The DEA's War on Cannabis Won't End with Rescheduling Is Cannabis Better Off Being Federally Illegal?

Rumor has it that on August 1, the DEA will reclassify marijuana as a Schedule 2 substance.

Legal cannabis advocates are responding to this news with a steady wave of applause and excitement. But I'm still unimpressed.

To be honest, the fact that the DEA – essentially a law enforcement agency – gets to decide what's dangerous and what is not illustrates just how absurd the war on drugs is.

Why is it that a law enforcement agency, not healthcare professionals, determine how anything is scheduled?

You see, as it is now, cannabis is a Schedule 1 substance. This means that, according to federal laws, it is illegal for any person to manufacture, distribute, dispense or possess cannabis. Other Schedule 1 substances include: Heroin, LSD and Ecstacy.

Nevermind the fact that not a single person has ever overdosed on cannabis. But perfectly legal opiates that are not considered Schedule 1 substances, contributed to the deaths of tens of thousands of people last year.

Of course, I don't write the rules, I just mock them.

Don't get too excited

According to a recent piece in the Santa Monica Observer, a DEA lawyer with knowledge on the rescheduling issue has disclosed the DEA's plan to reschedule cannabis as a Schedule 2 substance. This puts it in the same category as opium, morphine, and cocaine. Again, absolutely absurd.

The good folks over at the Santa Monica Observer noted that with cannabis being reclassified as a Schedule 2 substance, it essentially makes medical cannabis legal on a national level. But don't get too excited.

While there would be some benefits to this, such as making it easier to conduct research on cannabis and allowing sick folks to get access to medical cannabis in states that have not legalized, as with anything run by the government, there's a catch.

You see, under the scenario of cannabis being classified as a Schedule 2 drug, the FDA would then be involved, forcing cannabis producers to jump through all kinds of regulatory hoops. And these regulations aren't cheap. I'd be curious to know how many cannabis producers could even afford to comply with FDA regulations.

When you start peeling back the layers of the dirty onion, you actually start to question whether or not this is simply a gift to Big Pharma. It's as if the medical cannabis companies that have been doing the heavy lifting for the past ten years will be forced to beg for permission along the sidewalks of the Hart Senate Building while the deep pockets of Pfizer and Purdue are carried through the front door like royalty.

It should also be noted that under the Schedule 2 scenario, it's entirely possible that cannabis would be considered a government-regulated controlled substance that requires the plant to be sold only by licensed pharmacists.

I'm not saying it's necessarily a bad thing to have a licensed pharmacist dispense medical cannabis, but would that mean that it could then only be dispensed in a licensed pharmacy? I don't know the answer to that question, and certainly I have no problem with folks being able to buy their medial cannabis at their local Walgreens. My concern, however, is that under Schedule 2, the government essentially gets to take an illegal substance, keep it illegal without government approval, and have more say as to who gets the privilege of using it. This is not a step in the right direction.

The bottom line is that there is absolutely no logical or rational reason cannabis should even be scheduled at all. It should be completely descheduled and legalized – no middle ground.

So if you're a cannabis investor, right now your best bets will continue to be with cannabis companies operating in regions where it is completely legal or will be completely legal in the near-term. This is why I remain so bullish on cannabis companies operating in Canada, where next year it will become legal across the entire country.

You can read more about some of these companies in our special report: Marijuana Outlook: Stocks to Buy in 2016. Free downloads are available here.