HHS Releases Unredacted Report Recommending Cannabis Rescheduling

On August 29, 2023, the U.S. Department of Health and Human Services (HHS) submitted an analysis to the Drug Enforcement Agency (DEA) recommending that cannabis be rescheduled as a Schedule III controlled substance. HHS finally made this report public in its unredacted form last Friday.

Cannabis is classified as a Schedule I drug under the Controlled Substances Act (CSA). This means it has no accepted medical use and a high risk of abuse. The HHS recommendation is significant – despite acknowledging what patients and advocates have said for decades – because it is the first official recognition of the potential medical benefits of cannabis by the federal government. The ball is now in the DEA’s court to adopt or reject HHS’s recommendation on rescheduling. While rescheduling will not legalize or permit interstate commerce of cannabis, it will unlock additional avenues for research and allow existing state-legal cannabis companies to take advantage of essential tax deductions under the Internal Revenue Code.

Rescheduling cannabis under the CSA, 21 U.S.C. § 812(b) requires three findings: (1) it has a lower potential for abuse than other Schedule I and II drugs; (2) it has currently accepted medical uses; and (3) it may lead to moderate or low physical dependence or high psychological dependence.

To inform its findings, HHS assessed eight factors outlined in 21 U.S.C. § 811(b), as applicable to cannabis:

1. Its actual or relative potential for abuse;
2. Scientific evidence of its pharmacological effect, if known;
3. The state of current scientific knowledge regarding the drug or other substance;
4. Its history and current pattern of abuse;
5. The scope, duration, and significance of abuse;
6. What, if any, risk there is to the public health;
7. Its psychic or physiological dependence liability; and
8. Whether the substance is an immediate precursor of a substance already controlled.

HHS considered a variety of data sets including privately conducted scientific studies, data on harmful outcomes associated with cannabis and other drugs, statistics submitted by state cannabis programs, and other sources of federal and private information, in making the three findings supporting their recommendation for rescheduling.  

While HHS noted that there are high levels of cannabis abuse, they also found that the effects of this abuse led to substantially less harmful outcomes when compared to other controlled substances. In determining a drug’s potential for abuse, HHS considers four criteria: (a) evidence that individuals take the drug in harmful amounts; (b) if there is a diversion of the drug from legitimate drug channels; (c) if individuals take the drug without medical advice; and (d) the drug’s similar properties to other drugs determined to have a potential for abuse. HHS found that serious effects associated with cannabis abuse were consistently less frequent and serious than other Schedule I and II drugs like heroin, cocaine, and oxycodone. HHS considered data including poison control reports, emergency department visits, overdoses, and substance use disorders.

HHS reached a similar conclusion when considering the possibility that cannabis abuse could lead to physical and psychological dependence. While clinical studies demonstrated this dependence in chronic cannabis users, there was no evidence that occasional use would lead to such dependence.

After conducting this review, HHS unequivocally concluded that cannabis is not properly classified as a Schedule I drug. Schedule I classification requires a finding that the drug lacks safe uses under medical supervision. Specifically, HHS found scientific support for therapeutic cannabis use in treating anorexia, nausea and vomiting, and pain. These studies varied in their consistency and degrees of support for their findings but provided enough data for HHS to conclude, in the totality, that medicinal use of cannabis has scientific support. HHS also considered the use of cannabis in the treatment of anxiety, epilepsy, PTSD, and inflammatory bowel disease, but did not opine on its effectiveness in treating these conditions.  

While HHS’s position is clear, it is up to the DEA to order a rescheduling after considering the eight factors outlined in HHS’s analysis.

A seldom-discussed federal treaty creates an additional wrinkle. Despite the strong scientific support for HHS’s findings, the United States is a signatory to a 1961 international treaty, the Single Convention on Narcotic Drugs (Single Convention), which requires tight control of cannabis, similar to treatment of Schedule I and II drugs under the CSA. Other signatories, like Mexico and Canada, have already legalized marijuana in breach of the Single Convention. Legal and industry experts also question its effect in a world where a majority of states have legalized cannabis for medical and adult use. However, key treaty requirements are incorporated into the CSA through 21 U.S.C. § 811(d). This provision of the CSA bars any rescheduling of drugs in contravention of the Single Convention, even if HHS finds support justifying a new classification. So, even if the DEA adopts HHS’s recommendation on rescheduling, the decision is vulnerable to challenge in court as violating the CSA, and/or as ultra vires (in excess of the agency’s legal authority).

To conclude, HHS’s recommendation to reschedule cannabis under the CSA is just that, a recommendation, albeit a symbolic victory for cannabis advocates and a significant step towards a change in federal cannabis policy. The industry is anxiously awaiting the DEA’s decision – and its broader ripple effects on federal law and policy.