1307.03 Exemption: A New Tack for Legalization?

While we’ve all believed descheduling of marijuana was the goal at the federal level, there has always been another path staring us right in the face the whole time: a “1307.03 Exemption” to the Controlled Substances Act (CSA). It accomplishes the same result, that of removal of marijuana from Schedule 1.

The conflict between federal law and the 47 states with some form of Cannabis reform is a Constitutional crisis most want to avoid, but few discuss. It’s bad for the industry, bad for the states, bad for the federal, and bad for the Drug Enforcement Administration (DEA).

The effects of Schedule 1 are far worse than the plant it seeks to protect us from, totally disproportionate to a plant even DEA called “the safest therapeutically active substance known to man.” While it is a Schedule 1 controlled substance, everyone involved from the Governor on down to the budtender is exposed to criminal conspiracy plus RICO and CCE felony enhancements, as well as asset forfeiture and civil RICO suits. State-licensed marijuana businesses cannot deduct expenses on their taxes, and must pay those taxes in cash thereby incurring a 10% penalty (fine or tax).

That’s just federal law, in the state of Oregon it is 10 years and $100,000 fine simply for possession. If you have a prior felony or drug charge, are within 1,000 feet of a school, have more than 60 grams, have guns or scales, or if you modified the structure in any way you get hit with enhanced penalties including loss of driver’s license. Plus state Commercial Drug Offense charges. All just because it is still Schedule 1 in the state, never mind federally. Viva the Tenth Amendment, the only reason there are marijuana states like Oregon.

Schedule 1 means our best and brightest can’t work for Wall St firms, because Schedule 1 is an automatic SEC moral turpitude trigger. Banking and insurance are very difficult and expensive. Bank accounts, vehicles, house and property can be forfeited to the government.

It subjects the family to arrest and loss of children to foster homes and or the threat thereof as bargaining leverage. Just like we see with marijuana enforcement, the Supreme Court will never review a case to decide the legality. That’s because the standard procedure now is for the prosecutor to over-charge the crimes and seize assets, in order to force a plea deal or pressure to not sue to regain the assets forfeited to (stolen by) the police. The overwhelming power of the State will be used to keep SCOTUS from ever seeing a case.

Even in a “legal” marijuana state like Denver, Colorado, a constitutionally-protected patient growing just one plant outdoors in a fenced and locked greenhouse could see asset forfeiture of their house.

The Social Equity discussion is difficult as long as it remains Schedule 1 in the state, until fully decriminalized, records expunged, and people are released from prison for these drug crimes. Otherwise you’re just trading yesterday’s pot grower inmate for today’s.

In Maine, the federal government revoked more than $3 million in grants for children’s health programs because the state allows medical Cannabis use at school.

That’s why in Iowa the state Department of Public Health recently said it will proceed with an application asking the Drug Enforcement Administration (DEA) for a formal exemption from the CSA in an effort to prevent the loss of federal funding it receives for education and long-term care facilities. The state government, businesses and patients will see many additional benefits if the application is approved. It’s ironic as Iowa is one of the worst states in the nation for common-sense marijuana reform, but this approach is the brainchild of long-time medical marijuana advocate Carl Olsen. “A federal solution exists so that must be used,” said Olsen. (Read more on Mr Olsen’s work here.)

Under federal Title 21 CFR 1307.03, anyone can apply to the DEA for an exemption, and the DEA administrator “may grant an exception in his discretion.”

Any “person” may apply, including corporations, businesses, schools, state marijuana regulators, Tribes, and individuals. This might be a solution for those producing hemp extracts wherein the Work In Process is over the 0.3% THC limit, as well as analytical labs not registered by DEA, and trucking firms handling Cannabis materials. It opens the door to interstate trade of Cannabis between 1307.03 Exemption states. It would also take some of the pressure off CBD producers, long-yoked by marijuana laws and Schedule 1.

Others benefiting: schools allowing the dispensing of CBD or THC products to student patients so as to not lose federal funding, states with regulated marijuana programs and the licensees in those programs, and Universities and Tribes with marijuana programs. Even Psilocybin companies, therapists, and states with Psilocybin decriminalization should consider a 1307.03 Exemption, as it eliminates the need for such bad laws as Oregon’s Measure 109, which legalizes only for a handful of people and out-of-state companies.

With several thousand DEA 225 permits already issued, it would behoove DEA to allow these exemptions in order to resolve the inherent Constitutional conflict existing since states invoked the Tenth Amendment starting with California’s Proposition 215 legalizing medical marijuana in 1996. DEA can thereby maintain the appearance of integrity of the Schedules, which today are considered a cruel joke as it maintains marijuana has “no medical value” and a “high abuse potential,” despite overwhelming evidence to the contrary.

It also opens the door for a higher court to hear a case, if DEA says no. Marijuana prohibition has been unconstitutional for 83 years; Schedule 1 from day one 50 years ago. With 47 states having some form of Cannabis reform, the law won’t survive a challenge. That’s why almost no one who is arrested tries to challenge a higher principle, they make the stakes too high. If it looks like you’ll win, they’ll dismiss it. No high court will see a Constitutional case otherwise, they all know we have 90% support.

Schedule 1 for marijuana is also against Congressional intent that it be temporary until the Shafer Commission report was produced and it could be appropriately scheduled. Nixon’s hand-picked panel of prohibitionists took two years to produce a report which called for decriminalization at the federal level. Nixon promptly buried it, and his Dirty Trick of criminalizing the drug of choice of his political enemies (war protesters) lives on to this day.

The state must then be encouraged to deschedule Cannabis as well. Most states have a CSA, and either the plant and/or its chemicals are Schedule 1, even in California and Colorado.

BTW, it’s a Fifth Amendment violation to require a person to reveal his identity in order to obtain something from the same government making it illegal. That’s why the Marihuana Tax Act of 1937 ended in 1969, because the Fifth. But every marijuana state requires registration too, so it appears the 5A is yet another Constitutional right lost.

The law reads:

“Title 21 Code of Federal Regulations

§1307.03 Exceptions to regulations.

Any person may apply for an exception to the application of any provision of this chapter by filing a written request with the Office of Diversion Control, Drug Enforcement Administration, stating the reasons for such exception. See the Table of DEA Mailing Addresses in Sec. 1321.01 of this chapter for the current mailing address. The Administrator may grant an exception in his discretion, but in no case shall he/she be required to grant an exception to any person which is otherwise required by law or the regulations cited in this section.

[75 FR 10678, Mar. 9, 2010]”

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