The US Drug Enforcement Agency has signaled its impending approval for reclassifying THC as a Schedule III drug, which would allow companies to use the US banking system and others to conduct real research on the drug:
Even though the move, which if approved would kick off a lengthy rule-making process, does not end the criminalization of the drug, it would be a significant shift in how the government views the safety and use of marijuana for medical purposes.
It could also lead to the softening of other laws and regulations that account for the use or possession of cannabis, including sentencing guidelines, banking and access to public housing.
For more than half a century, marijuana has been considered a so-called Schedule I drug, classified on the same level as highly addictive substances like heroin that the Drug Enforcement Administration describes as having no currently accepted medical use.
Last year, the Health and Human Services Department recommended to the D.E.A. that marijuana should be a Schedule III drug, which would put it alongside less addictive substances like Tylenol with codeine, ketamine and testosterone, meaning that it would be subject to fewer restrictions on production and research, and that it could be taken with a prescription.
The news made my holdings in Green Thumb Industries jump 20% in the last hour (to, ahem, 3.5% above what I bought them for), and I'm not alone:
Moving marijuana from a Schedule I drug to a Schedule III drug doesn't make it federally legal, but it would be a significant change for cannabis businesses and their employees: it would mean instant cash flow with access to banking opportunities, as well as loan opportunities which could lead to much faster expansion of the industry in states where marijuana is legal. It would also open the door to research grant opportunities and, most importantly, end a rigid tax regime that until now has stifled growth in the highly regulated industry.
Shares for Chicago's cannabis companies jumped on the news. Green Thumb Industries shares shot up 21% to $15.22, Verano rose 18% to $5.97 and Cresco Labs went up 16% to $2.54.
Besides instant liquidity, the rescheduling could open up loans, which could lead to much faster expansion of industry in states where marijuana is legal.
Marijuana needs regulation, same as alcohol and codeine; but the fiction that pot was just as dangerous as crack cocaine has always been laughable. I'm glad the US will finally join several of its peer nations in recognizing that.