LOUISVILLE, Ky. — Kentucky has been on the pathway of greenlighting marijuana for medical use for nearly two years.
Gov. Andy Beshear signed two executive orders in late 2022 that made medical marijuana accessible to some Kentuckians.
Though the actual cultivation of cannabis in the commonwealth could soon be a reality as Beshear signed House Bill 829 into law in April.
This means potential growers and sellers would be able to apply for licenses beginning July 1, six months earlier than the January 2025 deadline originally set. The applications would be handled by the Kentucky Medical Cannabis Program and overseen by the Cabinet for Health and Family Services.
The available licenses would be for cultivation, processing and dispensaries.
However, things could possibly change as the federal government is looking to reclassify marijuana as a less dangerous drug.
It doesn’t mean there would be a full legalization, but the penalties for having small amounts of the drug would be less severe.
What is the proposed federal change?
Right now, marijuana is classified as a “Schedule I drug” – meaning it has no federally accepted medical use and a high potential for abuse. It’s in the same category as heroin and LSD.
The U.S. Drug Enforcement Administration wants to classify it as “Schedule III” – which is moderate to low potential for developing dependence and would be in the same category as ketamine, anabolic steroids and some acetaminophen-codeine combinations.
How would this impact Kentucky’s road to medical marijuana legalization?
According to the Cabinet for Health and Family Services (CHFS), if marijuana is reclassified to a Schedule III, it could present “significant” tax implications for prospective licensees.
As a Schedule I controlled substance, under current federal law marijuana businesses can’t deduct business expenses on their federal tax filings.
With a move to Schedule III, marijuana businesses will not be subject to the prohibition in Section 280E and will be able to deduct their business expenses.
CHFS said the reclassification of marijuana may also have an impact on research.
The DEA is required to set annual production quotas for Schedule I controlled substances manufactured for use in approved research. They are not required to set annual production quotas for Schedule III controlled substances.
Because of this, officials said there could be more marijuana available for approved federal research.
Full statement from CHFS:
The Drug Enforcement Administration’s reported reclassification of marijuana from a Schedule I to a Schedule III controlled substance will likely have significant tax implications for prospective licensees. Because marijuana is currently a Schedule I controlled substance, under current federal law (26 U.S. Code §280E) marijuana businesses – unlike other businesses – cannot deduct their businesses expenses on their federal tax filings. By rescheduling marijuana to a Schedule III, marijuana businesses will not be subject to the prohibition in Section 280E, and thus will be able to deduct their businesses expenses.
Reclassification may also have impacts on research. Currently, the Drug Enforcement Administration is required to set annual production quotas for Schedule I controlled substances manufactured for use in approved research. DEA is not required to set annual production quotas for Schedule III controlled substances. As a result, there may be more marijuana available for approved federal research.
►Make it easy to keep up-to-date with more stories like this. Download the WHAS11 News app now. For Apple or Android users.
Have a news tip? Email assign@whas11.com, or visit our Facebook page or Twitter feed.