The U.S. Drug Enforcement Agency’s proposal to reschedule cannabis from a Schedule I to a Schedule III drug under the Controlled Substances Act (CSA) has generated considerable buzz across business sectors, including for the banks and credit unions that see opportunity and challenges in transacting in the legal marijuana space. Legality varies by use and by state, while federal law limits how financial institutions can operate.
Continue Reading What Would Cannabis Rescheduling Mean for Lending and Payments Legality?

Despite the excitement of many over rescheduling cannabis from Schedule I to Schedule III, the move does not make cannabis “legal” unless it is produced, sold, and used within the tightly regulated parameters of the Controlled Substances Act (CSA). Many medical and adult-use cannabis stores and products that currently exist in approximately four-fifths of the United States are not in compliance with the CSA. These businesses violate federal law now, and they will still be violating federal law if and when cannabis is rescheduled; rescheduling does not make the conduct federally legal.
Continue Reading Impacts of Cannabis Rescheduling on Bankruptcy

The Department of Justice’s move to reclassify marijuana as a less dangerous drug, on which it began formal proceedings on May 16, won’t legalize state-level adult-use and medical marijuana unless it’s produced, sold, and used within the regulations of the Controlled Substances Act. Banks and other financial institutions may have questions on how these changes could affect their ability to service cannabis businesses.
Continue Reading Marijuana Reclassification Impacts Bank Servicing of Businesses

Once rescheduling occurs (or possibly even before), the IRS may publish guidance on how rescheduling affects Section 280E and the deduction of marijuana-related expenses. In the meantime, cannabis businesses may consider working with their tax professionals on how best to time paying or incurring marijuana-related expenses, as well as to submit all necessary documentation to preserve their rights to obtain refunds for taxes previously paid under 280E.
Continue Reading Paid or Incurred: Marijuana Rescheduling, Taxes, and Section 280E

On May 21, 2024, the Drug Enforcement Agency (DEA) filed the Proposed Rule to move marijuana from Schedule I of the Controlled Substances Act (CSA) to Schedule III of the CSA. In light of the rescheduling marijuana news, industry insiders anticipate a significant increase in cannabis-related investments and acquisition activity. While this anticipated increase in activity is exciting, it is no secret that those who have already invested capital into the cannabis industry have learned some hard lessons over the last decade.
Continue Reading Rescheduling Marijuana FAQs: Cannabis-Related Investments

On May 16, 2024, the U.S. Drug Enforcement Administration (DEA) released the proposed rule (Proposed Rule) to reschedule marijuana from Schedule I to Schedule III under the Controlled Substances Act (CSA). The Office of Legal Counsel (OLC) also provided a memo to the Department of Justice (DOJ) supporting the DOJ, which oversees the DEA and grants the DEA authority to make rules under the CSA to the DEA.
Continue Reading Rescheduling Marijuana FAQs: How Do I Submit Comments on DEA’s Proposed Rules?

At the White House last Friday, Vice President Kamala Harris spoke at a meeting with people who received pardons from President Joe Biden for marijuana-related offenses. She signaled that the federal government, namely the Drug Enforcement Administration (DEA), is moving “as quickly as possible” towards rescheduling marijuana – that is, changing the way

Continue Reading What is the Timeline for Rescheduling Marijuana?

Last week, the Department of Health and Human Services (HHS) released the full text of its letter (HHS Letter) to the Drug Enforcement Administration (DEA), recommending marijuana rescheduling from Schedule I to Schedule III. Schedule I substances are deemed to have no currently accepted medical use (CAMU) and

Continue Reading DEA is Going to Have a Hard Time Fighting Marijuana Rescheduling

In late August, the U.S. Department of Health and Human Services announced that it would recommend moving marijuana from Schedule I to Schedule III of the Controlled Substances Act. In this episode, corporate cannabis attorney Daniel Shortt moderates a discussion with tax attorney Douglas Charnas and financial services regulatory attorney

Continue Reading Podcast: Tax and Banking Implications of Rescheduling Marijuana