Marijuana Reclassification and Legalization Update: What’s Potentially Changing in Ohio and Beyond?

A shift in attitudes and policies surrounding cannabis legalization has swept the nation in recent years, with states including Ohio establishing medical marijuana programs with eyes on broader legalization of the plant. On November 7th, Ohio voters will decide whether all adult citizens will be allowed to access marijuana at state dispensaries. Recent polls show that 3 in 5 Ohioans support the measure. 

One of the key aspects of this evolving landscape is the potential reclassification of cannabis, which could have far-reaching implications for both Ohio and the entire country. A senior official at the United States Department of Health and Human Services announced in late August that they will recommend reclassifying marijuana as a Schedule III drug. What would that mean for current measures to legalize cannabis for adults in Ohio and other states?

Reclassification: What Would it Mean?

The classification of cannabis has long been a contentious issue. Since 1970, marijuana has been categorized as a Schedule I controlled substance under the federal Controlled Substances Act, placing it in the same legal category as heroin. 

Schedule I drugs are considered to have  “no currently accepted medical use and a high potential for abuse.” This classification negatively impacts research, medical use, and legalization efforts. Psilocybin, LSD and MDMA also appear on Schedule I, despite a growing collective knowledge of their potential medical uses. 

Schedule III classification means the substance is thought to have a “moderate to low potential for physical and psychological dependence.” Drugs on Schedule III include ketamine and anabolic steroids.

The Impact on Ohio

Since the passage of HB 523 to establish the Ohio Medical Marijuana Control Program in 2016, the state has made significant strides in regulating the use of medical cannabis. However, the federal classification of cannabis as a Schedule I substance continues to pose challenges for both patients and businesses within the state.

If cannabis were to be reclassified at the federal level, it could have several significant implications for Ohio:

1. Improved Access to Research: Reclassifying cannabis would make it easier for Ohio’s research community to study the plant’s potential medical benefits and risks. This could lead to a more comprehensive understanding of cannabis and its therapeutic applications, allowing medical professionals to make more informed recommendations. This would impact universities as well. Cannabis studies programs have been established in recent years at the Ohio State University, University of Cincinnati, Hocking College, The University of Toledo, and Miami University. 
2. Banking and Financial Services: Cannabis businesses in Ohio currently face difficulties in accessing banking and financial services due to federal regulations. Operators tell us they pay high interest rates and only can work with select banks, furthering the business’s barriers to financial sustainability. Reclassification could open up traditional banking services to the cannabis industry, reducing the reliance on cash transactions and improving financial solvency. 
3. Regulatory Framework: Ohio would need to adjust its regulatory framework to align with any federal changes in cannabis classification. This could involve revisiting licensing requirements, taxation, and other aspects of the current medical marijuana program to ensure compliance with federal guidelines.
4. Economic Opportunities: Just like if the ballot measure were to pass, a shift in federal cannabis policy could create new economic opportunities in Ohio. As the industry grows, it could lead to increased job creation, tax revenue, and a boom in business development in the state. If the current state ballot measure were to pass, more than 30 percent of revenue from sales of marijuana would be directed back to Ohio municipalities that host adult use dispensaries.
5. Criminal Justice Reform: Reclassification may also have some implications for individuals with prior cannabis-related convictions, although that’s yet unclear. Advocates argue that reclassification should be accompanied by measures to expunge or reduce the sentences of those previously convicted of cannabis offenses.

Potential Drawbacks

While the potential reclassification of cannabis brings about numerous opportunities, it also poses a scourge of challenges:

1. Even if it is reclassified, marijuana would still be a controlled substance, subject to federal rules and restrictions. Only declassification would change this. 
2. Reclassification would not legalize marijuana for recreational use on the federal level. States and municipalities would still be able to legislate where, if and how marijuana can be sold and at what rate it would be taxed.
3. Rescheduling marijuana does not decriminalize marijuana, either. Equity measures, such as expungement of convictions and support for minority-owned businesses, need to be considered as a part of any reclassification efforts. Advocates echo that efforts must be made to address the social and economic disparities created by the War on Drugs. 
4. Reclassification would necessitate the development of comprehensive federal regulations for cannabis. These regulations would need to cover aspects such as quality control, labeling, and product safety. It’s not known what testing regulations could come about from reclassification.
5. Firearms Still A Sticky Issue: The Gun Control Act of 1968 “prevents” the sale of ammunition and firearms to the unlawful users of “any controlled substance”. While no list exists to cross-check to prevent a gun owner from buying cannabis at a dispensary or a cannabis user from registering for a handgun, it still remains federally illegal to do so. Reclassifying cannabis to Schedule III would not change that.
6. Still Can’t Have it On You: Legal implications of being caught possessing a controlled substance can be far reaching, including denial from loans, public housing, and child custody. 
7. Big Pharma Control: Reclassification could allow pharmaceutical companies to overtake the cannabis industry and reformulate, synthesize and market their own marijuana formulations, says one lawmaker. Some believe it’s unlikely currently cannabis producers and dispensaries could meet the production, record-keeping, prescribing and other requirements for Schedule III drugs, forcing them out.

Reclassification: The National Perspective

Beyond Ohio, the reclassification of cannabis at the federal level would have far-reaching consequences for the entire United States. Here are some potential national impacts:

1. A Patchwork of Laws: As more states move towards cannabis legalization, the federal government’s stance becomes increasingly incongruent with state laws. Reclassification could help bridge this gap and create a more consistent regulatory environment across the country.
2. Taxation and Revenue: Legal cannabis markets have proven to be a significant source of tax revenue for states. If cannabis were reclassified, it could lead to increased tax revenue at both the state and federal levels.
3. Banking: The way cannabis companies have to do business in cash has long been a barrier. The Senate Banking Committee approved a cannabis banking bill last week.The Secure and Fair Enforcement Regulation (SAFER) Banking Act will next make its way to the Senate floor. 
4. Tax Write-Offs: Moving to Schedule III could also potentially cut the federal taxes that cannabis companies have to pay. Under the federal tax code, businesses involved in “trafficking” in marijuana or any other Schedule I or II drug can’t deduct rent, payroll or various other expenses that normal businesses can usually write off. 
5. Interstate Commerce: The reclassification of cannabis could also open the door to interstate commerce, allowing cannabis products to be transported and sold across state lines, potentially increasing market competition and driving innovation.
6. International Implications: A change in federal policy could have implications for international drug treaties and agreements. The United States’ stance on cannabis has influenced drug policy globally, and any shift could trigger discussions on an international scale.

Declassification?

Is it possible that marijuana could be declassified entirely? Taking it off all schedules would be a step further toward allowing access for all adults. One of the most compelling arguments for declassifying marijuana that advocates cite is its potential to advance criminal justice reform. While declassifying marijuana has been up for debate in the past and is supported by President Biden, the Deparment of Health and Human Services is only recommending reclassifying, not declassifying it, at this time. 

Don’t Hold Your Breath

While the reclassification may sound promising, nothing has actually changed yet. It could take a very significant amount of time for the DEA to make any decision on reclassifying marijuana. However, the news is still very exciting! The potential reclassification represents a significant turning point in the ongoing debate over its legality and regulation. 

As Ohio continues to adapt their cannabis policies, lawmakers will be closely watching federal developments. Communities will be challenged in the coming decade to work together to create a balanced and effective regulatory framework for cannabis that benefits patients, consumers, businesses, and society as a whole.

Currently, 38 states, three territories and the District of Columbia have medical marijuana programs. As reclassification looms, more states continue efforts toward legalizing for adults. Among the latest to legalize are Rhode Island, New York, Connecticut, Maryland, and Missouri. Ohio would be next, making it the 24th state to legalize for adult use. 

Learn more about Issue 2 in Ohio. 

###