Biden To Pardon Marijuana Offenses, But What Does It Mean To The Cannabis Industry?

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In a significant step towards marijuana decriminalization at a federal level, President Biden announced that his administration is granting pardons to all prior federal offenses of simple marijuana possession.

Here are the major highlights of his Oct. 6 announcement:

  • Ordered the Attorney General and the HHS secretary to initiate a process that would review if cannabis is properly scheduled on the List of Controlled Substances.
  • Announced intent to pardon those federally convicted for non-violent, minor cannabis possession.
  • Urged governors to pardon those in state jails for non-violent, minor cannabis possession.

Where can I read more about it?

The White House press release is here, and the transcript of the background briefing describing the order is here.

What does GPS think about it?

Although specifics remain thin, we believe Biden’s messaging is yet another example of regulatory tailwinds at the federal level that continue to trend in the right direction — even if the ultimate timing and form of meaningful legislative change remain uncertain.

We applaud the significant step taken by this President; however, we do not believe that this is going to quickly lead to cannabis legalization at a Federal level. We also do not know if this means Re-scheduling or De-scheduling. 

Rescheduling vs. Descheduling

Currently, marijuana is considered a Schedule 1 drug, meaning a substance that has no medical value and poses a high potential for abuse. Thus, rescheduling means switching its category to Schedule 2, a category for substances considered highly addictive but safe for medical use.

Descheduling, on the other hand, means removing it from the drug schedule entirely, so it could be treated more like tobacco or alcohol. 

Regardless, either of those encompasses a lengthy process that could go beyond 2028.

Key Takeaways: 

  • We do not see this impacting 280E, as cannabis will remain federally illegal.
  • Rescheduling cannabis could lead to the FDA as the chief regulator. That could prove challenging to state-legal operators, especially those in the recreational market. This would mean that operators should begin to look at proactively beefing up their compliance teams.
  • Pardons are important – especially for families and communities disproportionately impacted by cannabis arrests – but it is necessary to note that the federal government prosecutes very few people for nonviolent cannabis possession. What matters more is the symbolic importance.
  • We believe all of this supports our view that nullification remains the most likely path to federal legalization. This is the legal theory that the federal government has forfeited its right to police cannabis because it is not enforcing federal cannabis laws. This means each state gets to decide.
  • We worry this could derail the SAFE Act on cannabis banking. At the least, it suggests that a narrow bill that only applies to banking and insurance is most likely. This is because the President has already delivered social justice reforms. We lower our expectations of a cannabis banking bill to 60% from two out of three.