The Trump administration rescheduled state-licensed medical cannabis four months ago, but lawmakers in Congress are still seeking answers about the impacts of the new federal policy that they can provide to their constituents.
U.S. Rep. Dina Titus, D-Nev., led a bipartisan quartet of House members who sent the president and three of his cabinet members a letter on Aug. 18 asking for greater clarity in the federal policy that moved medical cannabis and FDA-approved cannabis products under Schedule III of the Controlled Substances Act (CSA).
The letter was also addressed to Attorney General Todd Blanche, who signed the Schedule III order on April 23, Health Secretary Robert Kennedy Jr. and Treasury Secretary Scott Bessent.
“The order marks a significant step in establishing a federal framework for certain state-licensed medical marijuana entities to register and comply with the CSA,” the lawmakers wrote. “We appreciate this development and the progress it reflects toward greater clarity in federal policy.
“As implementation moves forward, additional guidance would be helpful on several practical questions, including worker protections, patient rights, health care coverage, privacy safeguards, home cultivation and the operation of the new DEA registration system.”
Reps. Dave Joyce, R-Ohio, Ilhan Omar, D-Minn., and Greg Steube, R-Fla., also signed the letter.
While Blanche’s order leveraged what he said was his authority under the United Nations Single Convention on Narcotic Drugs – an international treaty – to immediately reschedule certain categories of cannabis under the CSA, specific guidance from federal agencies to states remains pending.
For instance, the U.S. Treasury Department announced on April 23 that it would release forthcoming tax guidance for state-sanctioned medical cannabis businesses related to Section 280E of the Internal Revenue Code, which generally disallows deductions and credits of ordinary expenses for businesses that “traffic” Schedule I or II controlled substances.
“Guidance is expected to clarify the ways in which, for businesses with multiple activities, Section 280E applies only to those activities related to trafficking in Schedule I or II controlled substances (e.g., by apportioning expenses),” the U.S Treasury announcement stated.
In other words, the future guidance should help steer state-licensed cannabis businesses that conduct both adult-use (Schedule I) and medical (Schedule III) operations on how to prepare their taxes.
RELATED: 7 House Democrats Demand IRS, Treasury Provide 280E Cannabis Guidance
While publicly traded U.S. cannabis companies like Trulieve and Glass House restructured their businesses following the Schedule III order, allowing them to list their subordinate voting shares on the New York Stock Exchange, few industry participants have that luxury.
The 280E tax picture for businesses with bifurcated operations was among the questions the bipartisan quartet asked Trump and his cabinet members to answer by Sept. 30. Here are those questions:
- How will the order affect patients currently participating in state medical marijuana programs?
- Is medical marijuana cultivated by a patient or their registered caregiver in accordance with state law currently considered a Schedule I or Schedule III substance?
- Does the DOJ anticipate coordination with the Centers for Medicare & Medicaid Services regarding Medicare coverage or reimbursement considerations for Schedule III medical marijuana products?
- Please describe how, if at all, the framework addresses health insurance reimbursement or coverage for marijuana-based treatments for patients operating in compliance with state medical marijuana laws.
- How will the order apply to operators who participate in both medical and adult-use marijuana markets? For example, certain states have a single license that covers both medical and adult use and other states have a dual license that covers both activities.
- Specifically, will such entities remain eligible for federal tax treatment changes associated with Schedule III status, including relief from Internal Revenue Code Section 280E?
- How will DEA registration and compliance with Schedule III obligations be expected to affect federal enforcement posture with respect to businesses, health care providers, workers and patients?
- How does the department anticipate federal enforcement will be handled for businesses that do not register with the DEA, and for patients who obtain medical marijuana from state-licensed businesses that are not registered under the federal framework?
- What information will be required to obtain and maintain DEA registration, and how will the DEA use that information? What safeguards will be in place to prevent misuse of this information?
As part of the April rescheduling order, the Drug Enforcement Administration’s (DEA) Diversion Control Division opened an application portal for state-licensed medical cannabis operators to register businesses and take advantage of Schedule III protections and benefits. Those who applied for registration by June 26 will receive an expedited review within six months, but it was unclear to some whether the registration was mandatory.
Separate from the scheduling order, CMS launched a CBD pilot program on April 1 to allow up to $500 per year in coverage of doctor-recommended CBD products containing no more than 0.3% delta-9 THC and no more than 3 milligrams per serving of total THC (including delta-8, delta-10 and THCA) in orally transmitted form. Inhalable products are “expressly excluded.”
Lawmakers are now asking whether the CMS also plans to cover state-licensed medical cannabis products under Medicare.
The House members said they looked forward to the White House officials’ continued efforts to advance “clear and effective” cannabis policy.
“We appreciate the establishment of a Schedule III framework for certain marijuana-related products under the Controlled Substances Act,” they wrote. “As implementation proceeds, we look forward to continued engagement and await your timely guidance to ensure clarity and consistency across all affected stakeholders.”
