Student presentation to explore how federal rescheduling might impact medical marijuana expenses

Americans currently cannot use funds from their employer-sponsored tax-advantaged medical accounts, such as HSAs or FSAs, to purchase medical marijuana. Marijuana’s status as a Schedule I drug makes it incredibly difficult for drug developers to gather funding and conduct the necessary research to obtain FDA approval for marijuana drugs. Without FDA approval, it is exceedingly difficult for medical marijuana drugs to meet the “qualified medical expense” standard required for HSA or FSA eligibility. 

            Marijuana’s potential rescheduling to Schedule III will ease the administrative barriers that currently prevent medical marijuana from reaching “qualified medical expense” status. In theory, if medical marijuana becomes a qualified medical expense, Americans will be able to purchase it with funds from their tax-advantaged accounts. Will some employers restructure their benefit plans to disincentivize employees’ marijuana purchases? This question highlights the competing incentives underlying employer-sponsored tax-advantaged accounts. 

            The medical expense deduction disproportionately benefits advantaged or high-income Americans. This project considers whether other medical tax benefits might improve medical marijuana access to those Americans who have been disadvantaged by our country’s unjust history surrounding marijuana.