How reclassifying marijuana could impact Washington state
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Aïda Amer/Axios
A proposal to reclassify marijuana as a less dangerous drug could have a major impact on cannabis enterprises in Washington state, industry officials say.
Why it matters: The proposal could give workers and owners the same financial tools available to other legal businesses, which in turn could lower the number of robberies and burglaries at retail stores, said Aaron Pickus of the Washington CannaBusiness Association.
- Rescheduling could allow cannabis companies to deduct business expenses on their taxes, which would particularly help retail stores that typically operate on very tight margins, Pickus said.
What they're saying: Pickus told Axios via email that the proposed rescheduling is a milestone "that is short of legalization but brings legal businesses and workers across our country closer to a world where they are held to the same expectations as any other legal industry."
- The state Liquor and Cannabis Board said in an emailed statement that it supports the proposed change, which could ease restrictions on cannabis research and be "a big step for recognition of the medical uses of cannabis."
Catch up quick: The U.S. Drug Enforcement Agency is recommending that cannabis be reclassified as a Schedule III drug, codifying that it has medicinal value and is less dangerous than its current Schedule I designation.
- Schedule III drugs have "a moderate to low potential for physical and psychological dependence," and include Tylenol with codeine, ketamine, anabolic steroids and testosterone, per the DEA.
The intrigue: Because of marijuana's current Schedule I classification — the same level assigned to heroin, LSD and methaqualone — the IRS prohibits dispensaries from writing off business expenses, according to industry experts.
- Many federally regulated banks refuse to do business with marijuana companies because the drug is illegal under federal law, reports Axios' Emily Peck.
- That means cannabis companies cannot get credit card services, forcing them to deal with the inconveniences and dangers of all-cash transactions and increasing their vulnerability to crime.
Yes, but: Though the move could clear regulatory obstacles and set the stage for major policy changes that would allow the cannabis industry to access banking services, it's uncertain how quickly that would happen.
What we're watching: The DEA plan still requires approval by the White House Office of Management and Budget.