April 24, 2026.
The U.S. Department of Justice (DOJ) issued a Final Order (“the Order”) immediately placing both FDA-approved marijuana products and state-regulated medical marijuana products in Schedule III of the Controlled Substances Act (CSA). Simultaneously, the DOJ initiated an expedited administrative hearing process to consider broader rescheduling of marijuana, which will commence on June 29, 2026 and complete on July 15, 2026. The Order was issued under the Attorney General’s treaty-obligation scheduling authority, bypassing notice-and-comment rulemaking. This is the most significant shift in federal drug policy in more than half a century and serves to restore clinical integrity to federal drug policy.
Since the Controlled Substances Act (CSA) passed in 1970, the United States government has classified drugs into schedules based on their accepted medical use, their potential for abuse, and their risk of dependency. Cannabis has remained in Schedule I, alongside heroin, since the law was enacted, a classification that by design has blocked scientific and medical research on the plant for decades. The move to Schedule III fundamentally shifts this paradigm, reopening the door to federally sanctioned cannabis research and inviting broader engagement from universities and major medical institutions to advance urgently needed clinical trials. Though it reduces severe bottlenecks; ultimately, broader legislative changes are still needed to fully unburden cannabis research.
The DOJ grounds the Order exclusively in 21 U.S.C. § 811(d)(1), which directs the Attorney General to issue a scheduling Order—without public notice and comment—when control of a substance is required by United States obligations under international treaties as effective on October 27, 1970. Under § 811(d)(1), the DEA Administrator retains discretion to determine which schedule is most appropriate to carry out treaty obligations. The Order exercises that discretion by selecting Schedule III, the schedule most closely aligned with HHS's August 2023 scheduling recommendation.
Effective April 22, 2026, the Order establishes a bifurcated framework by immediately rescheduling the following into Schedule III: (1) FDA-approved drug products containing marijuana, and (2) marijuana subject to a qualifying state medical marijuana license. All other marijuana, including unlicensed bulk marijuana and marijuana operated under adult-use state programs, remains in Schedule I.
Because state-licensed medical marijuana designated as Schedule III, the punitive provisions of Section 280E of the Internal Revenue Code no longer apply. In its Order, the DOJ explicitly encourages the Secretary of the Treasury to consider providing retrospective 280E relief for prior taxable years in which a state licensee operated under a state medical marijuana license. However, Section 280E still applies to all adult-use cannabis programs, as they remain on Schedule I for now.
"We are nearing the end zone. Today's Order makes clear that the White House and the Attorney General are committed to completing this process — and we are confident that, at the end of this final stage, science and law will win the day. Rescheduling officially corrects a 50-year-old lie—a Schedule I classification rooted in racism, rather than evidence. The devastating harms of this policy have fallen hardest on our most vulnerable communities and patients, which is why this action delivers such immediate, meaningful relief to patients and state-licensed medical operators," says Shawn Hauser, Vicente LLP partner.
"The legal and scientific record is ironclad. Over 43,000 Americans participated in the first public comment period — more than any DEA rulemaking in history — and more than 90% called for Schedule III or greater reform. Today's Order delivers immediate, meaningful relief to patients and state-licensed medical operators. The June 29 hearing is the next critical stage, and the work ahead aims toward completing the full descheduling and building a rational, evidence-based federal framework that harmonizes marijuana and hemp for medical and adult use. We are committed to seeing it through."
What Comes Next
The rescheduling process will proceed as follows:
Effective Immediately-Schedule III Status for Medical Marijuana Businesses: FDA-approved marijuana drug products and qualifying state-licensed medical marijuana are rescheduled to Schedule III effective immediately, with Section 280E tax relief applying prospectively from April 22, 2026.
Expedited DEA Registration for Current State-licensed Medical Cannabis Businesses: The Final Order establishes an expedited DEA registration process for state-licensed medical marijuana manufacturers (which includes cultivators and processors), distributors, and dispensers. Key features include:
State Credentials as Conclusive Evidence: Applicants may submit their existing state medical marijuana licenses as conclusive evidence of state-law authorization.
Mandatory Registration: The DEA Administrator must grant the registration unless doing so would be inconsistent with the public interest or the requirements of the United Nations Single Convention on Narcotic Drugs of 1961, as amended by the 1972 Protocol.
Tied to State Standing: A federal DEA registration will automatically suspend upon the suspension, revocation, or expiration of the operator's underlying state license.
Timeline: The DEA is directed to process applications within six months for those who apply during the initial 60-day window. These early applicants may lawfully continue operating under their state-issued licenses while their DEA review is pending.
New Administrative Hearing for Broader Rescheduling: DEA will hold a new administrative hearing beginning June 29, 2026, to consider broader rescheduling of all marijuana from Schedule I to Schedule III — the proceeding that could extend federal relief to adult-use programs. Interested parties wishing to participate must file a written notice of intention to participate by 11:59 pm ET on May 24, 2026.
Additional Relief: Completion of the June 29 rule-making, if it results in a final rule, would extend Schedule III status and associated Section 280E relief beyond medical licensees to the broader cannabis industry
Economic and Social Impact
According to a comprehensive study and detailed economic analysis released by Vicente LLP and the Minority Cannabis Business Association, projections show that rescheduling and the resulting reform of IRS tax code §280E would result in the creation of 55,000 jobs by 2030, generating as much as $2.7 billion in wages and $5.6 billion in new economic activity.
“The cannabis business community has been waiting on rescheduling for decades. Because of the effects of Internal Revenue Service code §280E, cannabis operators have expended an estimated $2.2 billion in tax overpayments compared to other American industries," said Brian Vicente, founding partner of Vicente LLP, which advises hundreds of cannabis businesses. “Rescheduling will fundamentally change how state-legal cannabis license holders do business, and the degree to which they can prosper.”
Cannabis rescheduling will provide indirect relief to the criminal justice system, although it does not itself overturn any criminal penalties specifically tied to cannabis.
“The failed policy of prohibition was never rooted in science; it was a political tool designed to marginalize specific populations under the guise of public safety,” said Shawn Hauser. “While rescheduling corrects the clinical record, the work is not finished. To truly dismantle the structural failures of the Nixon era, we must move toward de-scheduling, ensuring federal policy finally reflects the scientific and social reality of 2026."
