Industry insiders in California say the likely move by the Biden administration to reclassify marijuana as a Schedule III drug , if approved, could become a lifeline to the state’s struggling cannabis industry, the Los Angeles Times reports. “We’ve been anticipating this,” said Meital Manzuri, an attorney whose firm specializes in the cannabis industry. “This is big for the industry.” Marijuana is legal in California, but illegal under federal law, which has forced the industry to operate in legal limbo.
While some aspects of the industry, such as stores and farms, can operate in the open, they don’t have access to out-of-state markets and banking, credit card processing, insurance and other vital business services are out of reach for many marijuana businesses. In addition, they are subjected to an onerous tax burden — taxed on every dollar they collect, not just their profits. Paul Armentano, deputy director of the National Organization for the Reform of Marijuana Laws, also known as NORML, which advocates for cannabis consumers said that if marijuana is reclassified as a Schedule III drug, “players in that industry for the first time will be able to take standard tax deductions that other businesses take….It might be a lifeline that they need to continue operating.”