🔮The Oracle: Inside the Collapsing Odds for 2024 Marijuana Rescheduling
How an election year push to change the legal status of weed got slow rolled
On March 15, Kamala Harris appeared at the White House next to Fat Joe, an American rapper just pardoned for marijuana convictions and declared, "nobody should have to go to jail for smoking weed."
Fat Joe was one of the 216 individuals to receive a pardon for cannabis possession, part of the Biden Administration’s efforts to relax restrictions on the drug.
On that day, odds in Polymarket’s “Will weed be rescheduled in 2024?” market hit a high of 83% before beginning a volatile ride down to 9% today.
Barring a last-minute miracle, the Fat Joe photo-op looks like the high water mark of the Biden Administration’s push to reclassify cannabis as a less strictly controlled substance before the election.
The Path to Rescheduling
A primer on US drug rescheduling:
“Rescheduling” cannabis means moving it from its current “Schedule I” drug status, the most serious class with no accepted medical use and harshest penalties, to “Schedule III,” which implies some medical uses.
Rescheduling does not federally legalize or decriminalize marijuana, but would loosen banking restrictions that make it hard for weed businesses to operate.
The Drug Enforcement Administration (DEA) is the primary actor in the process, which involves multiple steps and input from at least three other federal agencies. As a comparison, rescheduling the opioid hydrocodone took nine years.
How the Odds Changed
October 6, 2022: Biden Administration issues a blanket pardon for all marijuana simple possession offenses under federal and DC law, and directs the Department of Health and Human Services (HHS) and Department of Justice (DOJ) to review marijuana’s scheduling.
August 29, 2023: HHS recommends that marijuana be moved to Schedule III.
Jan 16, 2024: Market Launched. The “Will weed be rescheduled in 2024” Polymarket market is launched. Initial trading stabilizes at 60-70% odds of rescheduling.
March 15: Roundtable with Fat Joe. Kamala Harris’ White House event with marijuana pardon recipients marks the peak of optimism for a rescheduling. 🔮Odds for rescheduling hit an all-time high of 83%.
March 27: Romney Letter Highlights Opposition. A letter from Sen. Romney to the Biden Administration warns that rescheduling may violate the Controlled Substances Act and US treaty obligations. 🔮Odds for rescheduling fall below 50% in the following days.
April 30: DEA Onboard. The Drug Enforcement Agency announces it will move to reschedule, kicking off a formal rulemaking process. 🔮Odds for rescheduling spike briefly to 76%.
July 22: Comment Period Ends. DEA receives over 40,000 comments on the proposed rule. According to one analysis, nearly 70% of the comments supported actions beyond rescheduling, such as decriminalization or full legalization. The end of the comment period, however, highlighted the hurdles that remained, including the potential for additional hearings or litigation by cannabis opponents. 🔮Odds for rescheduling in 2024 sink below 40%.
August 20: Democratic Platform Applauds Rescheduling. Delegates at the Democratic National Convention approve a platform praising Biden’s marijuana pardons and rescheduling initiative. 🔮Odds for rescheduling briefly surge to 67%.
Aug 27: Administrative Hearing Postponed. DEA sets December 2 as the start date for the next step in the process: formal hearings on rescheduling. Sandwich between the presidential election and holidays, this timetable leaves virtually no room for any hiccups before end-of-year. 🔮Odds for rescheduling sink to 9%.
So You’re Telling Me There’s a Chance?
Some advocates are still optimistic that rescheduling gets done before Biden ends his term:
Rep. Earl Blumenauer, co-chair of the Congressional Cannabis Caucus, released a statement saying: “we still have every reason to believe that it will happen before President Biden leaves office.”
And Bryan Barash of the Coalition for Cannabis Scheduling Reform told Marijuana Moment that since the Biden administration’s review of marijuana has been expedited at every stage, they are “optimistic the proposed rule will be finalized this year.”
But according to briefings on the issue, several steps remain:
DEA holds its administrative hearing about the rule starting on December 2. This process is akin to a courtroom trial, and may contain its own delays.
The DEA must draft and publish a final rule in the Federal Register, where it will be effective either 30 or 60 days after publication, depending on if the agency classifies the rule change as “major.”
During this time, any of the anti-weed lobbying groups like Smart Approaches to Marijuana may file a lawsuit and request a court order freezing the change.
At this point it would be the court’s decision on whether to allow the measure to go into effect, or halt it pending the outcome of litigation that could take years.
What Comes Next?
At this point, rescheduling weed before the end of Biden’s term would require both pressure on the DEA to expedite its hearings and a court ruling to allow the rule to go into effect despite likely challenges.
One possible scenario is that Trump wins in November (🔮 50% odds) and the Biden administration launches a last ditch effort to push the measure through in its waning days. However, reports suggest that many drug warriors at the DEA are opposed to rescheduling, and thus have an incentive to slow the process during the lame duck period.
If elected in November, Kamala Harris is likely to proceed with the pardon and rescheduling track.
However, Trump’s position on reclassification is “a close call.” The former president is known to be personally opposed to drugs and alcohol, but in office proved to be a less harsh drug opponent than many had feared, and has said people should not be jailed for cannabis - a similar stance to the Biden-Harris administration.
Significant changes in US drug policy continue at the state and local levels. There is a referendum on the ballot in Florida this election cycle to legalize recreational marijuana, which is currently favored to pass in Polymarket odds. Similar measures are on the ballot in North and South Dakota.
Disclaimer
Nothing in The Oracle is financial, investment, legal or any other type of professional advice. Anything provided in any newsletter is for informational purposes only and is not meant to be an endorsement of any type of activity or any particular market or product. Terms of Service on polymarket.com prohibit US persons and persons from certain other jurisdictions from using Polymarket to trade, although data and information is viewable globally.
Thanks so much for this information. Kind of expected this only wanted confirmation. It's unfortunate with the possible scientific breakthroughs we must continue to wait for God knows how many years.
In other words, the odds in March got "too high."