Investors in the cannabis sector are closely watching the potential rescheduling of cannabis by the DEA—a decision that could reshape the industry and unlock significant tax relief. As experts at a recent webinar discussed, the path forward hinges on a key Administrative Law Judge (ALJ) hearing scheduled for December 2, 2024, which could determine how quickly these changes will come and how much the market might shift.

Why Cannabis Reform Is Not A Priority In 2024

On September 11, 2024, Zuanic & Associates hosted a comprehensive webinar focused on the ongoing process of cannabis rescheduling in the United States. Moderated by senior analyst Pablo Zuanic and Anthony Coniglio, CEO of NLCP, the panel featured industry experts Kelly Fair, a partner at Dentons, and Morgan Fox, the political director of the National Organization for the Reform of Marijuana Laws (NORML), the oldest cannabis reform organization in the U.S., founded in 1970.

Both panelists highlighted that while cannabis policy reform has gained traction among presidential candidates, it remains a secondary issue for the majority of voters.

Fox emphasized that although rescheduling is a step in the right direction, NORML’s ultimate goal is full descheduling. Fox suggested that descheduling would allow Congress to take meaningful steps toward regulating cannabis effectively, unlike the rescheduling process, which he deemed prone to political delays.

Get Benzinga’s exclusive analysis and the top news about the cannabis industry and markets daily in your inbox for free. Subscribe to our newsletter here. If you’re serious about the business, you can’t afford to miss out.

Who Gets To Speak At The Cannabis Hearing?

A significant portion of the discussion revolved around the technical aspects of the upcoming ALJ hearing. Fair clarified the procedural steps, noting that those wishing to speak must apply by September 30 with final speaker lists expected by November 2024.

Fair highlighted the importance of this hearing in shaping the final rescheduling rule, as it provides a platform for both proponents and opponents of the rescheduling proposal to present evidence. However, the panel agreed that the DEA retains substantial discretion in deciding the scope of the hearing and final rule.

Evidence and expert testimony presented during the ALJ hearing will play a pivotal role in shaping the DEA’s final decision on cannabis rescheduling. Both proponents and opponents of rescheduling will need to provide compelling arguments, as the DEA’s interpretation of this evidence could determine the outcome of the entire process.

Potential Delays And Challenges

Both Fox and Fair acknowledged that procedural hurdles and potential judicial challenges could prolong the timeline. Fox noted that any final ruling would likely face legal opposition, which could further delay implementation. Fair added that while the ALJ’s findings are essential, the DEA is not obligated to follow those recommendations, which adds another layer of uncertainty.

The webinar concluded with cautious optimism.

While rescheduling could provide some immediate relief, particularly by eliminating the 280E tax burden, the path forward remains uncertain due to potential political changes and judicial challenges. The panelists agreed that rescheduling is a step in the right direction but emphasized that descheduling remains the ultimate goal for meaningful cannabis reform.

Read Next: What Trump Learned About Marijuana That DeSantis Did Not And Why The GOP Might Become Weed-Friendly