VIDEO: HHS Advises DEA to Reschedule Cannabis
Welcome to my Weed Report for August 31. The article below is a condensed transcript. My video contains additional details and several charts.
This week, news occurred in the marijuana industry that’s known as a BFD.
The head of the top U.S. health agency confirmed on August 30 that his agency is recommending marijuana rescheduling. In an irreverent wink to marijuana culture, he posted about the development on social media at exactly 4:20 p.m. ET.
“4/20” is a symbol of marijuana culture and the date of an annual international festival that celebrates cannabis.
In recent days, there have been several news reports and rumors that the U.S. Department of Health and Human Services (HHS) is advising the U.S. Drug Enforcement Administration (DEA) to move cannabis from Schedule I to Schedule III.
Schedule I drugs are considered the most dangerous; in addition to marijuana an example of a Schedule I drug is heroin. Schedule III drugs are considered relatively benign; an example of a Schedule III drug is Tylenol with codeine. Most health professionals don’t think marijuana should be listed as a Schedule I controlled substance.
On Wednesday, HHS Secretary Xavier Becerra officially confirmed those rumors with a post on X (the social media site formerly known as Twitter).
The Biden cabinet official has been in the habit of posting about cannabis policy on social media at 4:20 sharp. It’s hard not to see the joke…and to determine where Becerra’s true sympathies lie. They lie with marijuana legalization.
Politicians, businesspeople, lobbyists, and investors who support marijuana legal reform all applauded the move.
Becerra asserted in his post: “I can now share that, following the data and science, [HHS] has responded to [Biden’s] directive to me for the Department to provide a scheduling recommendation for marijuana to the DEA. We’ve worked to ensure that a scientific evaluation be completed and shared expeditiously.”
In response, DEA said it “will now initiate its review” taking into account the scientific findings of the U.S. Food and Drug Administration (FDA) regarding marijuana.
The DEA makes the final call and isn’t required to follow through on the HHS recommendation. But it’s a big step, and marijuana equities soared on the news.
This week in August 2013, the federal government paved the way for the legalization of marijuana in the U.S., as the Justice Department stated in a press release that it would not enforce federal law prohibiting the drug’s use in states that were initiating recreational cannabis programs.
Marijuana remains illegal on the federal level, of course, as a Schedule I drug. However, under the U.S. system of federalism, the national and state governments share power. When a federal law conflicts with a state or local law, the federal law will supersede the other law or laws, unless the federal government explicitly says it won’t interfere. That’s what we’ve been seeing with marijuana.
A decade after that momentous Justice Department decision, half of Americans live in states where marijuana is legal and another 80 million have access to medical marijuana.
The upshot: Three quarters of U.S. residents live in a state with weed that’s legalized to some degree or another. If anyone tells you they can’t find marijuana, they’re not trying very hard.
Marijuana remains federally prohibited, and yet the United States is home to the largest number of marijuana users in the world.
That’s because an increasing number of states are legalizing weed. As of August 2023, 38 states and the District of Columbia allow the medical use of cannabis products. Adult (i.e., recreational) use is allowed in 23 states and DC (see my video for charts).
Marijuana advocates are now working to get legalization initiatives placed on several state ballots in time for the 2024 elections.
But it’s not just an American story. Global consumption of cannabis is spreading around the world, as an increasing number of countries lift restrictions.
As cannabis enters the mainstream around the world, some related equity investments are superb. But many others are not. You need to conduct due diligence.
That’s where my publication, Marijuana Profit Alert, comes in. By applying my proprietary screening methodologies, I pinpoint for subscribers the most attractive plays on the “green rush.” To learn more, click here.
John Persinos is the chief investment strategist of Marijuana Profit Alert.