420 with CNW — Marijuana Stakeholders Discuss Legalization Prospects During National Academies Conference

The National Academies of Sciences, Engineering and Medicine (NASEM) recently hosted a two-day session with marijuana stakeholders, regulators, advocates, and legalization opponents to share thoughts on the country’s cannabis legalization landscape. It was NASEM’s second iteration of the Public Health Consequences of Changes in the Cannabis Policy Landscape’ series, following the first conference in September.

The first conference featured representatives from federal agencies such as the Food and Drug Administration (FDA), Centers for Disease Control and Prevention (CDC), the National Center for Complementary and Integrative Health (NCCIH), and the National Cancer Institute (NCI). The event created an opportunity for officials from these organizations to share their respective agencies’ perspectives on critical marijuana-related research.

Last week’s conference attracted many participants who had been deeply involved with cannabis regulation at various government levels, including marijuana regulators from California, Maryland, Hawaii, Oklahoma and Missouri. The regulators discussed their experiences with cannabis regulation and the successes and failures they experienced while trying to regulate the swiftly evolving state-legal cannabis industry.

Nicole Elliot, director of California’s Department of Cannabis Control (DCC), noted that California’s cannabis market had become quite robust with “a lot of complexities” since it legalized recreational cannabis six years ago. She said the California market has begun to experience a little stability and consolidation but added that competition in the market is becoming increasingly fierce.

Furthermore, Elliot said the illicit cannabis market has been a persistent thorn in the side of the state legal market and posited that this may be due to the fact that California has a history of producing more cannabis than most states in the country. She also noted that patchwork local rules have created plenty of regulatory loopholes that allow black-market sellers to continue their operations.

Amy Moore, Missouri’s Department of Health and Senior Services (DHSS) director of cannabis regulation, said that while her state is still new to the cannabis industry, its cannabis segment is “pretty active” and recently hit the $1 billion sales milestone. According to Moore, the state’s medical and recreational cannabis rules both have a major focus on public health.

Conversely, Hawaii Office of Medical Cannabis Control and Regulation supervisor Michele Nakata concedes that her state was slow to adopt a medical-cannabis dispensary system, thanks to much more restrictive cannabis policies compared to other states in the country. While this undoubtedly limited the industry’s growth, it made cannabis regulators’ jobs “a lot easier,” even when resources were limited. She said Hawaii cannabis regulators are now preparing for the possibility of recreational-cannabis legalization.

These interactions between the different groups of regulators, opponents and proponents as well as other cannabis industry stakeholders could be helpful in shaping the future plans of many companies such as Innovative Industrial Properties Inc. (NYSE: IIPR), since the insights shared project what could be possible in the coming years.

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CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of two informative articles each business day. Our concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. Articles are released each business day at 4:20 a.m. and 4:20 p.m. Eastern – our tribute to the time synonymous with cannabis culture. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.

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420 with CNW — Study Finds Cannabis Gives Anxiety Sufferers Better Sleep Compared to Alcohol

A recent study supported by federal funding has uncovered insights into the sleep patterns of individuals dealing with anxiety, revealing that the use of marijuana appears to be linked to improved sleep quality. The research, published in the “Drug and Alcohol Review” journal and conducted collaboratively by teams from the University of Haifa, Colorado State University and the University of Colorado, sought to explore the subjective sleep experiences of 347 individuals utilizing cannabis to manage anxiety.

Over a span of 30 days, participants were engaged in daily surveys where they documented their substance use and recounted their previous night’s sleep experience. The study compared outcomes on days with no substance use, marijuana-only use, alcohol-only use and co-use of both substances.

The findings indicated a notable difference in reported sleep quality, with participants reporting better sleep on marijuana-only days and co-use days in contrast to nonuse days. Intriguingly, alcohol-only use did not exhibit a similar positive association with sleep quality. The study also revealed a correlation between the frequency of alcohol and cannabis use and sleep patterns. Individuals with higher usage frequencies reported enhanced sleep quality on days when marijuana was the sole substance used compared to those who used alcohol and cannabis less frequently.

This correlation challenges the idea that tolerance may diminish the sleep-inducing effects of cannabis, as the study suggests an opposite trend of improved sleep quality with more frequent marijuana use. In addition, contrary to the common belief that alcohol aids in sleep, the research corroborated previous findings that alcohol does not contribute significantly to overall sleep quality, especially when juxtaposed with cannabis.

The study posited that understanding various cannabis combinations and ratios remains limited, emphasizing the need for further research, especially in clinical trials. The inclusion of diverse cannabis types, varying in dosage and product selection, prompted the researchers to acknowledge existing gaps in knowledge, advocating for future trials to address these uncertainties.

The study concluded by emphasizing the urgency of experimental investigations into the effects of cannabis and alcohol on sleep. It underscored the potential positive impact of cannabis on subjective sleep quality for individuals dealing with anxiety. Additionally, it highlighted the need for further exploration into the interplay between the frequency of substance use and its immediate influence on sleep, especially in populations seeking cannabis as a coping mechanism for anxiety, where alcohol and cannabis misuse may be prevalent.

As the health benefits of cannabis gain more attention from the scientific community, demand could grow much faster, which could in turn boost the demand for ancillary services such as those offered by Innovative Industrial Properties Inc. (NYSE: IIPR).

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420 with CNW — Congressional Researchers Say High Federal Taxes on Marijuana May Hamper Industry’s Economic Potential

The Congressional Research Service recently published a report that cautions legislators to consider the possible consequences of levying high taxes on cannabis products in the event that marijuana gets legalized federally. This comes as Congress considers several reform initiatives and the DEA concludes its review of marijuana scheduling and makes a decision on whether or not to reclassify cannabis as a Schedule 3 drug under the Controlled Substances Act, as recommended by the U.S. Health and Human Services Department.

In a previous report, the nonpartisan research body argued that the DEA was likely to reschedule cannabis based on previous precedents. In its most recent report, the body states that the potential economic impacts of recreational cannabis could be major considerations in any actions taken by Congress on the drug, warning that reliable federal scientific data on this particular topic is scanty given the substance’s ongoing prohibition.

The report advised that Congress gather additional data through agencies such as the Bureau of Economic Analysis as well as Bureau of Labor Statistics. The report also discussed the possible descheduling or rescheduling of cannabis, arguing that imposing federal taxes on the drug much like the taxes levied on tobacco could affect the drug’s economic development capacity.

The Congressional Research Service explained that a balanced approach was needed when it came to marijuana taxes, noting that legislators would need to consider the benefits of increased revenue vs. the drawbacks of a possible consumer resistance against high taxes that may permit the black market to proliferate. It then cited some studies whose findings posit that high tax rates levied on cannabis — and the consequent high prices for recreational cannabis products could heighten the odds of potential consumers turning to the untaxed illicit market.

The body also presented a counterargument, claiming that high cannabis taxes could even deter some individuals from trying the substance altogether, particularly those who were new to adult-use cannabis and weren’t likely to buy from the illicit market. In addition to this, it pointed out modest bits of legislation that could relieve some of the peculiar financial challenges cannabis businesses in legal states faced due to prohibition. This includes the Secure & Fair Enforcement Regulation (SAFER) Banking Act, which was cleared in September by the Senate’s Banking Committee.

This measure would create a safe haven from federal law for transactions with state-sanctioned recreational cannabis businesses and any entity handling the proceeds from such transactions, as well as restrict the ability of federal regulators to terminate a deposit account for a recreational cannabis business. Currently, however, the bill is yet to advance to the House.

With the right federal regulatory framework in place, enterprises such as Innovative Industrial Properties Inc. (NYSE: IIPR) that serve marijuana businesses could grow and thrive.

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420 with CNW — Nevada Approves Six Additional Cannabis Consumption Lounges

Nevada authorities are still granting more licenses for consumption lounges, with the state’s marijuana compliance board (CCB) recently giving the green light to six additional conditional licenses for various marijuana businesses, including TGIG LLC; NevadaPure LLC; Higher* Archy LLC; Desert Evolution LLC; Green Thumb Industries (GTI); and Curaleaf Holdings.

Curaleaf Holdings, a global cannabis giant, obtained one license for Tryke Companies, its subsidiary that runs Reef Dispensaries. GTI, another significant player in the multistate marijuana sector, also secured a license for Integral Associates, its subsidiary, with intentions to open a club on the Strip.

The CCB stated in June last year that it intended to establish new rules for regulating consumption lounges, aiming to promote greater inclusivity within Nevada’s marijuana sector. Back then, the agency stated that it planned to grant up to 65 permits, most of which would be linked to already-operating dispensaries and the remaining portion to independent lounges.

The board announced 20 potential candidates for the licenses granted in October 2022. In June 2023, the CCB first issued three conditional licenses to the Venue@Sol Cannabis, Planet 13 Holdings and Cheyenne Medical Sammy Davis dba, which operates as Thrive Cannabis Marketplace. LA Lounge received a license as the first lounge independent from a dispensary in July, and in August, three additional licenses were issued to KV Group, Global Harmony and Deep Roots Harvest.

There are currently 15 conditional licenses that have been approved. After being authorized, licensees have a year to fulfill all regulatory criteria and make the necessary modifications to start operating. Mitch Britten, CEO of Thrive Cannabis Marketplace, expressed excitement in September about commencing work on their new opening on the Strip, terming it a significant milestone for their business.

Planet 13 Holdings also unveiled its plans for a consumption lounge named DAZED! at the beginning of this month. The lounge, adorned with unique features such as VIP booths for marijuana-infused cocktails and “bong chandeliers,” will offer 3,000 square feet of space for food sales, entertainment and consumption. Larry Scheffler, the company’s co-CEO, expressed enthusiasm, envisioning their lounge as a destination that outshines typical Vegas experiences. They aim to open the venue by mid-April next year, capturing the attention of marijuana novices, enthusiasts, tourists and locals alike.

Many licensees of consumption lounges had originally planned to open for business by summer, but they encountered several setbacks. It is anticipated that the lounges will draw a large number of tourists, supporting the Nevada cannabis business, given that Las Vegas alone had more than 38 million visitors in 2022. Additionally, the state’s cannabis sector is expanding thanks to the entry of well-known individuals such as artist Future into the market with his cannabis line, Evol by Future.

Conversely, the establishment of lounges is not advancing as quickly in other states. In California, Governor Gavin Newsom vetoed AB 374, a bill that would have legalized marijuana cafes similar to those in Amsterdam.

The aim of the bill, which Assemblymember Matt Haney introduced early this year, was to allow lounges to sell prepackaged, noninfused food and beverages. Newsom cited concerns about the existing California laws that mandate a smoke-free workplace for workers, stressing the importance of worker health and safety. Haney expressed his intentions to collaborate with the governor’s office and labor leaders to address these concerns and reintroduce the bill in the future.

As more states begin licensing consumption lounges for cannabis, the market for ancillary product and service providers such as Industrial Innovative Properties Inc. (NYSE: IIPR) could widen in those jurisdictions.

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420 with CNW — Cannabis Legalization Causes Major Drug Test Manufacturer to Replace Tests with Fentanyl

Psychemedics, a leading drug-testing technology manufacturer, has unveiled an innovative screening panel that diverges from detecting cannabis, instead focusing on fentanyl and other controlled drugs, as a response to the shifting landscape due to the legalization of cannabis in numerous states.

Psychemedics’ updated Advanced 5-Panel Drug Screen marks a transformative step in how companies safeguard their places of work by shifting focus from cannabis to the major threat posed by fentanyl. The revamped screening panel has garnered approval from the Food & Drug Administration (FDA) and is celebrated for its enhanced accuracy in identifying amphetamines, PCP, opioids and cocaine.

Psychemedics, established in 1987 after which it pioneered hair testing, expressed the necessity for this change in a recent press release and highlighted the failure of the original five-panel drug tests to adapt to the contemporary drug market, specifically in detecting the escalating presence of fentanyl.

Psychedemics CEO and president Brian Hullinger stressed the substantial transformation in workplace challenges brought about by the changing dynamics involving cannabis and fentanyl. He explained how the company responded to this shift by developing its Advanced 5-Panel, aiming to close the existing gap.

With a growing number of states legalizing marijuana, protections have been established for employees who use cannabis during their off-duty hours. In California, for instance, employers are now prohibited from inquiring about an applicant’s prior cannabis use.

Similarly, Michigan recently ceased pre-employment cannabis drug testing for job applicants for government jobs and offered those penalized for past THC tests the chance to have their sanctions retroactively removed. Nevada and Washington also protect job applicants from discrimination based on positive marijuana tests. New York extended job protections for those adults legally using marijuana during their off-hours while away from their workplaces.

At the federal level, there have been attempts to end marijuana drug testing for those applying for federal jobs. The House Rules Committee has repeatedly blocked these efforts, but the Senate approved defense legislation back in July preventing intelligence agencies from withholding security clearances based solely on past cannabis consumption. The House Oversight & Accountability Committee has also approved a bipartisan bill to prevent federal employment or security clearance denials due to past marijuana consumption.

Concurrently, concerns regarding the fentanyl drug supply have grown. While there have been debates over claims of fentanyl-laced cannabis, experts acknowledge the presence of this potent opioid in drugs such as cocaine and heroin.

The spreading wave of legalization isn’t only leading to shifts in the work of makers of testing kits for drugs. It is also creating many opportunities for companies such as Innovative Industrial Properties Inc. (NYSE: IIPR) that don’t deal in the substance but serve cannabis companies in an ancillary role.

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420 with CNW — Demand for Marijuana Seeds Booms as Legalization Spreads

Demand for cannabis seeds in America is surging. A wave of cannabis reform has left medical marijuana legal in 38 states, and recreational cannabis is now legal in 23 states. Now that thousands of commercial cultivators across the country can legally grow and produce cannabis, demand for seeds in the United States is skyrocketing.

State-level recreational cannabis policies that allow home cultivation have also contributed to the increase in marijuana seed demand. Since cannabis seeds barely contain any THC and have no potential for abuse, the law essentially treats them like any other seed.

In Minnesota, residents were lining up at cannabis stores to buy seeds the same day the state legalized recreational cannabis. Jordan, Minnesota-based shop Strains of the Earth saw a “huge influx” of Minnesotans looking for and buying seeds on Aug. 1, 2023, the day Minnesota legalized adult-use cannabis.

Owner Jim Cramond says he had uncountable social media requests asking if marijuana seeds were available, and the company served a steady stream of customers throughout the day. Cramond predicted that he would need to restock every three months, but demand for cannabis seeds has been so high he has to order new stock every week to keep up.

Hammond began teaching courses on how to grow seeds into healthy, bud-producing cannabis plants in September and soon had hundreds of customers attending his tutorials without any social media promotion.

Millions of Americans now live in a state with legal recreational cannabis, and interest in home cultivation is on the rise. For Americans who pride themselves on self-reliance and want to consume contaminant-free cannabis, home cultivation allows them to grow their own cannabis from seed to bud without any outside aid. Home cultivation is also a much more affordable alternative to buying cannabis flower as legal recreational cannabis tends to be quite expensive.

Additionally, it is the only way states such as Minnesota where legal sales haven’t officially launched can legally possess cannabis. Minnesotans who don’t want to wait until 2025 when regulators are done setting up a retail market can only access recreational legal cannabis through seeds and home cultivation.

Virginia residents are also stuck in a gray area where the state has legalized the possession and use of recreational cannabis but still hasn’t set up a commercial market. Smoke shops and horticulture companies in Virginia are now selling seeds and donating them in some cases to satiate residents’ demand for adult-use cannabis.

This surging demand for marijuana seeds and products bodes well for ancillary entities such as Innovative Industrial Properties Inc. (NYSE: IIPR) since they are also likely to see growing demand for their products as the cannabis industry grows its reach across the country.

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420 with CNW — Ohio Voters to Decide on Recreational Cannabis Legalization

Ohioans are currently voting to decide the fate of a proposed initiative aimed at legalizing recreational marijuana. Early voting commenced on Oct. 11, 2023, with the statewide election scheduled for Nov. 7.

The initiative, which bears the designation Issue 2 on the ballots, has been championed by the Coalition to Regulate Marijuana Like Alcohol. The campaigners spent more than a year pushing for the initiative to be included on the ballot since the Republican-controlled legislature would not expand on the present medicinal marijuana policy.

Should the initiative gain approval, Ohio would become the 24th state to legalize recreational cannabis. This would supersede the existing medical cannabis program, which has steadily expanded since its inception in 2016.

The proposal encompasses provisions permitting adults 21 years of age and older to purchase and possess up to 2.5 ounces of marijuana and 15g of concentrate. Additionally, they would be allowed to cultivate a maximum of six plants, with a cap of 12 for households with multiple adult occupants.

The commercial production and distribution of marijuana products would be subject to regulation by a newly established state agency: the Division of Marijuana Control. The commission will be responsible for licensing, enforcing regulations, conducting investigations, and levying penalties on testing laboratories, operators, and other players in the recreational cannabis sector.

Recreational cannabis sales would be subject to a 10% tax, with the generated revenue allocated toward a cannabis social-equity and employment fund, the oversight of the program, support for communities hosting marijuana facilities and addiction services.

A poll conducted in July by the USA Today Network revealed that a majority of Ohio voters, approximately 58.6%, are in favor of legalization. This sentiment is more pronounced among younger respondents, with 76% of those aged 18 to 34 showing support, in contrast to 43% of individuals aged 65 and above. Additionally, another survey by Fallon Research discovered that 59% of voters were in favor of the ballot initiative, while 32% stated they would vote against it.

The law would take effect 30 days after the voting results are officially certified. However, the longevity of legalization is not assured since this is a citizen-initiated statute and not a constitutional amendment. State legislators can still repeal or amend the program following the election.

Currently, several groups, including law-enforcement agencies and the Ohio Children’s Hospital Associations, are against the initiative. Republican legislators are also against it and may become more assertive in contravening the public’s will, particularly with a favorable presidential election year in 2024.

If the measure to legalize recreational cannabis succeeds and is implemented, Ohio could see the mushrooming of not just marijuana companies but also other verticals connected to the industry in the same way that entities such as Innovative Industrial Properties Inc. (NYSE: IIPR) have carved out a niche serving marijuana companies in other state markets.

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420 with CNW — Cannabis Dispensaries Happy That SAFER Banking Act Has Progressed to Senate Floor

Cannabis businesses across the United States have applauded a recent vote by a committee of the U.S. Senate to advance cannabis banking legislation and move it to the senate floor. The committee approved a revised version of a bipartisan marijuana banking bill for the first time last week, raising hopes that America’s state-legal cannabis industry could finally gain access to financial and banking services.

Members of the Senate Banking Committee voted in favor of the Secure and Fair Enforcement Regulation (SAFER) Banking Act in a 14 to 9 vote just a week after bill sponsors Senators Steve Daines and Jeff Merkley officially filed the revised bill. If the measure becomes law, it will provide protections to banks and financial institutions that serve businesses in the cannabis sector from federal reprisal.

America’s state-legal cannabis industry currently cannot access banking services such as bank accounts and cashless payments due to federal prohibition, forcing them to mostly operate on a cash basis. On top of making tax compliance quite difficult, running cash-only operations attracts thieves and increases the likelihood of violent cannabis dispensary robberies, something that is already happening with frightening regularity around the country.

Senate Banking Committee Chair Sherrod Brown has said that the bipartisan cannabis banking bill was necessary as it would help keep cannabis businesses, service providers, and communities safe.

Although the proposal will have to advance past the Senate and House of Representatives before heading to President Joseph Biden’s desk for his signature, cannabis dispensaries are pleased with the progress it has made so far. Herban Underground’s Clif Gordon said he wants to run his cannabis business like any other business in the country but limited access to banking makes this difficult. His establishment is functions like any other business, but federal prohibition prevents his from taking credit cards or any other cashless payment systems, limiting his business to cash-only transactions.

Former Colorado Representative Ed Perlmutter has been championing cannabis banking for close to a decade to help business owners like Gordon. He explains that the SAFER Banking Act would finally allow banks to serve the state-legal cannabis sector as it serves other legitimate industries. That would include granting the industry access to deposit accounts, credit cards, payroll accounts, and other banking and financial services that are immediately accessible to other businesses.

Mason Tvert from Colorado Leads says operating on a cash-only basis and essentially keeping a pile of cash on hand presents a safety issue for cannabis businesses and their employees. He says the SAFER BANKING Act is a “critical public safety legislation” that will allow access to critical banking services while providing social equity and small businesses with the financial products they need to grow.

If this act gains Congressional approval and is signed into law, it could result in more marijuana companies accessing financial services, thereby having positive downstream effects such as causing a spike in the number of clients ancillary firms such as Innovative Industrial Properties Inc. (NYSE: IIPR) serve.

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420 with CNW — Payment Processing Firm Enters Canada’s Cannabis Market

Payment processing platform Square has announced its entry into the Canadian marijuana market through a collaboration with Jane Technologies, an online service that enables customers to order cannabis for store pickup or delivery. In line with the partnership, Square is poised to launch an early-access program tailored for licensed cannabis dispensaries in Ontario. The program will allow dispensaries to begin testing Square for retail point of sale (POS) solution within their brick-and-mortar stores, paving the way for a broader launch later on.

In addition to payment processing, Square’s new cannabis client services also feature real-time inventory tracking across various retail locations and compliance notifications in the event that an order exceeds Canada’s legal marijuana product purchase thresholds.

Square has been collaborating with CBD companies since 2019, despite persistent barriers to banking marijuana businesses. Square began an invite-only trial program in May of that year to provide services to CBD vendors, and the business expanded the program in October of the same year.

The entry of an established, well-known payment platform and point-of-sale provider might put pressure on rivals currently operating in the cannabis industry. Many of these competitors are comparatively smaller in scale compared to their more traditional financial counterparts, focusing primarily on serving cannabis and other heavily regulated enterprises.

In the United States, the conundrum surrounding federal marijuana illegality renders many cannabis companies incapable of accepting card payments for cannabis transactions. Financial institutions find themselves confronted with potential liabilities and legal repercussions for facilitating services to cannabis entities, thereby prompting most of them to steer clear of the industry altogether.

Consequently, certain companies have resorted to unconventional measures, such as deploying “cashless ATMs” to obfuscate cannabis sales as routine cash withdrawals. In a recent development, a Maryland tax official revealed that they refrain from categorizing cannabis transactions as such on tax returns to safeguard banks from potential legal consequences.

This admission elicited criticism from a group opposing cannabis legalization, accusing the state of shielding banks engaging in activities that breach federal law. However, both the state and its banking partner, Wells Fargo, asserted that the transactions adhered to applicable legal frameworks and regulations.

This week, a vote is scheduled in Congress regarding legislation aimed at facilitating banking relationships with cannabis enterprises. Several groups, including 35 marijuana trade associations, drug-policy reform organizations and a leading national labor union, issued a joint appeal to Congress, urging the body to pass the banking bill before the year ends to address the “humanitarian toll” inflicted by frequent robberies targeting cash-heavy cannabis enterprises.

As more enterprises such as Square join the likes of Innovative Industrial Properties Inc. (NYSE: IIPR) in addressing the unique needs of the marijuana industry, the hurdles that cannabis companies have to go through in their day-to-day operations will gradually decrease.

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420 with CNW — Government Analysis Foresees Cannabis Scheduling Change by DEA

A recent government analysis predicts that the Drug Enforcement Administration (DEA) will most likely reschedule marijuana following the recommendation of federal health authorities. The DEA affirmed to Congress in 2020 that it is required by law to give the Department of Health and Human Services (HSS) precedence on matters of science and health in a report released on Sept. 13 by the Congressional Research Service (CRS), a think tank for public policy run by the federal government.

Based on the analysis, it is unlikely that the federal drug policy will be advanced in a way that may be revolutionary.

This has far-reaching consequences not only for the U.S. cannabis industry but also for individuals who use marijuana and seek federal employment or assistance, including military service and access to public housing. Researchers point out that the DEA’s past responses in congressional hearings indicate its tendency to align with the FDA’s recommendations on scientific and medical matters. The CRS report further notes that there is no record of the DEA rejecting an FDA proposal for rescheduling.

HHS’s recommendation to shift cannabis from Schedule 1 to Schedule 3 under the Controlled Substances Act is a crucial part of the ongoing federal review of marijuana’s legal status initiated by President Joe Biden last October. The DEA’s current responsibility is to evaluate how this reclassification impacts legal and policy-related questions, including U.S. obligations under international drug-control treaties. Additionally, the agency must formulate an appropriate modification to federal law.

The review is anticipated to conclude by year-end, with potential changes to federal law occurring as early as next spring.

Although marijuana remains illegal at the federal level, 38 states have legalized it for medical purposes, while 23 states have legalized it for recreational use. Rescheduling the substance would have significant consequences for both the marijuana industry and cannabis users. For starters, the stringent tax code provision, Section 280E, which currently prevents cannabis businesses from claiming regular tax deductions on federal tax returns, would no longer be applicable.

Furthermore, medical cannabis users may experience fewer barriers to accessing public housing, obtaining immigrant visas, federal employment and firearm ownership.

Under the Controlled Substances Act (CSA), Schedule 1 contains substances with a high potential for abuse and minimal or no recognized medical utility. In stark contrast, Schedule 3 substances are accessible legally through a doctor’s prescription, following a rigorous FDA approval process. Such substances are also deemed to have a relatively lower potential for psychological and physical dependence.

As the federal restrictions on marijuana gradually ease, many companies are likely to mushroom in the industry, and ancillary companies such as Innovative Industrial Properties Inc. (NYSE: IIPR) that serve marijuana companies could see their operations grow faster.

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