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HHS’s Recommendation to Reschedule Cannabis to Schedule III: A European Venture Capital Fund’s Perspective

The US Department of Health and Human Services (HHS) recently recommended that cannabis be rescheduled from a Schedule I to a Schedule III controlled substance.

This is a significant development, as it signals a growing understanding among international medical bodies of the therapeutic potential of cannabinoids and their comparatively favorable side effect profile.

Schedule I substances are defined as having a high potential for abuse, no currently accepted medical use in treatment in the United States, and a lack of accepted safety for use under medical supervision. Schedule III substances, on the other hand, have a moderate potential for abuse, a currently accepted medical use in treatment in the United States, and a relative safety for use under medical supervision.

The HHS’s recommendation is influenced by an increasing body of scientific and medical research into cannabinoids, and in particular, their potential for therapeutic uses in the treatment of:

  • Pain
  • Nausea and vomiting
  • Spasticity associated with multiple sclerosis
  • Chemotherapy-induced nausea and vomiting
  • Epilepsy
  • Glaucoma
  • Sleep disorders
  • Anxiety
  • Depression
  • Post-traumatic stress disorder (PTSD)

The research also points to cannabinoids having a low potential for abuse and addiction when compared to traditional medications, such as opiates and benzodiazepines. Howard Sklamberg, former deputy commissioner for global regulatory operations and policy at the FDA, noted:

“Descheduling would mean that HHS and FDA would be deciding there was no abuse potential, which would be a very big step for HHS and FDA to take and one that also would have ramifications for its general controlled substance program,” Sklamberg said Wednesday.

“Then, in terms of choosing Schedule III, that’s not surprising either, given that Schedule III is not that big of a leap for the agencies to take under the current law, and I think it’s quite supportable under the law and regulations as they exist,” he said. “Schedule III also has tax implications that will be helpful for the industry. That’s obviously not part of the FDA’s mandate, but that’s a reality.”

 

The HHS’s recommendation is a major step forward in the fight for medical cannabinoid reform. If the Drug Enforcement Administration (DEA) follows the HHS’s recommendation and reschedules cannabinoids to Schedule III, it would make it easier for researchers to study the compounds and for patients to access them for medical purposes.

The HHS’s recommendation is also a positive sign for the European venture capital community. The European market for cannabinoid-based products is expected to grow significantly in the coming years, and the HHS’s recommendation could help to accelerate this growth.

As a European venture capital fund that invests in life sciences and picks and shovels businesses related to the endocannabinoid system, we are encouraged by the HHS’s recommendation. We believe that the European market for cannabinoid-based products has the potential to be a major growth opportunity, and we are actively looking for investment opportunities in this space.

If you are a company that is developing or commercializing cannabinoid-based products, we encourage you to reach out to us. We would be happy to discuss your business with you and explore potential investment opportunities.

In addition to the therapeutic potential of cannabinoids, there are a number of other reasons why we believe the European market for cannabinoid-based products is poised for growth. These reasons include:

  • The growing acceptance of medical cannabis by patients and healthcare professionals
  • The increasing number of clinical trials demonstrating the efficacy of cannabinoids for a variety of medical conditions
  • The growing consumer demand for natural and plant-based health products
  • The favorable regulatory environment in many European countries

We believe that the European venture capital community is well-positioned to capitalize on the growth of the cannabinoid-based products market. We have a deep understanding of the science and business of cannabinoids, and we have a network of experienced investors and entrepreneurs who are passionate about this space.

If you are interested in learning more about our investment thesis or exploring potential investment opportunities, please do not hesitate to contact us.