the reclassification of marijuana—but it must still be finalized by the attorney general. And there’s a chance the Justice Department could opt to start the process all over again, or even not complete it at all.
Meanwhile, a coalition of Republican state attorneys general are criticizing Trump’s decision to federally reschedule marijuana, saying cannabis is “properly” classified as a Schedule I drug with no accepted medical use and a high potential for abuse.
Last month, groups of House and Senate Republican lawmakers also sent letters urging Trump not to reschedule cannabis. Trump, however, dismissed those concerns—pointing out that an overwhelming majority of Americans support the reform and that cannabis can help people who are suffering from serious health issues, including his personal friends.
Photo courtesy of Martin Alonso.
Kyle Jaeger is Marijuana Moment’s Sacramento-based managing editor. He’s covered drug policy for more than a decade—specializing in state and federal marijuana and psychedelics issues at publications that also include High Times, VICE and attn. In 2022, Jaeger was named Benzinga’s Cannabis Policy Reporter of the Year.
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