Weed Industry Celebrates Biden's Rescheduling Move: 'Most Monumental Cannabis Reform In Half A Century'

Cannabis companies and legalization advocates are applauding President Joe Biden's Thursday announcement that formalizes the rescheduling process that will finally move cannabis from the DEA's Schedule I to Schedule III.

"This change represents a major leap forward and an opportunity to correct a long-standing wrong which has disproportionally impacted marginalized communities, inhibited research, and restrained the responsible growth of the U.S. cannabis industry," said David Klein, CEO of Canopy Growth CGC.

“In addition to setting an important precedent and paving the way for additional reform including full legalization, rescheduling is especially significant as it provides an immediate and significant improvement to the cashflow of all state-legal cannabis businesses including those within Canopy USA."

Kim Rivers, CEO of Trulieve TCNNF, didn’t hold back. “Today is historic!” she said.

"Today is historic! Cannabis is moving to schedule III. We applaud the President and his administration for making federal cannabis reform a priority." – CEO @rivers_kim pic.twitter.com/afZV4smOby

— Trulieve (@Trulieve) May 16, 2024

The transformative news for the cannabis market comes ahead of Benzinga’s Cannabis Capital Conference, which returns to Chicago Oct. 8-9. 

David Hart, CEO of The Cannabist Company CBSTF, one of the largest and most experienced cultivators in the U.S., called Thursday's news momentous.

"Our federal government has finally formally accepted that cannabis has medicinal value and is following the science that we in this industry have understood and poured our collective passion into while supporting this movement and building our businesses."

Hart noted the benefit of moving cannabis to Schedule III in terms of taxes. “The end of the 280E tax code for cannabis businesses will allow us to operate our business more sustainably and reinvest more deeply into our teams, innovation, and product development to benefit the communities we serve,” he said.

With cannabis categorized by the DEA as a Schedule I substance, cannabis companies have not been allowed to deduct normal business expenses.

Legalization Advocates Praise Biden’s Move

The first and the oldest cannabis legalization advocacy group in the U.S., the National Organization for the Reform on Marijuana Laws (NORML), posted this to X:

🏛 @POTUS @JoeBiden has formally endorsed a proposal by the Justice Department to reclassify ‘botanical cannabis' from Schedule I to Schedule III under the federal Controlled Substances Act, calling the proposed change "monumental."⁠ https://t.co/z1qwJHzber

— NORML (@NORML) May 16, 2024

Saphira Galoob, executive director of the National Cannabis Roundtable, said cannabis should never have been classified a Schedule I substance.

"With the submission of the proposed rule today, the formal administrative process to remove cannabis from the strictest of classifications – where it never belonged – we are moving closer to seeing the most monumental cannabis reform in half a century come to fruition," Galoob said.

"This is an acknowledgment by the multiple federal agencies of what the 38 states with medical programs, 30,000 medical practitioners recommending cannabis, and 6 million medical cannabis patients have long known: cannabis has medical value."

Bryan Barash, co-chair of Coalition for Cannabis Scheduling Reform (CCSR) and deputy general counsel at Dutchie called the move a "huge victory for everyone who has worked to normalize federal cannabis policy and begins the process of federal support for state cannabis markets. Most importantly, for the first time the federal government recognizes the overwhelming evidence of the clear medical benefits of cannabis."

And Did We Mention Cannabis Stocks Jumped On The News?

Canopy Growth, Aurora Cannabis Inc. ACB and Tilray Brands, Inc. TLRY are trading higher on the news. Smaller marijuana-growers, including IM Cannabis Corp. IMCC, and ancillary pot-plays, like Leafly Holdings, Inc. LFLY also took flight. 

Cannabis ETFs, including the AdvisorShares Trust AdvisorShares Pure US Cannabis ETF MSOS and the Amplify ETF Trust Amplify Alternative Harvest ETF MJ are also up, with both ETFs trading about 2.5% higher heading into the closing bell Thursday.

Read more on this news: Weed Stocks Rally After Biden Makes Marijuana Reclassification Announcement

Image: Benzinga edit with Shutterstock photo.