What marijuana rescheduling would mean for Illinois, from tax changes to health studies

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Sunday, May 5, 2024
What would marijuana reclassification mean for Illinois?
Cannabis is a billion dollar industry in Illinois, and the federal government's proposed reclassification of marijuana from Schedule I to Schedule III is a cause for celebration fo

CHICAGO (WLS) -- As the federal government considers reclassifying marijuana to a lower level controlled substance, the billion dollar industry and cannabis community in Illinois say it's a cause for celebration.

The proposed change is to move cannabis from a Schedule I drug, on par with heroin and fentanyl, to a Schedule III controlled substance.

"I think it's fantastic," said Dominique White, people and operations director for Ivy Hall. "A great day in cannabis and a huge win for us. Especially to help destigmatize the plant."

Ivy Hall was the first social equity licensed dispensary in the state of Illinois, and White said the potential for cannabis to become a Schedule III controlled substance on par with Tylenol with codeine is much needed reform.

"It's a step closer to getting federally legalized," she said.

READ MORE: DEA will move to reclassify marijuana as a Schedule 3 drug

But dispensary operators say that the biggest win if this goes through would be the tax implications that would allow them and other canna-businesses to finally deduct business expenses.

"It will likely be the difference between being profitable and not," said Matthew Brewer, co-founder of Grasshopper Lounge in Logan Square.

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Brewer said that could level the playing field and allow for more business growth and investment.

"Every business has its ramp to becoming profitable," he said. "It's a way steeper ramp when you're unable to deduct business expenses."

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"A lot of the promise of the industry was based on there being federal reform, "said Charlie Bachtell, CEO and co-founder of Cresco Labs. "And to a certain extent it's taking longer than some of the early investors would have wanted to see it take."

Bachtell said if cannabis is changed to a Schedule III drug, it could mean millions more for operators, and more competition.

"We paid an additional $70 to $80 million in taxes than a normal business in a normal industry would have paid," he said. "You can't outgrow that."

Another aspect of a Schedule III drug is the potential for large scale in depth pharmaceutical study.

"I think there is a huge untapped therapeutic benefit of THC and CBD that we have just not explored because it's been too prohibitive," said Brianna Hudak, UIC College of Pharmacy clinical pharmacist.

That's not to say cannabis is completely benign; Hudak said about 10% of people can develop a use disorder. And of course there are legal and legislative hurdles to traverse before any rule change would be put into place.