With a new presidential administration come new (and dimmer) prospects for the rescheduling of cannabis. The rescheduling process, which began under President Biden, has met with legal hurdles and will now be overseen by a group of Trump appointees that view the drug less favorably. On a new episode of Policy Outsider, Rockefeller Institute director of operations, fellow, and resident cannabis policy expert, Heather Trela, provides an update on where we are in the process, the new players, and what to expect in the coming months.
Guests
Learn More
Joel Tirado 0:00
Joel, welcome to policy outsider presented by the Rockefeller Institute of Government. I’m Joel tirado. Today’s show, we speak with Rockefeller Institute Director of Operations, fellow and resident cannabis policy expert Heather Trela about federal rescheduling of marijuana. The rescheduling process, which began during the Biden administration is now in the hands of a new cast of public servants, many of whom hold a less favorable attitude toward the drug Heather provides an update on where we are in the process the new players and what to expect in the coming months, that conversation is up next. You
Joel Tirado 0:56
all right, Heather, welcome back. This is now three, four months later, we spoke right after the election in November about the results of the election, and that’s, you know, both at the local, state and federal level, and what that what the election might mean for different policy areas across those levels of government. Now we’re a few months in, and there have been some interesting developments, especially on the rescheduling front, which is going to be where we’re focused today. So before we jump into kind of where we are with Trump’s orientation toward rescheduling and the orientation of some of his appointees. Can you give us the recap of where we were with rescheduling in the lead up to Trump’s election? Sure.
Heather Trela 1:50
So when we last spoke, it was, as you said, right after the election, Trump, as a candidate, had been favorable for the rescheduling that was proposed by then President Biden as a reminder to everyone, rescheduling was the idea of moving marijuana from a schedule one drug to a schedule three. Drug schedule one meaning having no medical use and being highly addictive to a less restrictive schedule three, which would open up some benefits for research and some benefits for the marijuana industry on tax deductions and such. Candidate Trump was also pretty laissez faire on federal involvement in legalized state marijuana. Didn’t express a huge issue with allowing that to continue as has it had been without federal interference. And his proposed pick for attorney general at the time was Matt Gates, who was very pro marijuana legalization and was very supportive of the industry. So
Joel Tirado 2:48
that’s an interesting one, because this is now Trump round two, and and his pick for attorney general in his first term was Jeff Sessions, and he was very anti marijuana.
Heather Trela 3:03
Yep, that was his first attorney general, right? I don’t think Trump, I don’t think marijuana is a huge issue to Donald Trump. I think he’s willing to let the people he appoints kind of follow their own path on these issues. So while he was not even in his first administration, was not super anti marijuana. He certainly didn’t interfere with Jeff Sessions, rescinding some memos that were productive of the marijuana industry, and generally taking a stance against marijuana legalization.
Joel Tirado 3:32
Okay, so we have some some precedent here to you know, some reason to believe that the people that the President is appointing will sort of run the show on marijuana. Yeah. So who are some of these, these, these folks, and sort of where do they stand? So,
Heather Trela 3:50
you know, the matt gates appointment did not last long, did not even make it to a hearing, and instead, President Trump pivoted to the appointment of Pam Bondi as Attorney General. She previously served as Attorney General for the state of Florida. During her confirmation hearing, she was very reluctant to take a position on marijuana. She received several questions on it from senators like Senator Booker of New Jersey, and her patented line was, if confirmed, I will give the matter careful consideration after consulting with appropriate department officials. So a non answer, not super surprising. I mean, a lot of candidates try to be non committal in their confirmations hearings. However, she does have a track record of not being supportive of marijuana. When she was Ag in Florida in 2014 she challenged the wording of the ballot measure that would legalize medical marijuana in Florida, and she’s had taken a few other actions that have not been completely supportive. So while we don’t know her positions as a federal official, it’s definitely trending that she’s probably not going to be as welcoming to changes to the marijuana positive changes. The marijuana industry, as some would have hoped, we also saw the appointment of Robert F Kennedy Jr, who’s the Secretary of Health and Human Services now, as a candidate, because RFK Jr did run for president before dropping out of the race, very supportive of marijuana. Originally said he was in favor of federal decriminalization, and thought states should be able to decide their own path on legalization. He also took it a step further later in his campaign and said that there should be some federal legalization candidate Kennedy is very different than Secretary Kennedy. Secretary Kennedy has said in his confirmation hearing that he would defer to the Department of Justice and Drug Enforcement Agency on their allocation of resources and the development of their priorities in relation to marijuana. Another non answer, yeah, very like, I’m gonna give this to someone else also. Interestingly, Senator Ricketts, who’s from Nebraska, said that he received assurances from Secretary Kennedy as part of his nomination and confirmation that he understood the importance of preventing the expansion of marijuana. Additionally, if you look at the Trump’s selection for the head of the Drug Enforcement Agency, Terrence Cole, you find someone who’s been more vocally opposed to marijuana. He spent two decades in the DEA and then retired, and then he was, most recently in the Virginia the Secretary of Public Safety and Homeland Security, appointed by Governor youngkin, who is a not a proponent of marijuana. Even though his state has legalized, he’s one of the reasons why that market has not gotten off the ground, because he keeps vetoing efforts to set up a market for the drug Cole has comes from the just say no, School of the 80s, and has not been more openly hostile to the idea of marijuana legalization. He took over from acting administrator Derek Maltz, who was also appointed by Trump, who was critical of rescheduling and thought marijuana was a gateway drug. So we’re seeing two people in a row that Trump has picked to head the DEA that have been less than supportive of marijuana and marijuana legalization. Additionally, there’s Mike Stewart, who is the lead attorney Health and Human Services. He’s nominated has not been confirmed yet. He’s a West Virginia Senator, and this position is important because it will be critical to the interpretation of the requirements for rescheduling, and he has said that he finds marijuana to be a gateway drug and it’s a dangerous drug. So again, a lot of the players who are going to come into play when we talk about rescheduling seem to be reluctant or hostile to marijuana legalization. Okay,
Joel Tirado 7:35
so, but the rescheduling process was already underway. So what power do do these different folks have to intervene on the process of rescheduling
Heather Trela 7:53
so if the process had unfolded in a nice, smooth manner, not that much? Unfortunately for that effort, it has been marred by lawsuits that have delayed and slowed the rescheduling process. Now, there were signs before under President Biden that the Drug Enforcement Agency had not bought in on his request to look into rescheduling. One of the biggest signs was that when the Notice of Proposed Rulemaking was sent out saying they were going to look into rescheduling. It was signed by Attorney General Merrick Garland, not the head of the DEA, as would be tradition. We didn’t really hear from the DEA at all in the rescheduling process at that point. So that was a clue that maybe even under the Biden administration, the Drug Enforcement Agency had not fully committed to this. However, there was a number of lawsuits that were filed that alleged impropriety or issues with the Drug Enforcement Agency in the rescheduling process. Part of the rescheduling process is there has to be public comment, which did happen, and then there also needs to be a hearing to discuss the public comment. It’s alleged that the Drug Enforcement Agency was there was bias in selecting who would provide testimony at this hearing, that it was skewing more toward those that were against rescheduling, rather than those who were supportive. Even though public comment seemed to be very in favor of rescheduling, there was also accusations of inappropriate communication with those who are against rescheduling. And there was also allegations of intentionally using outdated and legally rejected criteria to determine the medical efficacy of cannabis, which is a factor they need to consider in whether or not to reschedule. So all of these different issues were raised in different lawsuits that were then resolved to some degree early in January, because the Chief Administrative Law Judge, John Mulroney, who’s overseeing the hearings, he issued on January 13, something that’s called a interlocutory appeal. That just means not final. And what that meant was that he was going. To stop the proceedings and and the expert testimony was on hold, and that the DEA and the people who filed the lawsuit had to come up with an update in 90 days, see if they could work this out and come to a compromise that basically kicks the decision for whether this goes down the road, and the DEA could anytime stop this. So
Joel Tirado 10:20
tell me, if I’m misunderstanding some of this, the folks who brought these lawsuits against the DEA, and I know that there are many of them, and I don’t want to get mired in the details of each one, but presumably, based on what you said, these would be proponents of rescheduling, who brought the lawsuits. But in some respects, it seems they’ve shot themselves in the feet with this. By the delay, yeah,
Heather Trela 10:50
I mean, it didn’t work out exactly how they felt. They had an unfair playing field, and so I think they were trying to level it as best they could. And unfortunately, the judge took the ball, went home. So where this comes into play, as I said, is that now this is really up to this was all under the Biden administration, right? This is this was handed down January 13. Was before Inauguration Day. We have new players in new positions, and the DEA and all the other folks, the ag and the Health and Human Services Secretary, all play a part in deciding whether or not to continue this attempt to reschedule. And I’m guessing this is not going to be a priority,
Joel Tirado 11:29
okay, so we could just see kind of ongoing delays. Yes, a little bit unclear exactly they they can’t exactly kill the process, but they could just let it die out.
Heather Trela 11:39
The judge had said that the hearings, any future hearings, are canceled. So that doesn’t completely close the door, but it certainly closes the door quite a bit.
Joel Tirado 11:48
Okay, okay, all right, so that’s that’s where we are in the current moment, and what were some of the proponents of rescheduling hoping for why was this effort? Effort important? Well,
Heather Trela 12:06
you know, rescheduling, as I said, would open up the possibilities for additional research. Some of the proponents just think this is a strictly discriminatory issue, that many people use medical marijuana to deal with health issues. There’s been lots of proven benefits of that, and so to say that marijuana has no medical benefits just doesn’t seem right, and more research could help prove that there’s been limits on federal funding for research into marijuana because it’s a schedule one drug. Obviously the businesses that are in the marijuana industry wanted to benefit from some of the tax benefits that would be made available if marijuana was to be rescheduled. Currently, because of schedule one drug, they are prohibited from taking some routine business deductions that other businesses can take, like payroll taxes or payroll deductions and marketing, making it more expensive to be in the marijuana industry if you can’t get the same deductions that someone who runs a grocery store or, you know, a pharmacy could have. So that’s the 280 e clause of the tax code. And so if marijuana was moved to schedule three, theoretically, they would be able to take advantage of those deductions. And
Joel Tirado 13:17
you mentioned before, when we were speaking, before we were recording that there’s actually now some effort in the House and in the Senate to make it so that even if marijuana was rescheduled to be a schedule, three drug businesses would not be able to take those tax deductions.
Heather Trela 13:36
Correct? Yeah, this, this kind of seemed to come out of nowhere to me, but yeah, there was a bill introduced by Representative Jody Arrington of Texas in the house, who is the chair of the House Budget Committee, so has a lot of influence. And in the Senate, James Lankford of Oklahoma and Peter Ricketts of Nebraska introduced the Senate equivalent of the bill, and it’s called the no deductions for Marijuana Business Act, and that bill would block marijuana businesses from being able to take those 280 e deductions, tax deductions, even if marijuana was rescheduled, putting them at a disadvantage and losing that benefit of rescheduling,
Joel Tirado 14:21
right, which may be Now a sort of moot point, right? So then we’re in a kind of wait and see how this transpires. With rescheduling. Is there like a date that we can look out to to say this is likely to be the next time some big thing happens?
Heather Trela 14:34
So theoretically, because the judge’s order was handed down January 13, 30 days from then should be another update of some sort. So that puts us into late March, April, wait.
Joel Tirado 14:51
You said, Wait. Sorry, January 13, January, 90 days from January. 90 days, okay, 90 days from January. 3, right, so yeah, sometime in April, right, April, 3. 13 or whatever,
Heather Trela 15:01
there should be potentially some update. So that’s probably the soonest we’ll hear anything, unless, let’s just call it April 20. Just to make it let’s make it nice and clean. So I think that’s probably what the earliest we can unless, again, like I said, the new Act, our new DEA head comes out with some statement sooner than that.
Joel Tirado 15:20
Okay? And so, you know, it’s kind of back to business as usual, which is States taking this into their own hands.
Heather Trela 15:34
Yeah. And you know, we’re starting to see a slow, slow down of that as well. Fewer states at this point have are looking to 2025, to put this on the ballot. That could change, but yeah, right now it’s, you know, same old, same old. It’s a little bit of a detriment to the industry that it seemed like a step forward, and now we’re kind of back to square one.
Joel Tirado 15:54
All right. Thank you, Heather, and look forward to, you know, in a few months getting that getting that update. Great. Thanks, Joel. Thanks again to Rockefeller Institute, Director of Operations, and fellow Heather Trella, for joining us to provide an update on marijuana rescheduling follow along with Heather’s cannabis policy research at Rock ins.org/in the weeds. If you liked this episode, please rate, subscribe and share it will help others find the podcast and help us deliver the latest in Public Policy Research. All of our episodes are available for free wherever you stream your podcasts and transcripts are available on our website. I’m Joel tirado until next time you a policy outsider is presented by the Rockefeller Institute of Government, the public policy research arm of the State University of New York the institute conducts cutting edge, nonpartisan public policy research and analysis to inform lasting solutions to the challenges facing New York state and the nation. Learn more at Rock inst.org or by following Rockefeller inst, that’s I N, S T on social media. Have a question, comment or idea, email us at communications@rock.suny.edu, you.
“Policy Outsider” from the Rockefeller Institute of Government takes you outside the halls of power to understand how decisions of law and policy shape our everyday lives.
Listen to a full episode archive on Spotify, or subscribe on your preferred podcast platform.
