Report: Cannabis rescheduling could create job more than 50,000 jobs

Rescheduling marijuana from Schedule I to Schedule III could catalyze a surge of new job openings in the industry by 2030, according to a report submitted to federal regulators on Monday.

The Minority Cannabis Business Association provided its economic analysis to the Drug Enforcement Administration during the final hours of the agency’s rescheduling public commenting period, as the it considers moving the drug to a lower classification under the Controlled Substances Act.

“Rescheduling would … lead to substantial tax savings and increased profitability for marijuana businesses, including small and minority-owned businesses,” the MCBA stated in its public comment attachment, which it shared in an email to Green Market Report.

The group’s survey of more than 200 marijuana licensees across 32 states found only 27% of businesses are currently profitable, with 41% breaking even, and 32% losing money. More than 80% cited finances and taxes as major issues.

If rescheduled, cannabis companies could take federal tax deductions currently prohibited by Internal Revenue’s 280E code. The MCBA estimated the industry has overpaid $2.2 billion in taxes compared to other sectors due to this restriction.

“Without tax reform that comes with rescheduling, many small and minority marijuana licensees will go out of business, resulting in major economic losses and unemployment for thousands of local employees,” the report warned.

Rescheduling could add 55,500 jobs by 2030, generating up to $2.7 billion in wages and $5.6 billion in new economic activity, according to MCBA projections.

The DEA specifically requested economic data when it published the proposed rescheduling rule in May. Monday marked the deadline for public comments, with the agency receiving nearly 50,000 submissions by its close.

The next steps in the process remain unclear, as the DEA has wide discretion in how quickly it will move forward, according to Shane Pennington, an attorney who has closely studied the rescheduling procedure. Pennington told Green Market Report that the DEA must now sift through all comments to determine if any raise “significant” legal or factual questions that need to be addressed.

The MCBA also submitted comments on behalf of the Equity Policy Roundtable in support of rescheduling while also calling for the federal agency to go further and fully remove marijuana from the CSA. The roundtable includes several organizations focused on equity in cannabis, including:

• Social Equity Empowerment Network
• Minorities for Medical Marijuana
• Cannabis Human Resources Council
• New York Cannabis Retailers Association
• The TRAEHNY Partnership
• National Cannabis Industry Association
• Service Disabled Veterans in Cannabis Association
• United Empowerment Party
• Indigenous Cannabis Industry Association.

This analysis of the potential for job growth aligns with predictions from cannabis jobs platform Vangst, which forecasted in March that up to 100,000 new jobs could emerge if cannabis is reclassified to Schedule III. The firm’s latest industry salary guide posited that 86% of cannabis companies plan to expand their workforce in 2024, with the retail segment showing particular promise as 93% of surveyed retail companies plan to increase staff.

The Roundtable noted that current restrictions have led to tax rates of up to 75% of gross revenue for plant-touching businesses unable to deduct standard operating and marketing expenses.

“Many small to mid-sized businesses are barely holding on, waiting for rescheduling, or even better, descheduling,” the group stated.

The coalition also highlighted potential economic benefits of less restrictive scheduling, such as simplified research processes and the possibility of health insurance coverage for marijuana-based treatments. However, the group cautioned that rescheduling could lead to complex federal-state dynamics and potential cost implications for patients.

“Descheduling marijuana, removing it altogether from the Controlled Substances Act, would be monumental and would represent a form of industry reparations,” the group wrote, arguing it would help address racial and economic inequities stemming from prohibition.

The MCBA acknowledged that completely removing marijuana from the controlled substances list would provide greater economic benefits, but said the proposed rescheduling would still significantly help the industry.

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