The rescheduling clock is ticking

But for how long, exactly?

Good morning.

It was fun while it lasted: It looks like a fair amount of cannabis stockholders sold the rescheduling news yesterday. 

But a big news week continues.

Today, we’ve got yet another cannabis bill introduced in the Senate, more details on a potential timeline for rescheduling, and a look at the next Farm Bill — which could have big ramifications for hemp.

And if you missed it, check out our Cultivated Live from yesterday, breaking down everything we know about what Schedule III means for the industry, with some of the industry’s top voices including Safe Harbor Financial CEO Sundie Seefried, Ayr Wellness CEO David Goubert, and more.

-JB & JR

This newsletter is 1241 words or about an eight-minute read. 

💡What’s the big deal?

What we know about the rescheduling timeline

What happened: If you’re reading this newsletter and you haven’t been living in a cave for the past 24 hours, you already know the big news — the federal government will reclassify cannabis to the less restrictive Schedule III.

If you want to know what that means for you, your business, and for cannabis policy more generally, we’ve got you covered. The Department of Justice also clarified to Marijuana Moment on Tuesday night that Schedule III will be the new classification. 

We’re going to share what we know about the potential timeline of when this is all going to happen. Keep in mind, this is a living, breathing process — what’s true today could change tomorrow. 

The timeline: Let’s start with the bad news. There are multiple, lengthy steps to get from the Drug Enforcement Agency’s proposed rule, to an actual reclassification as we outlined yesterday.

The entire process could take as little as a few months, and be done and dusted prior to the election in November. Or, it could take more than six years. 

The White House Office of Management and Budget has 90 days to review the rule. The next step, a public comment period, will last 60 days. If the DEA has to respond to comments, that could take months, if not years, to wade through. 

Then, once the final rule is issued, there will be a judicial review. That’s when anti-cannabis groups are almost certain to challenge rescheduling in court. 

And, the court could stay the proposed reclassification while the challenges play out — which could take up to three years, Politico’s Natalie Fertig reports, citing administrative law and cannabis expert Shane Pennington. (Unpaywalled tweet here).

That’s the bad news. 

The good news? Like anything in cannabis, not everyone agrees. Howard Sklamberg, a former top Food and Drug Administration official, said he believes cannabis could be moved to Schedule III before November, in a National Cannabis Roundtable webinar yesterday.

The final word: Both Sklamberg and Pennington know what they’re talking about. That means that this process is so unprecedented — reclassifying a drug that millions of Americans have legal access to and consume every day but the federal government treats like heroin — that no one can say with any certainty what exactly is going to happen. 

We can only look to the process, and hope the federal government sees the shot clock ticking.


🗨️ Quote of the day

“To achieve true federal decriminalization, marijuana must be removed from the Controlled Substances Act (CSA) by descheduling it. Descheduling marijuana is the only way to end federal prohibition and the harms it’s causing to our communities,” Maritza Perez Medina, of the nonprofit Drug Policy Alliance, said in a statement. 

The Drug Policy Alliance supports full legalization over rescheduling as the organization’s primary concern is criminal justice reform, which rescheduling does little-to-nothing for. 

Top Dems reintroduce legalization bill

What happened: Top Senate Democrats, including Majority Leader Chuck Schumer, and Sens. Cory Booker and Ron Wyden, reintroduced the Cannabis Administration and Opportunity Act yesterday.

The bill, if passed, would go much further than reclassifying cannabis to Schedule III.

It would fully remove cannabis from the list of Controlled Substances — effectively decriminalizing it federally — and create a new federal tax and regulations around selling cannabis. 

What they’re saying: “Reclassifying cannabis is necessary, and it’s a long overdue step, but it’s not the end of the story. It’s not all we need to do. It’s time for Congress to wake up to the times and do its part by passing the cannabis reform that most Americans have wished for,” Schumer said at a Wednesday press conference. 

Why it matters: Democrats clearly care about pushing cannabis reform ahead of the election. The issue is polls strongly with young voters, who Biden is desperately trying to reach before November given his Administration’s unpopular stances on a certain foreign conflict. 

As well, Biden, Schumer, and other top Democrats have been pushing for reform for years. Voters aren’t going to take them seriously if they can’t get anything done. Biden promised to reform cannabis laws in 2020, and reiterated that promise in this year’s State of the Union

After yesterday’s news, this is yet another move to show voters that they’re serious. But, it’s also the second time lawmakers have tried to get this bill passed in the Senate.

It never received a full floor vote the last time around in 2022. While this is a different Senate, the prospects are still dim: If a relatively narrow banking bill like the SAFER Banking Act can’t get passed, the prospects for a much broader bill are dim.

The final word: The CAOA (terrible acronym), is probably a more symbolic and political move than a real attempt at legalizing cannabis. 

It’s still not for nothing that the Senate Majority Leader continues to push for legalization. It could be the start of a process that leads to a compromise bill that’s more palatable for the Senate’s septuagenarian Republicans.

Though outgoing Sen. Mitch McConnell remains a clear obstacle, as he has publicly said. 

On the other hand, Sen. John Thune told Bloomberg yesterday that chances are “very strong” that Congress passes the SAFER Banking Act, either as standalone legislation or attached to a broader must-pass spending bill this year. 

We’ll see.


Quick hits

We’ve got a look at the draft text of the next iteration of the Farm Bill, the old version of which legalized hemp production back in 2018. The new version would strengthen the hemp industry — but doesn’t mention anything about the quasi-legal hemp derived intoxicating cannabinoids like Delta-8, reports MJ Biz Daily

The New York Cannabis advisory board will hold its next meeting on May 7 in Buffalo. Details on the Office of Cannabis Management’s website

🚀 Deals, launches, partnerships

Nova Farms, which says it’s the Northeast’s largest private cannabis company, landed a $20 million investment from Chicago Atlantic, the same fund that’s lending to New York’s social equity entrepreneurship program. 

Illumination Brands, formerly CBD Life Sciences, said it plans to merge with the Nasdaq-listed Hempacco Inc

California’s Punch Edibles and Extracts will acquire Tempo Crackers, a cannabis snack company. Financial terms of the deal weren’t disclosed. 

Goddess Growers, a woman-owned cannabis brand, is launching in Ohio. 

Animal, a cannabis lifestyle brand, is launching in New York.

📰 What we’re reading

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