The U.S. marijuana industry, valued at $32.1 billion, entered Labor Day weekend for the second consecutive year with significant developments regarding the Biden administration’s attempts to change marijuana’s classification. Despite this milestone, the reaction has been one of disappointment rather than celebration, following the recent announcement that a crucial hearing about cannabis rescheduling won’t take place until December. This delay led to frustration and a slight dip in cannabis stock values.
Last year, the industry had a more optimistic outlook during this period as federal health regulators had recommended recognizing cannabis as medicine, a major step forward in marijuana reform. However, this year brings a less favorable situation as Anne Milgram, chief of the U.S. Drug Enforcement Administration (DEA), issued a notice in the Federal Register announcing a Dec. 2, 2024, hearing, signaling that the rescheduling of marijuana is unlikely to occur before 2025. Consequently, cannabis businesses will need to wait a while longer for potential tax relief at the federal level.
Representative Earl Blumenauer, cochair of the Congressional Marijuana Caucus, expressed his dissatisfaction, accusing the DEA of holding up progress on a matter that the White House considers important. On the other hand, some observers, such as Shawn Hauser of the legal firm Vicente, say they expected these kinds of delays and pointed out that a hearing was always a real possibility.
Blumenauer’s disappointment mirrors the sentiments of many in the marijuana industry, including prominent entities such as Green Thumb CEO Ben Kovler, who voiced his frustration on social media. The market responded accordingly, with Green Thumb’s stock dropping by more than 8.5%, while other major cannabis companies, including Curaleaf Holdings, Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF) and Verano Holdings, experienced similar declines.
The cannabis community’s disappointment spilled onto social media, with industry leaders and advocates expressing their discontent with President Biden, Milgram and even among themselves. Speculation also arose that a potential Republican presidential win, particularly by Donald Trump, could undo the rescheduling process. However, these are only rumors with no factual backing.
Industry insiders, including lobbyists, lawyers and some marijuana executives argue that the December hearing should not be surprising, emphasizing that the rescheduling process initiated by Biden’s executive order in October 2022 remains on track.
The final rule publication will follow the administrative law judge’s hearing, although no specific timeline is mandated by the Administrative Procedure Act. Barring any extended legal challenges, a final decision could still be made before Biden’s term ends on Jan. 25, 2025.
The specifics of who will participate in the December hearing remain unclear. As the industry prepares its case, experts anticipate a showdown with familiar opponents such as Smart Approaches to Cannabis.
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