R&D Tax Credit: A Viable Option to Reduce Tax Burdens?

R&D Tax Credit: A Viable Option to Reduce Tax Burdens?

Editor’s note: This story was updated at 5:30 p.m. Dec. 2 to include further detail on the vote, including statements from cannabis companies and CND delegates.

In a historic vote, the United Nations Commission for Narcotic Drugs (CND) voted narrowly Dec. 2 to remove medicinal cannabis from Schedule IV of a 1961 treaty on narcotic drugs.

The CND, a commission based in Vienna with members from 53 different countries, voted on six different cannabis-related recommendations presented by the World Health Organization (WHO). Those recommendations outlined protocol for internationally regulating the medical use of different parts of the plant, including cannabis as a whole, cannabidiol (CBD) and tetrahydrocannabinol (THC). (Kenzi Riboulet-Zemouli, a Barcelona-based independent researcher and cannabis advocate, has a breakdown of what each recommendation would do on his blog.) 

During its meeting Dec. 2, the CND also rejected a recommendation from WHO to schedule medical CBD, leaving it outside of treaty controls. 

However, the vote to classify cannabis remained the main topic of the recent meeting. The CND voted 27-25 to reclassify both cannabis and cannabis resin for medicinal purposes from Schedule IV to Schedule I, removing them from being regulated like some of the world’s most dangerous drugs. (The CND’s scheduling system works in an opposite sequence when compared to the U.S. Controlled Substances Act.)

In an article on Fundación Canna, Riboulet-Zemouli writes “WHO’s recommendations were unprecedented since the Single Convention on narcotic drugs passed in 1961.”

Experts say this move could not only improve accessibility to medical cannabis across the world, but also affirms international support of scientific evidence on cannabis as a medicine.

“The removal from Schedule IV is … phenomenal news for millions of patients around the world and a historical victory of science over politics,” Riboulet-Zemouli says in a press release.

What the Vote Means for Cannabis in the U.S.

Global accessibility, however, still depends on individual countries’ laws, as each member of the UN holds the power to determine its own cannabis regulations.

As Joshua Horn and Jonathan Dolgin of Fox Rothschild LLP write on Cannabis Business Times, the U.S. has proven to have an influential role in international drug regulations. The U.S. voted for the cannabis reclassification—a move that could signify the country’s interest in moving toward cannabis decriminalization or all-out legalization. (Relatedly, members of the U.S. House Rules Committee also voted Dec. 2 to advance an act that would remove marijuana from the federal Controlled Substances Act.)

“If I had to predict, I think the lower hanging fruit in this country to address is further decriminalizing cannabis as opposed to removing it altogether tomorrow from [the Controlled Substances Act],” Horn tells Cannabis Business Times and Hemp Grower.

U.S. cannabis businesses have embraced the reclassification from the CND. While the move was largely symbolic, cannabis business leaders say they are hopeful for what it represents.

“We welcome the rescheduling of cannabis to only [Schedule 1], as this recognizes the positive impact cannabis has today for thousands of suffering patients,” says Dirk Heitepriem, Canopy Growth’s vice president of government and stakeholder relations for Europe, the Middle East and Africa. “We hope this will empower more countries to create frameworks which allow patients in need to get access to treatment.”

Other recommendations that failed to pass were removing extracts, tinctures and THC isomers from Schedule I status, as well as removing delta-9 THC from its status as a Schedule II substance. (The U.S. voted to remove extracts and tinctures, but voted against removing delta-9 THC.)

“…Government’s failure to accept the more advanced WHO proposals is disappointing and represents a lost opportunity to make the treaty best fit [its] purpose,” Riboulet-Zemouli points out in a press release. “However, none of today’s negative votes will result in any worsening of controls over cannabis whatsoever.”

What the Vote Means for CBD in the U.S.

It’s important to note that the CND was only voting on cannabis and its derivatives that are used for medicinal purposes. Recreational marijuana, hemp and its derivatives, and CBD added to food, topicals and dietary supplements were not subject to CND’s vote. (Hemp and its derivatives are only considered controlled substances by the CND when they are used for medicinal or scientific purposes.)  

This is an issue that became muddled even among members of the CND, Riboulet-Zemouli writes on Fundación Canna, contributing to the commission’s long-delayed vote.

CBD medicinal products, such as Epidiolex, were up for vote because these medications can contain up to 0.2% THC. WHO’s recommendation proposed that these medications be exempt from CND’s purview—specifically, that “preparations containing predominantly cannabidiol (CBD) and not more than 0.2 per cent of delta-9 tetrahydrocannabinol are not under international control.”

As such, the hemp and CBD industries in the U.S. and elsewhere are largely unaffected by the vote.

The U.S. delegate said they rejected the CBD proposal “on legal and procedural grounds.”

“Cannabidiol has not demonstrated abuse potential, and it is not our position that cannabidiol should be or is under the control of the international drug conventions,” the delegate said. “…We believe the member states are capable of determining for themselves what should be considered a ‘pure’ cannabidiol preparation for domestic enforcement purposes based on analytical capacity, abuse liability, and prioritization of prosecutorial resources.” 

Published at Thu, 03 Dec 2020 15:42:00 +0000

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