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Policy Matters Alert


Important legislative and regulatory updates

Possible reclassification of marijuana by the DEA

May 16, 2024 · Public Policy & Regulatory Affairs Team

A recent Associated Press (AP) report has caused some controversy around the first significant drug classification change regarding marijuana in over fifty years. The AP reported that the U.S. Drug Enforcement Agency (DEA) has agreed to move forward with a process to reclassify marijuana under federal law.

Under the rumored change, the DEA would reschedule marijuana under the federal Controlled Substances Act (CSA) to a Schedule III drug from the current Schedule I classification, which is reserved for drugs with no medical value and a high potential for abuse. 

At present, more than 38 states have legalized the use of cannabis for medical reasons, while 24 states have legalized it for recreational usage. A change from a Schedule I drug to a Schedule III drug will directly impact these state programs. Once marijuana is reclassified, current federal laws restricting the use of banks by marijuana suppliers, as well as the use of debit and credit cards by purchasers, that force the industry to adopt “cash-only” business practices will no longer be in effect. The existing distribution route for medical marijuana through traditional pharmacies and whether it is assigned national drug codes (NDCs) may also impacted.

From a workers’ compensation perspective, this reclassification could result in a number of consequences.  Whether through legal proceedings and precedent, or legislative action, several states now prohibit carriers and employers from paying for medical marijuana treatment in workers’ compensation claims.  These court cases and regulations could be overturned due to reclassification. At the same time, judicial decisions in some states explicitly require reimbursement for medical marijuana under workers’ compensation. Currently, only New Mexico has a workers’ compensation fee schedule for medical marijuana. Reclassifying marijuana to a Schedule III drug could spur more states to likewise create a workers’ comp fee schedule that includes marijuana.

From a clinical perspective, marijuana has been shown to have several clinical benefits including relief of pain, nausea/vomiting, anxiety, sleep difficulties, seizures, muscle spasms, appetite loss, and inflammation. Although case reports show positive clinical benefits in these areas, continued research and studies will likely be needed to fully recognize the side effects and treatment potential. Additionally, further evaluation of dosing for clinical indications will likely be needed for accurate prescribing and clinical safety. 

Regardless of the recent reports, any formal proposal by the DEA would need to be reviewed by the White House Office of Management and Budget (OMB). Once approved by OMB, the DEA will most likely engage in a rule-making process with a defined comment period. Upon final approval of the proposed rule by an administrative judge, the DEA would then publish a final rule with an effective date. We urge clients to monitor this situation as it plays out over the next several months.


For more information on these policy developments and others we have been tracking this year, be sure to visit our Legislative and Regulatory Tracker. Bills or regulations can be filtered by insurance line, topic, status and jurisdiction.

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