State-licensed medical marijuana businesses can now apply for federal protections in line with the Trump administration’s cannabis rescheduling process.
The Drug Enforcement Administration’s “Medical Marijuana Dispensary Registration Portal” went live on Wednesday morning.
The move follows last week’s announcement by the Department of Justice that marijuana is being moved from Schedule I to Schedule III of the Controlled Substances Act (CSA), in phases.
Under an order signed by Acting Attorney General Blanche, marijuana products regulated by a state medical cannabis license immediately moved to Schedule III, as did any marijuana products that are approved by the Food and Drug Administration (FDA).
Medical cannabis dispensaries with state licenses that want to take advantage of new legal protections and tax benefits that come with Schedule III status will first have to fill out an application with DEA that asks for information about their processes for storage, ordering, dispensing, inventory, maintenance of records and other aspects of their businesses.
“For each activity below, indicate whether the firm has a standard operating procedure (SOP):
- Ordering
- Receiving
- Inventories
- Storage of Marijuana
- Security
- Dispensing (including delivery services)
- Distributing
- Destruction/Disposal
- Theft/Loss Reporting
- Due Diligence (including supplier/patient/practitioner verification)
- Corresponding Responsibility
- Maintenance of Records”
The application asks about specific details about security measures such as vaults, safes, secure storage rooms, access controls, alarm systems and on-site security personnel.
Applicants can choose whether they are requesting to handle marijuana, marijuana extracts or naturally derived delta-9 THC.
While only medical marijuana is currently being moved to Schedule III, the application also asks potential registrants whether their firms handle or dispense recreational marijuana.
Under last week’s DOJ order there will be an expedited administrative hearing process to consider the broader rescheduling of cannabis from Schedule I to Schedule III, beginning on June 29.
The DEA application, meanwhile, also asks businesses to submit information about their state cannabis licenses and to answer questions about criminal and disciplinary histories.
It also asks: “Has anyone who will be involved in the ownership or operation of the firm previously manufactured, distributed, and/or dispensed any controlled substance without a DEA registration authorizing such activity?”
Presumably, every currently operational state-legal cannabis business has key personnel who have done so, since medical marijuana was, until just days ago, a Schedule I controlled substance that DEA did not broadly authorize manufacturing, distribution and dispensation of.
Applicants must additionally list suppliers from which they intend to procure marijuana, and to disclose whether they anticipate repackaging or relabeling cannabis products.
They also need to provide lists of individuals with the business that are anticipated to have “access to controlled substances,” including their dates of birth, social security numbers, criminal histories related to drugs.
“Provide the following for each individual you anticipate having access to controlled substances:
- Name
- Title(s)
- Date of birth
- Social Security number
- DEA registration numbers, if applicable
- State/territorial authorizations to manufacture, distribute, dispense or otherwise handle controlled substances
- Has this person been the subject of one or more federal, state, territorial, or tribal disciplinary actions?
- Has this person been convicted of any federal, state, territorial, tribal, and local offenses related to controlled substances?”
There is also an annual $794 application fee, currently only payable via PayPal, though DEA says “we anticipate having additional forms of payment in the coming weeks.”
Application fees are not refundable.
Separately, DEA has launched a new webpage on its site that houses key information about the new federal cannabis rescheduling move, including copies of Federal Register orders that detail the change and the process for the upcoming hearing on the issue.
Blanche’s rescheduling order last week said that to align with an international drug control treaty “requirement that a government agency serve as the exclusive purchaser of cannabis production,” DOJ is rolling out a process by which the federal government will technically purchase marijuana from producers and then sell it back to them or related entities.
“Registered manufacturers must store crops in a facility to which DEA maintains access until that transaction is complete, and each manufacturer registration must specify the areas in which cultivation is permitted,” it said.
“All manufacturers registered under this subsection shall establish a nominal price for the purchase of their marijuana crops. The Administration shall then purchase the entity’s crops at that price and sell the crops back to the entity, or a related or subsidiary entity, at the same price with the addition of the administrative fee as calculated under Part 1318.06(a).”
Meanwhile, the U.S. Department of the Treasury and Internal Revenue Service (IRS) said they plan to issue new tax guidance for the marijuana industry following the rescheduling announcement.
Rescheduling will benefit state-licensed marijuana businesses by allowing them to take federal tax deductions they’re currently barred from under an IRS code known as 280E that doesn’t apply to Schedule III substances.
White House Press Secretary Karoline Leavitt said that the administration is moving forward with marijuana rescheduling because cannabis reform is “overwhelmingly popular” with voters and because doing so will help people who need access to the drug for medical purposes.
During a press event in the Oval Office last week, President Donald Trump spoke about the medical benefits of marijuana.
“A lot of people are suffering from big problems, which this seems to be the best answer,” he said. “They’re very happy about it. So the rescheduling is starting, and that’s a big thing, rescheduling.”
The president noted that his administration’s actions on cannabis rescheduling came after his friend Howard Kessler told him about how he used medical marijuana.
“He had some medical difficulties, and he came upon this by accident, in a way,” he said. “He had to go through a lot of different medications, and he said this was the one that was much better than anything else. And so he experienced that. He didn’t benefit by it, other than from the standpoint that he lives a much better life now.”
“So hopefully you don’t need it,” Trump said. “But if you do need it, I hear it’s the best of all the alternatives.”
Separately, the president called on Congress to take action to amend a law that threatens to federally recriminalize hemp-derived full-spectrum CBD products later this year.
“We must get this done RIGHT and FAST, especially for those who saw that CBD helps them,” he said in a social media post. “Plus, I am told it will also help our GREAT FARMERS, who we love, and will always be there for.”
Days earlier, Trump had complained that federal officials were “slow-walking” following through on his cannabis order.
