“The cannabis industry spent years pursuing federal legitimacy. What operators are now discovering is that legitimacy often comes with regulation.”
By Joshua S. Bauchner and Marky Suazo, Mandelbaum Barrett PC
For many years, marijuana businesses primarily answered to state regulators. Now, under changes to federal policy being rolled out by the Trump administration, they will answer to the Drug Enforcement Administration (DEA).
That change began when the Department of Justice reclassified state-licensed medical marijuana from Schedule I, the federal classification reserved for substances deemed to have no accepted medical use, to Schedule III under the Controlled Substances Act. Schedule III consists of substances recognized as having accepted medical uses and usually carries fewer restrictions than Schedule I. There are also parallel, but separate, proceedings regarding the broader federal treatment of marijuana.
Nearly all the attention regarding these developments has focused on the potential benefits of rescheduling, including tax relief and greater institutional acceptance. But another important consequence has escaped the limelight: the federal government’s increasing involvement in the day-to-day regulation of the cannabis industry.
The industry’s challenge is not just whether federal reform will occur; it is already underway. The challenge is determining how to operate, how to invest and
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