Biden Administration Planning to Reclassify Marijuana

The Biden administration announced it intends to reclassify the drug from its current Schedule I status to Schedule III.

The decision signals a departure from the longstanding classification of marijuana alongside substances like Heroin and Ecstasy. Instead, the drug will now be categorized under Schedule III, placing it in the company of drugs such as Ketamine and Anabolic Steroids.

While the reclassification holds symbolic significance, its practical implications are far-reaching. One of the most immediate impacts will be felt by the burgeoning cannabis industry, particularly in states like Nevada, where marijuana is legal for both medical and recreational use.

By moving marijuana to Schedule III, businesses in the industry stand to benefit from tax write-offs previously unavailable to them, alleviating a significant financial burden and potentially boosting profitability. However, the effects of the reclassification may not be immediately apparent for Nevada businesses.

Clark County Commission Chairman Tick Segerblom, a longtime cannabis advocate who claims having toked on the White House roof, said the 280E burden has significantly handicapped the cannabis industry in Nevada.

“It’s just so hard to make money when you can’t deduct your expenses,” he said in an interview.

“Hotels maybe can’t sell yet, but there’s no reason they couldn’t have a room or multiple rooms where guests are allowed to go smoke,” he said, adding that he has already discussed the idea with hotel operators.

Section 280E of the Internal Revenue Code is a tax provision that denies standard business deductions and credits to companies engaged in federally illegal activities. Meanwhile, other challenges remain, particularly in banking and financial services.