NH lawmakers doubt federal cannabis policy shift will sway Ayotte, but hope for future change

The Trump administration’s reclassification of medical marijuana as a less dangerous drug may signal a new era for cannabis at the federal level, but New Hampshire lawmakers aren’t counting on Washington’s move to loosen restrictions in the state any time soon. 

On Thursday, Todd Blanche, acting U.S. Attorney General, signed an order moving medical marijuana from Schedule I, a category of drugs that includes heroin and carries the highest potential for abuse, to Schedule III, which covers drugs with a moderate to low potential for physical and psychological dependency.

The decision largely legitimizes medical marijuana programs already operating in 40 states, including New Hampshire.

State Sen. Keith Murphy, a Republican and longtime advocate for cannabis legalization, called the change “long overdue.”

“I believe that it’s a fairly low-impact drug, and I’m hopeful that, in years to come, the majority of the legislature will see things my way and vote to legalize recreational use,” he said. 

But in New Hampshire, Murphy’s pipe dream may be a long way off.

Gov. Kelly Ayotte, a Republican, has repeatedly opposed recreational cannabis legalization at the state level, and her stance has cast a long shadow over legislative efforts. The number of legalization bills introduced this session has been low, and the governor’s vow to veto any such measure makes passage into law a dead end.

“I don’t believe that Governor Ayotte will support legalized marijuana anytime soon, and I think that the legislature should be focused on legislation that has an opportunity of becoming law, rather than waste time with legislation that is doomed out of the gate,” Murphy said. “I respect her position, but I just disagree with her in good faith.”

New Hampshire remains the only state in New England that prohibits recreational marijuana sales and use.

State Rep. Kevin Verville, a Deerfield Republican, said the current legislature isn’t ready to craft sound recreational marijuana policy, but he’s hopeful that federal reclassification could gradually shift opinions at the state level.

“I think the change in federal policy will certainly help to get more people to be willing to support common sense reform with regards to these types of substances, but I don’t expect the governor’s position to change at all,” he said. 

For legalization to stand a chance, Verville said, there would need to be a “veto-proof majority” in both the House and Senate to override what would almost certainly be a veto from Ayotte. While a significant number of Republicans agree with Verville and Murphy — the House routinely passes legalization bills, which tend to unravel in the Senate — they’d likely fall short of the two-thirds support needed to overturn a veto.

The governor’s office could not be reached for comment.

Tax breaks

Blanche’s order creates an expedited registration system for state-licensed medical marijuana producers and distributors with the U.S. Drug Enforcement Administration.

It also makes clear that cannabis researchers won’t be penalized for obtaining state-licensed marijuana or marijuana-derived products for use in their work.

In New Hampshire, the news was welcome among the state’s three nonprofit dispensaries — GraniteLeaf Cannabis, Sanctuary Medicinals and Temescal Wellness — the only companies licensed to sell cannabis products in the state.

But it was a financial provision that really caught the industry’s attention: For the first time, state-licensed medical marijuana companies will be allowed to deduct business expenses on their federal taxes.

Matt Simon, who lobbies for cannabis legislation on behalf of GraniteLeaf Cannabis, said the policy shift is symbolic, but the tax change is an unexpected and welcome surprise.

“The IRS has basically viewed cannabis businesses as illicit drug-selling organizations,”  he said. “Medical cannabis businesses will be able to do normal tax deductions on their federal tax returns for the first time, which will save a significant amount of money.”

Around 15,000 people are certified to legally use marijuana in New Hampshire through the state’s Therapeutic Cannabis Program, which requires a doctor’s approval to join.

Marijuana products can be costly, with patients paying out of pocket since insurance does not cover them. These tax deductions could help ease that burden by driving prices down for patients.

For those who are not registered with the state to access therapeutic cannabis, Verville said the alternatives are either crossing state lines with a controlled substance or turning to the black market, where there is a risk of being exposed to far more dangerous substances.

Verville is optimistic that cannabis legalization in New Hampshire is inevitable. 

“There’s a generational shift that took place decades ago in society, and that generational shift is now starting to move seriously in the legislature, as you get younger people with different positions on these substances becoming of governing age,” he said. “So for me, it’s not an if, it’s a when.”