Dispensaries May Stop Doing That Weird ATM Cash Back Thing If Weed Is Federally Rescheduled

If you readily understood what this title meant, you probably smoke weed.

History Of Weed Legislation

In 1973 Richard Nixon signed in to law the Controlled Substances Act of 1970 (CSA). The law ranks drugs from schedule I to schedule V.

Cannabis, or “Marihuana” as it’s named in the statute, occupies schedule I territory because it has a “high potential for abuse”, there is “a lack of accepted safety for use of the drug or other substance under medical supervision,” and because there is “no currently accepted medical use in treatment in the United States.”

Now, you may wonder… if weed has no accepted medical use, and if it’s super illegal… how is it legal in my state?

The answer is that it’s still incredibly illegal federally. So, you may not get arrested under your state laws for recreational use of weed, but a federal agent can theoretically nab you.

This was a big issue when states first started legalizing weed. Remember all the new pot stores in LA getting raided by the feds?

In 2016, when California legalized recreational weed, feds were raiding dispensaries left and right. But as states continued to legalize it and dispensaries started popping up all around the country, the feds realized they had bigger fish to fry and decided to stop cracking down on state legalized weed.

So, the liklihood of you catching a federal charge for smoking a joint is basically zero. But as a lawyer I must advise you to refrain from crimes. So please refrain from committing crimes.

Anyway,

Weed is listed tenth in subsection (c) of schedule I of the controlled substances act among the ranks of Lysergic acid diethylamide (LSD), Peyote, Mescaline, and other hallucinogens that, to the general public, may conjure images of the nightmarish scenes dramatized in Fear and Loathing in Las Vegas.

In addition to the general regulatory framework that applies due to marijuana’s Schedule I status, some provisions of the CSA apply specifically to marijuana. For instance, 21 U.S.C. § 841 imposes mandatory minimum prison sentences for persons convicted of criminal CSA violations involving set quantities of specific controlled substances, including marijuana. In addition, 21 U.S.C. § 823 creates special registration requirements for those who manufacture marijuana for research purposes.

In sharp contrast to the stringent federal control of marijuana, in recent decades nearly all the states have changed their laws to permit the use of marijuana (or other cannabis products) for medical purposes. Twenty-four states and the District of Columbia have passed laws removing certain state criminal prohibitions on recreational marijuana use by adults.

As cannabis gained wider acceptance over the past decade, the Drug Enforcement Administration (DEA) has backed off and shifted focus on other objectives.

Beyond the mere language of the law, the federal government and its agencies have adopted administrative rules and memos that have influenced the enforcement of cannabis in a practical way, giving more sympathy to medicinal cannabis. In 2009, Deputy Attorney General David Ogden released a memo that explicitly asked prosecutors not to pursue individuals who were using medicinal cannabis in compliance with their state laws. The memo states: “As a general matter, pursuit of these priorities should not focus federal resources in your States on individuals whose actions are in clear and unambiguous compliance with existing state laws providing for the medical use of marijuana. For example, prosecution of individuals with cancer or other serious illnesses who use marijuana as part of a recommended treatment regimen consistent with applicable state law, or those caregivers in clear and unambiguous compliance with existing state law who provide such individuals with marijuana, is unlikely to be an efficient use of limited federal resources.”

Another DOJ memo released in 2013 by Deputy Attorney General James Cole, directed states attorneys to deprioritize personal use enforcement, positing that the DOJ has not “historically devoted resources to prosecuting individuals…with small amounts of cannabis in possession,” and encouraged attorneys to focus on more serious crimes involving gangs, guns, and distribution to minors. However, in 2018 an additional memo was released by attorney general Jefferson Sessions asking states attorneys to “return to the rule of law” a articulated in the controlled substances act, and rescinding the Cole memo.

Although memorandums of agencies are not binding law, agencies frequently make an effort to conform to their policy statements. The memo makes a point to identify extreme scenarios of medicinal cannabis use, citing cancer patients and patients suffering from serious illnesses as candidates for administrative immunity. The view that medicinal cannabis should be reserved for the hopelessly ill has been an undercurrent in cannabis law and parallels the same anxieties seen in Minnesota’s medicinal cannabis law that reserves cannabis use for qualified patients who suffer serious illnesses.

To confuse our nation’s stance on medicinal cannabis even more, federal law has yet to carve out situations where medicinal cannabis can be prescribed. However, in each budget cycle since FY2014, Congress has passed an appropriations rider barring the Department of Justice (DOJ) from using taxpayer funds to prevent states from “implementing their own laws that authorize the use, distribution, possession, or cultivation of medical marijuana.” Courts have interpreted the appropriations rider to prohibit federal prosecution of state-legal activities involving medical marijuana.

In contrast to this, the Supreme Court has recognized a legitimate medical need for patients to receive schedule two drugs in assisted suicide, ruling that “The Controlled Substances Act does not allow the Attorney General to prohibit doctors from prescribing regulated drugs for use in physician-assisted suicide under state law permitting the procedure.” The Supreme Court noted that medicinal treatments are “historically” left to the states, and reemphasized that unless there exists some clear or positive conflict of laws, Congress didn’t intend to replace state law.

This ruling and the treatment of cannabis in our Supreme court exposes just how deep our nation’s cannabis fears run. The Supreme court is willing to manipulate federal regulations and statutory language for the legitimate purposes of suicide (which is both unlawful and excluded from receiving federal funds under federal statute), but the federal government has yet to identify a single medicinal use for cannabis.

The department of justice’s policy concerns reflect fears of America being infiltrated by gangs, as expounded in the 2009 Ogden memo which claims cannabis to be a key source of income for cartels. Another fear encapsulated in the Controlled Substances Act is the potential for abuse associated with cannabis.

It seems counterintuitive that a patient who is prescribed cannabis through a non-cartel operated dispensary, and who is about to die (i.e. cutting off any risk potential abuse), would be allowed to receive scheduled drugs but not cannabis. The legal frameworks surrounding the issues are implemented differently which explains the opposite outcomes, but in the public eye the scatter-brained legislation and judicial rulings emphasizes a much greater identity crisis regarding our feelings on cannabis.

The Bottom Line

Right now, the DEA is considering rescheduling weed to a schedule III.

If weed is lowered to a schedule III drug, it’ll be on par with ketamine, acetaminophen with codeine, and buprenorphine.

On a practical level, not much would change. States have legalized it, and feds aren’t prosecuting it.

Rescheduling marijuana would not affect the medical marijuana appropriations rider. Thus, so long as the current rider remains in effect, participants in the state-legal medical marijuana industry who comply with state law would be shielded from federal prosecution. If the rider were to lapse or be repealed, these persons would again be subject to prosecution at the discretion of DOJ.

As far as taxes go, business owners might be allowed to deduct weed-related activities in their taxes. Banks may also start allowing cannabis related transactions on their platforms, meaning, INSA may stop having you do that weird ATM transaction thing where they give you a few dollars back…