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‘Overcoming reefer madness’: Feds appear poised to ease restrictions on weed. Here’s how the change could impact Washington.

If Feds act, cannabis would become a Schedule III drug, along with anabolic steroids and ketamine

By Ellen Dennis, The Spokesman-Review
Published: May 2, 2024, 8:40am

The U.S. government is moving toward reclassifying marijuana as a less harmful drug, a federal spokesperson confirmed this week.

If finalized, this change in classification by the U.S. Department of Justice would federally recognize the medical use of cannabis. It would not federally legalize the drug for recreational use, however.

“Today, the Attorney General circulated a proposal to reclassify marijuana from Schedule I to Schedule III,” Justice Department director of public affairs Xochitl Hinojosa said in a statement sent to The Spokesman-Review on Thursday afternoon. “Once published by the Federal Register, it will initiate a formal rulemaking process as prescribed by Congress in the Controlled Substances Act.”

Right now, it is legal to purchase recreational marijuana in 24 states, including Washington. Medical marijuana is legal in 13 states plus the 24 where recreational weed use is permitted.

In 2012, Washington and Colorado became the first states to legalize recreational cannabis distribution. Yet weed sellers and lawmakers in Washington state say the cannabis industry faces unfair hurdles that other tax-paying businesses do not.

What do the drug schedule levels mean?

Schedule I substances are defined by the federal Drug Enforcement Administration as drugs with no currently accepted medical use and a high potential for abuse. Right now, weed sits on the Schedule I list alongside heroin, peyote, lysergic acid diethylamide (LSD), and 3,4-methylenedioxymethamphetamine (ecstasy), methaqualone.

Schedule II drugs are defined by the government as dangerous drugs with a high potential for abuse, with “use potentially leading to severe psychological or physical dependence.” Examples of Schedule II drugs include fentanyl, oxycodone (Oxycontin), methamphetamine, Adderall and Ritalin.

Schedule III substances are defined as drugs with a “moderate-to-low” potential for physical and psychological dependence,” the government says. Examples of Schedule III drugs include ketamine, anabolic steroids and testosterone.

What would rescheduling do?

Sharon Frasca has worked as an assistant store manager at the North Spokane Cinder Recreational Cannabis Dispensary for 5 years. The Spokane County resident said rescheduling the drug would be a huge positive for people who work in the weed industry.

“It would open up a whole lot of avenues,” Frasca said in a phone interview, “like federal funding, and loans and all kinds of things like that, right, that a lot of companies have had access to.”

When the COVID-19 pandemic shut down many parts of the country and world, Frasca said weed stores weren’t able to access emergency support funds from the federal government due to pot’s Schedule I status. As a result, business owners and employees of weed shops across the country suffered and faced financial hardships in a way that restaurant and brewery staff did not.

Rescheduling would also help break down stigma surrounding cannabis, Frasca added.

“The Schedule I makes weed seem really, really scary,” she said.

Elected officials across the aisle in Olympia expressed mostly resounding support for the rescheduling when speaking to The Spokesman-Review this week, including the office of Gov. Jay Inslee. Governor’s office spokesperson Mike Faulk told The Spokesman-Review that the change likely won’t impact how individual states regulate their industries, but that potential federal income tax breaks may be the “most welcome” piece of the news for businesses in Washington state.

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“We still need more federal reform, including legislation like the SAFE Banking Act,” Faulk wrote, “so these businesses no longer have to do transactions in cash only.”

The Secure and Fair Enforcement Regulation Banking Act is a proposed federal law that would ensure that all businesses — including state-sanctioned weed stores — have access to deposit accounts, insurance and other financial services.

Pot shops in Washington by law may only take payments in cash form, leaving them vulnerable to armed robberies. Some store owners across the state have done their best to keep the environments safe for workers, including installing panic buttons behind the counters and ramping up security systems, but the best way to bolster safety would be to allow cannabis sellers to accept debit and credit card payments, industry players say.

It is possible that rescheduling could allow the cannabis industry to claim business deductions on federal tax forms, since the Internal Revenue Service doesn’t allow that for any business that sells a Schedule I controlled substance.

What do state lawmakers think?

State Sen. Jeff Holy, R-Cheney, said more than 12 years of legal weed in Washington state has built a solid base of science and information to show that cannabis should never have been a Schedule I drug.

“A lot of times it’s not what the change is,” Holy said. “It’s just the change that is uncomfortable. I think that we’re adapting. I’m kind of hoping that the federal government actually adopts a common-sense approach as to the current state use of marijuana.”

State Sen. Tim Ormsby, D-Spokane, called the potential rescheduling “long overdue.”

“We’re still overcoming reefer madness,” Ormsby said. “This should make it a lot easier for the cannabis shops and workers to be more mainstream and more main street.”

State Sen. Mark Schoesler, R-Ritzville, said he would rather see the federal government prioritize raising some Schedule II drugs to Schedule I classification over rescheduling cannabis.

“Fentanyl is level two,” Schoesler said. “I mean, the greatest danger in our country that we should really be worrying about. … With the things I’m seeing statistically about fentanyl, I’d be worrying more about fentanyl more than I would about cannabis.”

The Washington State Liquor and Cannabis Board on Wednesday released a statement to The S-R expressing support for the potential rescheduling of cannabis.

“Moving cannabis to Schedule III would be a big step for recognition of the medical uses of cannabis, what voters here recognized by a wide margin in 1998,” the statement reads. “And it would say very clearly that the federal government no longer considers cannabis among the most dangerous drugs.”

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