The Biden Administration has changed the game for the cannabis industry with a proposed marijuana reclassification. While not full legalization, this represents a major step forward for the cannabis industry and further cultural acceptance.
But what exactly does marijuana reclassification mean for the average small cannabis business owner? How can you take advantage of this new legal status, and what can we do to help further the process of full legalization?
We at CannaTrim are here to help you navigate these new and exciting waters. Let’s start with the most basic question.
What is marijuana reclassification?
To be clear: marijuana reclassification is not full federal legalization. Only an act of Congress can change those laws. Instead, this would change the specific laws that apply to marijuana products. This change would have several beneficial effects for the cannabis industry, which we’ll discuss in the next section.
Historically, the Drug Enforcement Agency (DEA) has classified marijuana as a “Schedule I Drug”. Per the DEA website, Schedule I drugs “are defined as drugs with no currently accepted medical use and a high potential for abuse”.
In other words, the worst of the worst illegal substances. Appropriate examples include heroin and fentanyl.
Marijuana reclassification will change marijuana to a Schedule III narcotic. The DEA defines Schedule III narcotics as “drugs with a moderate to low potential for physical and psychological dependence.” These are often drugs that have legit medical uses, but might be dangerous if overused.
Think testosterone, ketamine, or steroids.
The changes from marijuana reclassification will not take effect immediately. The Federal government moves slowly in the best of times. There will be further studies, as well as bureaucratic red tape before the change is even enacted.
Remember, right now, the Biden administration is only proposing the change. The change hasn’t actually happened yet.
But we cannot overstate how big a step this would be for the cannabis industry.
What does marijuana reclassification mean for you?
As we said before, marijuana reclassification won’t take effect for some time. In addition, we are not legal experts. Please consult a lawyer before taking any new steps, especially in a such a hazy field.
In addition, this will not affect any state laws. Marijuana remains illegal in Kansas, Nebraska, and Idaho. The fourteen states in which marijuana is only legal for medical uses are still medical-use only.
However, marijuana reclassification opens up two new exciting fields for those of us in the cannabis industry.
The first is that it will allow for more extensive government research into the health benefits of cannabis. Currently, government researchers have often relied on self-reporting of marijuana users in surveys. Not a very scientific approach.
Additional research will help confirm known health benefits of cannabis use. It will also show what we already know - that the dangers are limited. Often less than alcohol use! This scientific evidence will give us further ammunition in the fight for full legalization.
The second involves an obscure piece of the tax code known as IRS rule 280e. IRS rule 280e forbids standard business deductions to companies selling Schedule I substances. With marijuana reclassified as a Schedule III substance, your companies will no longer be subject to this rule.
Source: https://www.pexels.com/photo/hard-cash-on-a-briefcase-259027/
That’s right, marijuana reclassification is going to lower your tax burden. Speaking to Yahoo News, Curaleaf CEO Matt Darin estimated that it could save his business up to $150 million!
That’s money you can use to invest back in your business. New equipment, more personnel, and better facilities. There’s even hope this change will attract the attention of institutional investors, opening up new funding streams.
Of course, we have a suggestion for how to use that marijuana reclassification money. Put it towards things that can help bring full legalization.
We don’t want to rain on anyone’s parade - marijuana reclassification is a big deal for the industry, and we should be celebrating. However, it’s only one step on the road to full legalization.
Until full legalization, we will always be doing business in a straight-jacket. We’ll be prevented from working in some states entirely, and the banks will remain reluctant to do business with us.
How can we help further marijuana legalization?
The most important thing we can do following marijuana reclassification is to keep our noses clean and obey all the new rules and laws surrounding the cannabis industry.
In other words, we have to remain compliant.
Opponents of marijuana legalization will look for any stories they can find to continue to paint the cannabis industry as a shady enterprise. One connected with petty criminals and organized crime.
We cannot give them any ammunition to use. We must conduct ourselves professionally, legally, and most importantly, safely. A happy, safe, professional workforce is one of our greatest calling cards.
Wondering how you can use your marijuana reclassification money to further this goal?
Use high-quality compliance products
CannaTrim’s high-quality personal protective equipment meets or exceeds all industry standards. They’re comfortable, durable, and designed with the cannabis industry in mind.
They’ll keep your workers safe, your business compliant, and your nose clean so we can continue the work of full cannabis legalization.
Our competitive prices and free auto-shipping mean you can stretch your marijuana reclassification tax deductions even further. The CannaTrim team has decades of experience in cannabis production and PPE, and we think our future has never looked brighter. Learn more about how our PPE can help safeguard your compliance success. Or try our sample pack today to see the difference!
