If Marijuana is Legalized Tomorrow What Would Happen?

The Drug Enforcement Agency (DEA) recently rejected a petition from the Department of Health and Human Services (DHHS) to reschedule marijuana from Schedule I to Schedule II under the Controlled Substances Act. After the DEA decision was released, Hillary Clinton’s campaign issued a statement that if elected, marijuana would be rescheduled. We’ve covered Clinton’s stance before.

The DEA’s decision was met with expected controversy.

Each state can determine its own approach to marijuana and other drugs in regards to determining criminal penalties, availability, and consumption. Only a few states have outright legalized marijuana: Alaska, Colorado, Oregon, and Washington. Several states have introduced measures to decriminalize it (but not legalize it) and many have elected to allow individuals to access medical marijuana.

How does scheduling affect medical marijuana?

To answer that question, we must first set the scene. The Controlled Substances Act (CSA) was passed by Congress in 1970 to establish the federal government’s drug policy. It charged the DEA and Food and Drug Administration (FDA) with determining where to place drugs and other substances for regulatory purposes. Drugs are assigned to various schedules based on potential for abuse.

Schedule I drugs are the most regulated and have the highest potential for abuse, while Schedule V drugs have the lowest. Depending on where a drug or substance falls also determines whether or not it can be prescribed as a treatment for conditions by doctors and this also affects its availability for research purposes. Schedule I drugs include Heroin, Cocaine, and other highly-addictive substances.

Schedule I drugs and substances have no medical use according to the DEA, which is a contrast to what studies are showing about medical marijuana.

Jacob Sullum of Reason brings up an interesting point: marijuana can be rescheduled once it’s proven through large scale clinical trials but the government holds a monopoly on supply. This makes such studies and research rather difficult. The DEA can choose how it applies and enforces its policies, but has a history of denying such rescheduling petitions.

Until then, doctors in states with medical marijuana can only make recommendations for treatment and must direct patients to licensed dispensaries.

Let’s take a look at a hypothetical: marijuana will be federally legalized tomorrow; now what happens?

  • The first thing would be that more universities and researchers would have access to the substance. The DEA would no longer have absolute authority on supply.
  • The government would be able to take advantage of billions in additional tax revenue. It’s estimated that the government would collect an estimated $8.7 billion in income and sales tax.
  • Several industries would be able to capitalize on it, including tourism; equipment companies; and more. Banks would be able to accept marijuana-based money. Federal law prohibits banks from accepting money from marijuana, and even though the Department of Treasury has relaxed these bans, many banks are unsure whether or not they want to assume risk. Credit card companies like Visa and MasterCard cannot process cannabis-linked transactions.
  • Violence and crimes would decrease (in theory) and it’s thought that cartels and gangs would be severely weakened. This would free up room in many overcrowded prisons and ease the burden on many court systems.
  • Strained government programs such as Medicaid and Medicare would have a decrease in their spending with more people electing to use marijuana-based treatments than traditional pharmaceuticals, therapies, and surgeries. Combined with the increased revenue from taxes, the government would be able to fund other areas.
  • In theory, it would create more jobs and companies would finally be able to take advantage of tax breaks not currently afforded to them. Job protections would also be extended to those using it medicinally and likely even recreationally.

It’s unfortunately not all sunshine and rainbows as legalization of marijuana would have a huge impact on regulations:

  • The FDA and other federal (and state) agencies will certainly pass down regulations. It’s more than likely that marijuana would be categorized as pharmaceuticals and have to adhere to those regulations. This includes requiring new strains to go through multiple rounds of clinical trials, apply for approval, and implement manufacturing controls. Manufacturers would be required to record origins of active ingredients, adhere to labeling and distribution requirements, and would be liable for recalls. This would severely impact small businesses based on the associated costs of compliance and they would almost certainly be directly competing with large pharmaceutical companies with near-bottomless pockets or seemingly endless resources. Ricardo Baca of The Cannabist shares the same sentiment.
  • The FDA would be stretched even thinner than it is now. Thousands (or more) companies would be on its radar to inspect and audit, which would require more federal resources to be diverted to the FDA. It would also require the agency to add cannabis industry experts to its ranks.
  • Regulators and lawmakers might try to outlaw a different aspect of marijuana. Right now, the crux of the issue centers around THC.
  • Citizens might be ecstatic, but states might not be so happy. Historically speaking, states have been unhappy with sweeping policy changes and prefer to be the masters of their domains. It’s possible that there could be several legal entanglements and maybe a full-on Constitutional challenge. Some federal policies have been voted in but later repealed by the Supreme Court (or other lower courts) on the basis of violating states’ rights. Anti-marijuana Senators, Representatives, and Governors (link to Trump cannabis article here) would be the ones first in line.
  • All of this would affect how the government adjusts its drug policy and might have an unintended ripple effect of other Schedule II drugs moved to Schedule I. Lawmakers, agencies, and others would be scratching their heads asking, “What now?” Many would say that it is about time that the government reevaluated its beliefs on drugs.

Complete legalization of marijuana might remain something of our dreams for the distant future, but it’s more than likely that moving from Schedule I to Schedule II is on the horizon. Rescheduling is not the same as outright allowing it, but would pave the way for further initiatives now that researchers can perform their much needed studies. Whether marijuana is rescheduled or legalized, it’s guaranteed that regulations related to manufacturing cannabis-based products will be passed down. We’ve seen it with dietary supplements and now e-cigarettes.

Then what?

Regulations can be incredibly daunting and intimidating for companies that don’t come from a pharmaceutical background. InstantGMP™ MES was created by Dr. Richard Soltero to educate and provide manufacturers with the software they need for electronic manufacturing in compliance with FDA regulations.

Our software, Standard Operating Procedures (SOPs), and consulting aren’t limited to only existing regulations – they also aid manufacturers in better understanding their processes, addressing inefficiencies, and simplifying production. We invite you to sign up for a personalized demo where we will walk you through how your organization can benefit from our software and other solutions