President Biden Discusses Cannabis in State of the Union Address

On March 7th, 2024, US President Joe Biden discussed cannabis rescheduling in his State of the Union (SOTU) address (1). Specifically, he mentioned his administration’s efforts to reschedule cannabis at the federal level and the pardons issued for possession of cannabis (1). As has been previously pointed out, the pardons forgave the criminal records, but did not release anyone from prison or expunge the records (1).

In 2022, the Biden Administration initiated the process of rescheduling cannabis by requesting a review from the Department of Health and Human Services (HHS) and the Attorney General (2). In August 2023, the HHS declared their recommendation to the Drug Enforcement Administration (DEA) to reschedule cannabis from Schedule I classification under the Controlled Substances Act, to Schedule III (2). In January 2024, the HHS released a 252-page unredacted version of their review (2). The final decision on rescheduling will be made by the DEA (2). No status update was given in Biden’s speech on any new action taken by the DEA on the rescheduling of cannabis (3).

Reclassification could result in cannabis companies being able to claim standard business deductions, which they currently are not able to do due to the 280E tax measure, and also being included in the federally insured banking system (3). Both US and Canadian cannabis stocks rose after cannabis rescheduling was mentioned in the speech, according to Morningstar (3). US cannabis stocks included Curaleaf Holdings Inc., Trulieve Cannabis Corp., Green Thumb Industries Inc., Cresco Labs Inc., Verano Holdings Corp., Ayr Wellness, and TerrAscend Corp. (3). Canadian cannabis stocks included Canopy Growth Corp., Tilray Brands Inc., and Aurora Cannabis Inc. (3).

The reactions to the rescheduling of cannabis were reportedly received positively, according to Forbes, which published a collection of commentary from notable businesses after the SOTU (1). “The topics addressed in the State of the Union are a barometer for the will of the people and the voters want cannabis reform at an amazing rate of 70% per the most recent Gallup Poll,” stated Emily Paxhia, Managing Parter of Poseiden Investment Management (1). “President Biden's comments tell us that the Executive Branch is listening; we need to see this sentimented reflected through the actions of our branches of government.”

Read more on the Department of Health and Human Services agreeing with the FDA’s recommendation to reschedule cannabis as a Schedule III drug.

References

1. Oleck, J. In SOTU First, Biden touted reclassifying cannabis’ federal status. the industry is pleased https://www.forbes.com/sites/joanoleck/2024/03/08/in-an-sotu-first-biden-touted-reclassifying-cannabiss-federal-status-the-industry-is-pleased/?sh=e4d5a8a3b399 (accessed Mar 8, 2024).
2. Colli, M. HHS supports FDA’s call: Recommends rescheduling cannabis for medical purposes https://www.cannabissciencetech.com/view/hhs-supports-fda-s-call-recommends-rescheduling-cannabis-for-medical-purposes (accessed Mar 8, 2024).
3. Gelsi, S. Cannabis stocks rise after president Biden mentions plant in state of the union speech https://www.morningstar.com/news/marketwatch/20240308370/cannabis-stocks-rise-after-president-biden-mentions-plant-in-state-of-the-union-speech (accessed Mar 8, 2024).