Nathaniel Gurien : Medical Cannabis 100 Percent Federally Legal

On April 23, the U.S. Department of Justice and its Drug Enforcement Administration published a final rule that declared marijuana 100 percent federally legal when either FDA-approved and prescribed by a doctor or as recommended by an authorized medical provider in compliance with a state medical cannabis program.

Marijuana is listed under the Controlled Substances Act as a Schedule 1 narcotic, along with other drugs such as heroin, LSD and quaaludes, that have no currently accepted medical use and a high potential for abuse. Schedule 2 drugs have accepted medical uses but still have a high potential for abuse, such as cocaine, methamphetamines, oxycodone and fentanyl. Schedule 3 drugs also have accepted medical uses but a moderate to low potential for abuse, such as anabolic steroids, ketamine and Tylenol with codeine.

For the last year, there has been strong momentum to move marijuana from Schedule 1 to Schedule 3, and several months ago, President Donald Trump issued an executive order to the DEA to do so. He forcefully reiterated this order a few weeks ago, but until April 23, it appeared that the DEA was continuing to slow-walk the process, and conventional wisdom was that at least another year would pass before it actually happened.

The April 23 final rule caught nearly everyone by surprise. Moving from Schedule 1 to Schedule 3 was expected to have the limited effect that federally sanctioned pharmaceutical research and clinical study could proceed, and once the FDA eventually approved specific formulations, then physicians could prescribe and pharmacies could dispense those prescriptions. In other words, it legalized the birth of a pharmaceutical channel for cannabis that could take shape over the following 5-10 years.

It would also have the effect of ending the applicability of an IRS provision affecting businesses trading in Schedule 1 and 2 drugs that, up to now, has suffocated the profits of state-legal cannabis businesses.

But the DOJ and DEA went further via the April 23 final rule, taking the novel approach that state medical programs already maintain high levels of regulation and oversight, functionally and sufficiently similar to the traditional pharmaceutical sector of drug manufacturers, distributors, pharmacies and medical providers.

So medical providers can now certify patients (a de facto prescription) as qualified to possess and consume cannabis when purchased from a state-licensed medical dispensary (a de facto pharmacy), conveying the same legality as Tylenol with codeine.

What is the practical meaning and effect of all this?

Most importantly, medical cannabis is now 100 percent federally legal, although recreational and adult use is not, and the businesses engaged in recreational production and sales are still subject to the many suffocating restrictions by remaining in Schedule 1. The DEA is continuing the slow bureaucratic process of also moving recreational cannabis to Schedule 3, but when that happens, the only additional benefits those businesses would enjoy are relief from the burdensome IRS tax provisions, since they have no mechanism for certifying (prescribing) for medical purposes.

Big news is that holders of valid, state-issued medical patient cards are no longer subject to any restriction on their Second Amendment rights, effective immediately. In fact, presenting a valid patient card to a firearms dealer now constitutes proof of this and can now truly be considered a Cannabis Carry License™. Medical cannabis patients are also now free to transport their cannabis medicine across state lines, on aircraft or internationally as they wish.

Medical cannabis licensees are relieved of their previous IRS tax burdens, and the DOJ has even recommended that the IRS strongly consider refunding retroactively previous years’ taxes paid under the now-inapplicable provision, resulting in potential cash windfalls for many affected businesses.

Traditional banking, lending, credit card and other financial services will soon become readily available to medical cannabis businesses, as will other avenues previously barred to both medical cannabis patients and businesses, such as access to federal grants, loans, mortgages, employment, relief in federal courts including the right to file for bankruptcy protection, access to the stock market and traditional investment accounts, access to traditional sources of capital and investment, insurance and more — in other words, the right to operate as fully legal individuals and enterprises.

As if that is not enough, this final rule also legalizes import and export of medical cannabis, so our cannabis businesses will be able to obtain a DEA license to trade with other countries, and when individual states update their laws, with them as well. Importantly, this will allow U.S. businesses to finally enter and compete in the national and international markets.

And of course, here in New Hampshire, it is easy and virtually free for anyone to qualify and obtain certification as a medical cannabis patient. Also, it is looking like we will begin patient home delivery of medical cannabis by this fall, so travel to one of the few medical dispensaries in New Hampshire or out of state will no longer even be necessary. Exciting times indeed!

Nathaniel Gurien lives in Sandwich and is executive director of the NH Cannabis Party. He can be reached at nathaniel@nhcannabis.org.