The federal government has moved to ease some marijuana restrictions for states with medical marijuana programs, including Oklahoma..
In a rule announced April 23, acting Attorney General Todd Blanche placed state-regulated marijuana from Schedule I into Schedule III, a lower classification that could change taxes, research access and federal oversight for licensed businesses.
For Oklahoma users, the immediate effect is expected to be limited, according to the information released so far. But for growers, processors and dispensaries, the rule could bring major changes. Those include potential tax relief and a new requirement to register with the Drug Enforcement Administration. State officials say they are still reviewing the change and that questions remain about how the federal shift would affect Oklahoma’s medical marijuana system in practice.
The new rule announced April 23 places state-regulated marijuana into Schedule III instead of Schedule I. According to the rule, the change applies to states with medical marijuana programs and to tightly controlled marijuana products already approved by the DEA for uses such as research.
In his rulemaking memo, Blanche said incorporating state licensing systems into the federal framework is “the most effective and efficient” approach and would cause the least disruption to patients and existing medical marijuana systems.
The change comes months after Gov. Kevin Stitt called for another statewide vote to end Oklahoma’s medical marijuana program.
One of the biggest changes is tax treatment. Marijuana businesses have long been barred from taking ordinary business expense deductions on their federal taxes, but that restriction is ending under the new rule.
Blanche also encouraged the treasury secretary to consider retrospective relief for prior tax years. If that happens, businesses could be allowed to seek refunds or other relief on taxes already paid.
Michael Khemmoro, owner of Mango Cannabis, said the tax burden has been especially difficult in a competitive industry. He said marijuana businesses were treated by the state as licensed medical operators while the federal government treated them as drug dealers, producing effective tax rates he described as unsustainable.
To comply with federal law, Oklahoma’s licensed medical marijuana businesses also would have to apply for DEA registration.
According to the rule, the DEA must grant registration unless doing so would be inconsistent with the public interest or U.S. treaty obligations. Businesses that apply within 60 days after the rule is published in the Federal Register could continue operating under the state system while the DEA reviews applications.
Blanche directed the DEA to work through those applications within six months. The rule indicates there is less certainty for businesses that apply after the first 60 days, because it does not guarantee they could keep operating while those initial applications are being processed.
A provision in the rule says the DEA must be the sole purchaser of marijuana, reflecting U.S. obligations under the United Nations Single Convention on Narcotic Drugs.
The rule indicates this may function largely as a paper transaction rather than requiring Oklahoma marijuana to physically change hands. After harvest, marijuana would need to be stored in a place the DEA could access if needed, and the DEA would purchase the product and sell it back to the cultivator or a designee for a fee.
It is not yet clear what that fee would be. The rule says this structure is intended to satisfy treaty requirements.
The rescheduling is also expected to make marijuana research easier. According to the rule, researchers would face no civil or criminal liability if they buy marijuana from a state-licensed medical marijuana dispensary instead of relying only on the smaller group of DEA-authorized bulk manufacturers.
The latest federal rulemaking does not set production quotas for marijuana. However, the language appears to give the DEA authority to limit total output in line with treaty obligations, though the rule does not spell out how that would work.
The DEA recently advertised that it is accepting up to 5,000 applications for new investigators around the country. The notes say it is unclear whether that hiring push is tied to marijuana rescheduling.
On April 23, the Oklahoma Bureau of Narcotics and Dangerous Drugs Control issued a statement through OBN Director Donnie Anderson. He said he sees “beneficial elements” in the federal change, including tax breaks, banking options and fewer barriers to clinical studies.
Anderson also said the added federal regulations, oversight and enforcement could help target illegal production, transport and sales tied to the black market.
At the Oklahoma Medical Marijuana Authority, Executive Director Adria Berry said officials are closely monitoring developments and working with stakeholders across the country to better understand the rule. She said there are still unanswered questions about how the federal reclassification would directly affect Oklahoma’s industry and patients, and OMMA said it is reviewing the change as it plans for implementation.
This story was created by digital audience director Diane Pantaleo, dpantaleo@oklahoman.com, with the assistance of Artificial Intelligence (AI). Journalists were involved in every step of the information gathering, review, editing and publishing process. Learn more: https://cm.usatoday.com/ethical-conduct/