Valley dispensaries, cultivators react to potential cannabis reclassification

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The Biden Administration plans to reclassify cannabis, which would ease federal regulations on the drug. Since 1971, cannabis has been a Schedule I drug under the same classification as drugs like heroin and LSD.  Now, it could be reclassified to a Schedule III, under the same classification as Tylenol and steroids. Local cultivators and dispensaries agree it's a step in the right direction for the industry. 

"The marijuana stocks did very well today," said Brian Kessler, CEO of Riviera Creek. "It reflects they think there's a better opportunity in the market now that people recognize it shouldn't be so restricted."

Cannabis could be reclassified for the first time since the Controlled Substances Act became law half a century ago.

Reclassifying cannabis to a Schedule III means the drug would now be studied and researched, possibly allowing pharmacies to sell the drug in states where it's legal.

"People intuitively on the medicinal level, feel like it helps them with eating and cancer there's numerous situations where people have thought it's so beneficial," Kessler added. "Now it gives them a pathway where they get a lot more information."

Dispensaries in the Mahoning Valley agree the reclassification would come with several benefits including access to more banking opportunities and an ease of taxation on their business.

"Banking has been tricky and this will probably give banks that much more comfort to not feel like they're dealing with this dangerous illegal category," said Kessler.

"We don't get any standard tax deductions like a normal business would so we're taxed on profit that isn't profit," said Corey Groner, Owner of Green Leaf Therapy. "With the change, we'll be taxed like a normal business."

NBC News reports the reclassification would eliminate the Internal Revenue Services code Section 280E, which currently prohibits legal cannabis companies from deducting what would otherwise be ordinary business expenses.

"280E will no longer be an issue that every company has had to pay attention to," Kessler said. "So that's been at the federal level, them looking at this as an illegal activity where at the state level, it had been legalized."

"We will be treated like a local business when the 280E goes away," added Terrell Washington, Owner of Leaf Relief. "That will allow more businesses to be successful and viable. The worries of the Californias and the Washingtons of the world will be reduced. It gives us a more level playing field when it comes to operating in the business world."

"We should be able to bank at any average bank like Premier Bank," Groner said. "Right now, we bank with someone that's an hour and a half away."

Federal scientists point to credible evidence that cannabis poses lower health risks than other controlled substances. Washington added the potential reclassification is a long time coming, citing the Nixon administration ordering the Schaeffer Reports an American Medical Association advocated against scheduling cannabis as a Schedule I drug.

"It's going to allow more businesses to be successful, to be viable because we can account for all of the things that the normal businesses are allowed to deduct against their business that we're not allowed to because we were engaged in a federally illegal activity," added Washington.

Congress is considering measures that would make it easier for legal marijuana businesses to prosper, inlcuding the SAFER Banking Act and the HOPE Act.

NBC News reports Attorney General Merrick Garland will submit the rescheduling proposal to the White House Office of Management and Budget this week.

The DEA is set to formally announce the change, with a public review period planned shortly.

"It's a step in the right direction and hopefully we'll be able to make steps here," Washington added.