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TEXAS — The Department of Justice (DOJ) and the Drug Enforcement Agency (DEA) have officially placed medical marijuana products approved by the Food and Drug Administration (FDA) in the Schedule III classification, down from Schedule I.
The move comes after an executive order from President Donald Trump in December last year, calling to expedite the reclassification process.
The process, though completed during Trump’s second term, started when former President Joe Biden was in office. According to a breakdown from The Ohio State University, Biden directed the DOJ and DEA to start the reclassification in late 2022.
Fast forward to today, medical marijuana received the green light for a Schedule III classification, where drugs like ketamine and Tylenol with codeine live. According to the DEA, Schedule III drugs have “a moderate to low potential for physical and psychological dependence.”
Recreational marijuana has not been reclassified and remains an illegal substance under Schedule I, next to drugs like cocaine and heroin.
“It legitimizes us federally,” said Jervonne Singletary.
Singletary is the compliance and government relations officer for Parallel, the parent company of the Texas medical marijuana provider goodblend.
“We’ve been operating under agreements and gentleman’s handshakes for over 10 years now,” Singletary said.
Before the national policy shift on cannabis, 40 states, along with Washington, D.C., operated their own medical marijuana programs.
Among these is the Texas Compassionate Use Program (TCUP), which has been operating since 2015. With the state’s medical program in its 11th year, operators are used to the strict processes mandated by the state.
“The rules are already laid out. They’re very strict. We’re highly regulated,” said Nicholas Fallon, market president for goodblend. “That’s a main aspect as far as DPS goes, making sure every single plant is accounted for.”
While Fallon said operations at state growing sites won’t change, the finances behind growing the crops will.
“Schedule III, that status would now exempt all state-licensed medical cannabis operators from IRS code section 280-E,” Singletary said.
“280E has long prevented companies like goodblend and other state legal, medical cannabis operations from deducting standard business expenses like rent and payroll,” he continued. “It will allow us, as we continue to realize these cost savings, to honestly pass that on to the customer.”
On the customer end, they may soon use their credit cards to purchase medical marijuana products, something still not available because of the old Schedule I status.
But even with the new reclassification of medical marijuana, credit card companies can make the choice not to opt in for those transactions.
“Banks are risk-averse entities, and there’s been folks calling for separate legislation to address the banking issues separately,” said Katharine Harris, a drug policy fellow at Rice University.
Harris also touched on how momentum in the medical cannabis sector could affect the recreational cannabis sector.
“There’s a hearing scheduled for June 29 to reconsider the reclassification of recreational products,” she said.