Speaking at a cannabis industry event on Thursday, Howard Sklamberg, a former Food and Drug Administration (FDA) official, emphasized the urgent need for the Drug Enforcement Administration (DEA) to reschedule marijuana, expressing disbelief if it doesn't happen before next year's presidential election. Sklamberg, the former FDA deputy commissioner for global regulatory operations and compliance, highlighted the detrimental effects of keeping marijuana under Schedule 1, stating that it not only hinders research but also creates barriers for patients seeking access to high-quality medical cannabis products.
Anticipating the DEA's final rule, Sklamberg suggested that a rescheduling decision should ideally be reached by the second quarter of the coming year. Drawing on his experience at the FDA, he underscored the importance of addressing crucial regulations before the summer preceding an election year.
Sklamberg expressed confidence that the DEA would align with the FDA's recommendation to place cannabis in Schedule III of the Controlled Substances Act (CSA). He found it unlikely for one part of the administration to contradict another on an issue deemed a significant priority.
During a webinar hosted by the American Trade Association for Cannabis and Hemp’s (ATACH) Capital Markets Council, Sklamberg, now a lawyer at Arnold and Porter, joined other panelists, including Andrew Kline and Adam Goers. The panelists shared an optimistic outlook on the potential rescheduling, considering it a positive development.
Describing the potential rescheduling as “a giant step in the right direction,” Sklamberg highlighted the unexpected progress in the last four years. One of the key benefits discussed by the panel was the potential freedom for marijuana businesses from the Internal Revenue Service (IRS) tax code rule known as 280E. Currently restricting cannabis companies from standard business deductions, a move to Schedule III could alleviate this burden.
Kline, a former policy advisor to Vice President Joe Biden, emphasized the significance of this change, stating that it would substantially reduce the tax rate for cannabis businesses. Moving from an effective 80 percent tax rate to an ordinary 21 percent tax rate could, according to Kline, lead to overnight profitability for these companies. The panelists concluded that rescheduling to Schedule III would have a profound and positive impact on the cannabis industry, addressing research barriers and providing financial relief for businesses.
This story was originally published by Marijuana Moment.