UPDATE: President Donald Trump has just signed a groundbreaking executive order reclassifying marijuana from a Schedule I drug to a Schedule III drug, a pivotal change that could transform the cannabis landscape in Michigan and beyond. This urgent move, announced on October 26, 2023, signifies a major shift in federal policy, allowing enhanced medical research and financial relief for cannabis businesses.
During a ceremony in the Oval Office, Trump emphasized that this reclassification will facilitate crucial medical research, stating, “This classification order will make it far easier to conduct marijuana-related medical research.” Researchers like Hillary Marusak, an associate professor at Wayne State University, express optimism about the potential benefits of cannabis for conditions like anxiety and PTSD, but also underline the need for increased federal funding for such studies.
The implications are significant for Michigan’s cannabis industry. New Standard Cannabis manager Natalia Cardenas noted how marijuana aids customers with various medical conditions, indicating that advances in research could lead to improved products. “We have topicals for them, we have patches, and all that stuff is only going to get better with research,” Cardenas remarked.
A crucial aspect of this executive order involves a potential overhaul of Section 280-E of the IRS tax code, which has severely restricted business deductions for cannabis companies. “We are one of the most harshly taxed industries in the entire country,” said Nick Hannawa, chief legal counsel at Puff Cannabis Company. He highlighted that rescheduling could mean millions of dollars in tax relief, allowing cannabis businesses to operate on a level playing field with other industries.
However, the order does not legalize marijuana federally, and challenges remain. “The compliance costs of banking cannabis is high, and that’s kept a lot of banks out,” noted Ross Sloan, senior vice president for cannabis banking at Dart Bank. While the reclassification may attract new investments, consumers shouldn’t expect to use credit cards at dispensaries anytime soon.
The announcement has not been without controversy. Several Republican lawmakers voiced their disapproval, including Senators Cynthia Lummis, John Hoeven, and Lindsey Graham, who expressed concerns regarding the potential risks of cannabis usage, particularly for young people.
As the cannabis industry braces for the changes that lie ahead, all eyes are on the SAFER Banking Act, legislation that could further ease banking operations for cannabis companies. With this latest development, Michigan’s cannabis sector is poised for a transformative journey, balancing new opportunities with ongoing challenges.
Stay tuned for updates as this story unfolds and impacts the cannabis community across the nation.
