Biden Considers Marijuana Rescheduling: Boon Or Bust For The Industry? Former Top FDA Official Weighs In

Many observers agree that President Joe Biden's administration is poised for a historic shift in federal drug policy, that is loosening cannabis restrictions through potential rescheduling.

But the move, while seemingly a step towards legalization, has sparked concerns from unexpected corners: legalization advocates themselves.

While proponents see rescheduling as a step towards legalization, some critics argue it lacks the force necessary to mend the federal-state divide, fails to address the impacts of criminalization and could pave the way for pharmaceutical giants to hijack the medical marijuana industry, squeezing out smaller, state-licensed producers.

However, Howard Sklamberg, a legal expert and former top official at the Food and Drug Administration's (FDA) Center for Drug Evaluation and Research, dismisses these anxieties. In an exclusive interview with Politico’s Mona Zhang published on New Year’s Day, he argued that rescheduling would benefit the cannabis industry in several ways. 

Rescheduling would unlock financial growth for cannabis businesses by allowing tax deductions, Sklamberg said, referring to IRS's section 280E under which legal cannabis companies cannot deduct normal business expenses. He added that rescheduling would send a positive message by recognizing its growing public support and its medical potential by streamlining research for innovative new treatments.  

“Only through comprehensive legislation can you remove any gray zone and allow the industry to be normal. I don’t think that rescheduling is a substitute for comprehensive legislation," Sklamberg told POLITICO.

What Will Rescheduling Look Like?

Sklamberg noted that the first part of rescheduling has already happened. The FDA did a scientific and medical evaluation of cannabis and then made a recommendation to the Department of Health and Human Services (HHS). This recommendation ultimately led to HHS's August letter to the DEA recommending that it reclassify cannabis from a Schedule I to a Schedule II substance.

The DEA, which Sklamberg called "the decision maker for scheduling," has never disagreed with an HHS recommendation. "I think it’s unlikely they will do so here, though it’s certainly possible."

That said, the DEA will embark on an administrative process that will allow for public comment and public hearings. 

"DEA by statute has to defer to HHS and FDA on scientific and medical issues. So DEA is considering the broader policy and statutory framework, then finalizes its decision," Sklamberg told the outlet. "The decision then takes effect. People may challenge it in court." 

Sklamberg, now a partner at Arnold & Porter law firm, held leadership roles at the FDA from 2010 to 2017 on a variety of issues, including cannabis. He said that while there's no stated timeline for when any of this will happen, it would likely occur in the first half of 2024. 

“Agencies want to get their work done in an election year by the summer,” he said. “The DEA could accomplish it by then.”

You can find Politico’s full interview here.

Photo courtesy of Arnold & Porter law firm