Shelton Hull
Words by Shelton Hull
Tuesday, April 30 was perhaps the most important day yet in the ongoing push toward legalizing cannabis nationwide in the United States, as it was the day our country’s Drug Enforcement Administration, the infamous DEA, followed through on a previous recommendation by the Office of National Drug Control Policy (ONDCP) to reclassify cannabis from a Schedule I to Schedule III narcotic. It just so happened that I was sitting down to write the column you’re reading right now when the news broke that morning, timed so fortuitously for me to pivot, or rather circle back to a subject we were discussing here just three months ago.
A briefing by the firm Vicente LLP, which specializes in cannabis law and business around the country (including Florida), notes a particularly salubrious wrinkle to the ruling: “If cannabis moves to Schedule III, state-regulated marijuana businesses will no longer be subject to Section 280E of the Internal Revenue Code, which has long prohibited such businesses from writing off standard business expenses when calculating their pre-tax profits. This will save individual marijuana businesses hundreds of thousands, if not millions, in excessive taxes. Businesses across the entire industry will be able to reinvest and boost retail employee pay without being taxed on the expenditures they make to expand their business.”
With Florida already poised for exponential growth with the likely passage of Amendment 3, this offers even more of a boost, most crucially to the many new and emerging entrepreneurs who are already planning for next year, and we’ll be talking more about them in the months ahead. Trulieve stock jumped about 30%, almost instantly, likely covering the entire cost of the petition drive in just a couple hours of market activity. Other cannabis-related stocks saw similar gains of 15-30% that first day, and those gains effectively held through press time. Right now is the ideal time to start building your own little portfolio of canna-stocks, canna-crypto etc., especially those with connections to Florida, and I’d love to hear any suggestions you, the reader, may have.
As previously noted (in March, to be specific), the drug scheduling concept is ridiculous, and it reflects the fuzzy thinking that has animated anti-drug efforts for over a century. It has proven to be so functionally counterproductive that even the DEA thinks so, and it was their idea! This is largely in response to the voluminous evidence accumulated over this past decade in states that have already loosened their laws. With federal laws still lagging far behind a good 80% of states, this revision to their rhetoric does mark a significant concession.
Of course, it’s not like they’re saying, “Oh, yeah, we were wrong the whole time, and we knew it.” The line for class-action lawsuits to recoup the billions in lost income and productivity from 50 years of punitive, excess sentencing, trumped-up charges, false arrests, no-knock warrants, intimidation, coercion, bogus plea deals, etc., would cover a near-infinite plain, like that old Coca-Cola commercial that Don Draper invented. And let’s not even mention the hundreds of officials on all levels who were caught working for all manner of folk, many and sundry, hither and thither and yon. (Really, don’t mention it, because it’s dangerous!)
At this writing, it remains to be seen whether President Joe Biden will sign off on these changes, and whether these changes will have demonstrable effect on the way current laws are enforced on the national level. With multiple states, including our own, weighing the question of legalization on our ballots this November (and in certain state legislatures, as we speak), this recent news follows in line with current trends. But Biden is an old-school drug warrior who voted mostly in assent with all of the worst pieces of anti-drug legislation that came up throughout his career in the Senate, including the most brutal abuses of Nixon-Agnew and Reagan-Bush.
Biden, still sprightly in his 82nd year, is defending the White House in the final political campaign of a legendary career. A win in November puts him into an elite class of presidents. We’ve had 46, so far, and only 17 were ever elected to a second term in their own right. We won’t see #47 until January 2029, but the results here in 2024 will be the main factor that helps determine who follows the eventual winner. And if Joe Biden wants to be that winner, it would behoove him to go ahead and follow the DEA’s lead — which may be the first time I’ve ever said that before — and probably also the last.
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