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Despite excitement over reports in late April that the DEA would give the green light to reschedule marijuana from a Schedule I to a Schedule III controlled substance, a Seeking Alpha survey indicates that change may take some time.
The survey of 928 subscribers to Seeking Alpha’s Wall Street Breakfast newsletter taken just before the rescheduling announcement was made found that 37% feel rescheduling will go through by the end of 2024. Another 63% believe it won’t happen by the end of the year.
While rescheduling wouldn’t make cannabis legal on the federal level, it would provide a boost to multi-state operators by making them eligible for tax breaks. In addition, it would make it easier to research cannabis.
Even the DEA itself has been relatively quiet on rescheduling. During a recent House hearing, DEA Administrator Anne Milgram refused to address her agency’s supposed determination. She said it would be inappropriate to do so as the formal rulemaking process is still ongoing.
And President Biden has also yet to address the reported rescheduling. During a recent press gaggle aboard Air Force One, when asked whether the president supports rescheduling, White House Press Secretary Karine Jean-Pierre sidestepped the question, responding “we’re going to let that review process continue.”
There are growing indications that moving cannabis to Schedule III — the same class as Tylenol with codeine and ketamine — will take longer than many would like. The change will first need to go through White House Office of Management and Budget review — a process that itself can take many months — followed by a public comment period.
Wall Street is also cautious. In a recent note, BTIG analysts said that the road to implementation remains “lengthy and murky” due to probably legal challenges and uncertainty over its implementation.
Multi-state operators: Ascend Wellness (OTCQX:AAWH), Curaleaf Holdings (OTCPK:CURLF), Cresco Labs (OTCQX:CRLBF), Green Thumb Industries (OTCQX:GTBIF), Trulieve Cannabis (OTCQX:TCNNF), Ayr Wellness (OTCQX:AYRWF), Verano Holdings (OTCQX:VRNOF), and Jushi Holdings (OTCQX:JUSHF).
Cannabis ETFs: AdvisorShares Pure Cannabis ETF (YOLO), ETFMG Alternative Harvest ETF (MJ), and Amplify Seymour Cannabis ETF (CNBS).
