Citing sources, the Washington Post reported on the 11th that President Trump is preparing an executive order to reclassify marijuana from a Schedule 1 to a Schedule 3 substance under the current drug classification system.
Under the current drug classification system, Schedule 1 substances are drugs with no recognized medical benefit and a high risk of abuse, such as heroin and LSD. Schedule 3 substances are drugs with recognized medical benefit, even if they carry a certain risk of abuse, such as codeine-containing painkillers.
If marijuana is reclassified from Schedule 1 to a Schedule 3 substance, it will become a controlled substance with medical benefits at the federal level for the first time.
Experts say that even if President Trump signs this executive order, marijuana use will not be legalized at the federal level. However, a groundbreaking change is expected for the industry.
While deducting expenses such as R&D costs is virtually impossible for companies handling Schedule 1 narcotics, deducting R&D costs for Schedule 3 substances will allow deductions for not only R&D costs but also marketing and labor costs.
Consequently, legal marijuana companies are expected to see a significant increase in profitability.
Furthermore, the approval process for various marijuana-related clinical trials will be significantly simplified, which is expected to have a positive impact on the marijuana industry.
Currently, more than three-quarters of all 50 states, including New York and New Jersey, have legalized marijuana for medical or recreational use.