On Wednesday, August 30, the US Department of Health and Human Services issued a recommendation to re-classify cannabis as a Schedule III controlled substance under federal law. The Drug Enforcement Administration is reviewing the recommendation and has final authority over re-scheduling or de-scheduling of the drug. Cannabis is currently listed as a Schedule I drug under federal law despite an increasing number of states decriminalizing cannabis laws across the country. If DEA allows the drug to be rescheduled, cannabis would remain federally prohibited, but researchers would have more flexibility in conducting studies of the drug and its effects on human health. 

The move could also allow for greater flexibility for interstate trade and help address the “280E” tax burden that prevents legal cannabis firms from taking tax deductions on ordinary business.