Rescheduling Marijuana: Implications for Criminal and Collateral Consequences
July 23, 2024
Rescheduling Marijuana: Implications for Criminal and
Collateral Consequences
Marijuana is the most commonly used illicit drug in the
of not more than five years in prison; and a criminal fine
United States. The number of adults that use marijuana
of not more than $250,000 if an individual or $1 million
continues to increase, as does the number of states that
if other than an individual.
allow for its use.
These offenses carry more severe penalties if death or
Under the Controlled Substances Act (CSA), marijuana and
serious bodily injury occurs or if it is not the defendant’s
its derivatives are classified as Schedule I controlled
first felony drug conviction.
substances, meaning their manufacture, possession, and
distribution are illegal except for the purposes of federally
In practice, most individuals (74.8% in FY2023) sentenced
sanctioned research. While many states have enacted laws
in federal court for marijuana trafficking convictions are
allowing for marijuana use, and the federal government has
sentenced to less than five years in prison. Over the last five
generally not interfered with their implementation,
years (FY2019–FY2023), the number of individuals
violations of federal marijuana laws continue to have
sentenced for marijuana trafficking in federal court has
criminal and civil consequences. In addition to criminal
declined by 66%, from 1,674 per year to 561. This decline
penalties, past and current marijuana use or marijuana-
is even sharper when considering longer term trends. In
related convictions may subject individuals and businesses
FY2014, 3,876 individuals were sentenced in federal court
to a number of consequences under various policies and
for marijuana trafficking (almost seven times higher than
federal laws.
FY2023). By contrast, the total number of individuals
sentenced for all federal drug trafficking offenses has
In May 2024, the Department of Justice (DOJ) proposed to
declined more gradually over the past 10 years, from
move marijuana from Schedule I to Schedule III under the
21,152 in FY2014 and 19,765 in FY2019 to 18,939 in
CSA. While Schedule III is less restrictive than Schedule I
FY2023.
and allows for medical use of marijuana—only if approved
by the Food and Drug Administration (FDA) and dispensed
As with other controlled substances obtained without a
pursuant to a valid prescription—most of the current
valid prescription, simple possession of marijuana carries a
consequences of marijuana use or marijuana-related
penalty of up to one year in prison and/or a minimum fine
convictions would remain if marijuana moves to Schedule
of $1,000. Possession of a “personal use amount” of
III. This In Focus discusses those consequences and what
marijuana and certain other controlled substances is subject
would change if marijuana is rescheduled to Schedule III,
to a civil penalty of up to $10,000. Relatively few offenders
as well as options for Congress.
are sentenced for marijuana possession in federal court, and
Criminal Penalties for Federal Marijuana
the majority of cases originate from the Southwest border.
Crimes
Federal crimes (and associated penalties) involving
controlled substances, including marijuana, are not limited
Federal marijuana crimes may subject individuals to a
to the CSA, and can be found in other areas of the U.S.
number of criminal penalties that vary depending on the
Code. For example, laundering money from controlled
circumstances of the case:
substance violations (see 18 U.S.C. §1956) and smuggling
• A first offense of trafficking (i.e., manufacturing,
controlled substances into the country via aircraft (see 19
distributing, or dispensing, or possessing with intent to
U.S.C. §1590) carry sentences of up to 20 years in prison.
manufacture, distribute, or dispense) 1,000 kg or more
Changes to Criminal Penalties if Marijuana is
of marijuana or 1,000 or more marijuana plants carries a
Rescheduled to Schedule III
penalty of not less than 10 years in prison or more than
life; and a criminal fine of not more than $10 million if
Many CSA penalties for marijuana violations are written
an individual and $50 million if other than an individual
specifically for marijuana and are not tied to its Schedule I
(e.g., a drug trafficking organization);
classification. If marijuana moves to Schedule III, those
• A first offense of trafficking 100 to 999 kg of marijuana
penalties would remain the same. Many CSA and other
or 100 to 999 marijuana plants carries a penalty of not
federal offenses associated with marijuana’s general status
less than 5 years or more than 40 years in prison; and a
as a controlled substance would also remain the same. For
criminal fine of not more than $5 million if an
example, it is unlawful for any person knowingly or
individual and $25 million if other than an individual;
intentionally to possess a controlled substance unless such
and
substance was obtained pursuant to a valid prescription
•
from a medical practitioner. If marijuana moves to
A first offense of trafficking less than 50 kg of
Schedule III, this does not mean that all marijuana products
marijuana or 1 to 49 marijuana plants carries a penalty
would be lawful to manufacture, distribute, or possess. The
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Rescheduling Marijuana: Implications for Criminal and Collateral Consequences
manufacture, distribution, dispensing, and possession of
• ineligibility for certain visas and other immigration-
marijuana would remain subject to applicable criminal
related consequences; and
prohibitions under the CSA (21 U.S.C. §§841–844). In
• a range of implications for postsecondary students and
addition, marijuana would remain subject to applicable
employees on college campuses, as institutions of higher
provisions of the Federal Food, Drug, and Cosmetic Act
education must implement a program to prevent use of
(FDCA). Under the FDCA, a drug containing marijuana
illicit drugs and alcohol by students and employees.
would need FDA approval to be lawfully introduced into
interstate commerce.
Some of these consequences can be the result of past or
current use of marijuana (or other controlled substances) as
Some CSA penalties for marijuana are specific to its
well as criminal convictions involving marijuana. These
Schedule I classification. For example, CSA advertising
disqualifying circumstances come to light in a range of
offenses (21 U.S.C. §843(c)) are written specifically for
ways including when an individual is filling out a form or
Schedule I. It is unlawful to knowingly place in any
application or undergoing drug testing, or when an
newspaper, magazine, handbill, or other publications any
organization conducts background checks.
written advertisement that has the purpose of seeking or
offering illegally to receive, buy, or distribute a Schedule I
Changes to Consequences for Marijuana Use or
controlled substance. The penalties for doing so are up to
Marijuana-Related Convictions if Marijuana is
four years in prison and/or a criminal fine. These penalties
Rescheduled to Schedule III
would no longer apply if marijuana moves to Schedule III.
If marijuana moves to Schedule III, most of the
Federal Tax Treatment
consequences for its use or for marijuana-related
convictions would remain the same. While the use of
Marijuana producers and retailers may not deduct the costs
marijuana by prescription for medical purposes would
of selling their product (e.g., payroll, rent, advertising) for
become lawful, marijuana products that are available in
the purposes of federal income tax filings. The Internal
dispensaries in many states across the country are not
Revenue Code Section 280E states that:
currently available via lawful prescription. It is uncertain if
No deduction or credit shall be allowed for any
or when these products might be approved for such use and
amount paid or incurred during the taxable year in
available via lawful prescription if marijuana is rescheduled
carrying on any trade or business if such trade or
to Schedule III. Under federal law, a drug must be approved
business ... consists of trafficking in controlled
by the FDA before it may be marketed or prescribed in the
United States. To date, FDA has approved one cannabis-
substances (within the meaning of schedule I and II
derived drug and three marijuana-related drugs that are
of the Controlled Substances Act)[.]
available by prescription.
Media reports indicate that the Internal Revenue Service
Selected Legislation in the 118th
has enforced Section 280E in audits of marijuana-related
Congress
businesses by refusing to accept these businesses’
deductions.
Since DOJ proposed to reschedule marijuana, two bills
Changes to Federal Tax Treatment if Marijuana is
have been introduced in Congress that would seek to ease
Rescheduled to Schedule III
the criminal and collateral consequences of marijuana use
and marijuana-related convictions. One bill would create an
If marijuana is rescheduled to Schedule III, it would make
expungement mechanism and a process to petition for
Section 280E inapplicable to marijuana businesses. These
expungement for low-level violations of the CSA as it
businesses would be able to deduct the costs of selling their
relates to marijuana. The other bill would limit federal
product.
agencies’ consideration of marijuana use when making an
Collateral Consequences for Marijuana
employment suitability or security clearance determination.
Use or Marijuana-Related Convictions
Prior to the rescheduling proposal, Members of Congress
introduced other bills that would ease consequences of
As with other controlled substances, past and current
marijuana use and marijuana-related convictions, including
marijuana use or marijuana-related convictions may subject
one bill that would allow those who lawfully (under state
an individual to a number of collateral consequences under
law) use marijuana to stay in federally funded housing, and
federal laws and policies. Aside from criminal penalties,
another bill that would exempt certain individuals who use
these consequences include, but are not limited to,
medical marijuana from federal firearms-related
•
restrictions.
ineligibility for or termination from employment
(including federal employment and the military);
Some Members of Congress do not support easing
•
marijuana-related prohibitions. One bill introduced in the
inability to purchase and possess a firearm;
118th Congress would increase consequences for states that
• ineligibility for federal housing and other social
allow for recreational use of marijuana by withholding 10%
assistance programs;
of their federal funds under the National Highway
• ineligibility for certain federal benefits including the
Performance Program.
issuance of any grant, contract, loan, and professional or
commercial license provided by a U.S. agency or by
Lisa N. Sacco, Analyst in Illicit Drugs and Crime Policy
federal funds;
IF12715
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Rescheduling Marijuana: Implications for Criminal and Collateral Consequences
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