The governors of six U.S. states—Colorado, Illinois, New York, New Jersey, Maryland and Louisiana—sent a letter to President Joe Biden (D) on Tuesday urging the administration to reschedule marijuana to Schedule III of the Controlled Substances Act by the end of this year. The move, they say, will provide economic and tax benefits for cannabis businesses, protect public health and more closely align government policy with public opinion.
“Rescheduling cannabis aligns with a safe, regulated product that Americans can trust,” says the governors’ letter, which points to a poll that found 88 percent of Americans support legalization for medical or recreational use. “As governors, we might disagree about whether recreational cannabis legalization or even cannabis use is a net positive, but we agree that the cannabis industry is here to stay, the states have created strong regulations, and supporting the state-regulated marketplace is essential for the safety of the American people.”
The governors noted that the recent Department of Health and Human Services (HHS) recommendation to reschedule marijuana “comes on the heels of 38 states creating their own state markets” and regulatory systems.
“In some cases, these state regimes have thrived for more than a decade,” the letter says, calling the rescheduling recommendation “a signal that FDA and the Department of Health and Human Services have faith in state regulators and the regulations that they have promulgated to keep citizens safe.”
Many of the benefits of rescheduling, the governors told the president, are economic. “Rescheduling to Schedule III will alleviate restrictions of Section 280E of the Internal Revenue Code,” they noted, “allowing cannabis-related businesses to take ordinary business deductions—just like every other American business. Economists estimate that this will save $1.8 billion per year by shifting cannabis companies to a standard federal corporate rate of 21% versus the up to 80% effective tax rate they face now.”
The office of Colorado Gov. Jared Polis (D), who led the group letter, said in a separate press release that rescheduling “will not only alleviate the financial and safety concerns for businesses but allow a thriving industry to play a full role in the American business environment.”
Demand for marijuana in the United States isn’t going away anytime soon, the governors told Biden, arguing that regulated products are far safer than those sold on illicit markets.
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