The DEA’s marijuana rescheduling is partway done. As of April 28, 2026, two categories of cannabis — FDA-approved drug products containing marijuana and products regulated under a state medical marijuana license — sit in Schedule III of the Controlled Substances Act. Everything else remains in Schedule I pending a formal administrative hearing that began June 29, 2026, at DEA headquarters in Arlington, Virginia, and is scheduled to run through July 15.1DEA. DEA Hearing on Proposed Marijuana Rescheduling Begins June 29
What Already Moved to Schedule III
On April 23, 2026, Acting Attorney General Todd Blanche issued a final order placing two narrow categories of marijuana into Schedule III: FDA-approved drug products containing marijuana, and marijuana products regulated under a state medical marijuana license.2DOJ. Justice Department Places FDA-Approved Marijuana Products and Products Containing Marijuana in Schedule III The order took effect five days later.3Federal Register. Schedules of Controlled Substances: Rescheduling of FDA Approved Products Containing Marijuana
The rule leaves unlicensed bulk marijuana, marijuana extracts, and any cannabis product not covered by an FDA approval or a state medical license in Schedule I.3Federal Register. Schedules of Controlled Substances: Rescheduling of FDA Approved Products Containing Marijuana Recreational and adult-use cannabis, even where legal under state law, is not covered.
Blanche bypassed the usual notice-and-comment process by invoking 21 U.S.C. § 811(d)(1), which lets the Attorney General place a substance in whatever schedule is “most appropriate” to satisfy obligations under the 1961 United Nations Single Convention on Narcotic Drugs, without the scientific findings or formal hearing normally required.3Federal Register. Schedules of Controlled Substances: Rescheduling of FDA Approved Products Containing Marijuana That legal theory is now the subject of two consolidated petitions in the D.C. Circuit.
The June 2026 Hearing on the Rest of Marijuana
Alongside the immediate rule, Blanche withdrew the earlier Biden-era hearing notice and issued a new one covering the broader question: whether all marijuana should move from Schedule I to Schedule III.4Federal Register. Schedules of Controlled Substances: Rescheduling of Marijuana; Withdrawal The evidentiary hearing began June 29, 2026, and is scheduled to run through July 15 at the DEA Hearing Facility in Arlington, Virginia.5Federal Register. Schedules of Controlled Substances: Rescheduling of Marijuana It is open to the public and credentialed media in limited capacity, with no recording allowed inside the courtroom.1DEA. DEA Hearing on Proposed Marijuana Rescheduling Begins June 29
Under the Controlled Substances Act, rescheduling requires formal rulemaking “on the record after opportunity for a hearing.”6Yale Law Journal. Separation of Drug Scheduling Powers An Administrative Law Judge presides, takes testimony, and issues a recommended decision with findings of fact and conclusions of law. That recommendation goes to the DEA Administrator, currently Terrance Cole, who makes the final agency decision, which is then published in the Federal Register.7DEA. Administrative Law Judges The ALJ has been directed to keep the proceedings on an expedited schedule.5Federal Register. Schedules of Controlled Substances: Rescheduling of Marijuana
In the earlier, terminated round of proceedings, more than 160 individuals and entities sought to participate and 25 were designated to testify; anyone who wanted a role in the new hearing had to refile written notice by May 28, 2026.5Federal Register. Schedules of Controlled Substances: Rescheduling of Marijuana
What Schedule III Actually Changes
Schedule I substances are classified as having no accepted medical use and a high potential for abuse. Schedule III substances are defined as having an accepted medical use and moderate-to-low potential for dependence.8Pharmacy Times. Marijuana Reclassified to Schedule 3: Clinical Research and Coverage Implications The practical consequences fall in three places.
Taxes
Section 280E of the Internal Revenue Code prohibits businesses trafficking in Schedule I or II substances from deducting ordinary business expenses. Cannabis operators have reported effective tax rates as high as 70% to 90% because of it.9Cannabis Science and Technology. SAM Poll Reveals Voter Concerns on Cannabis Rescheduling On April 23, 2026, Treasury and the IRS announced they intend to issue guidance clarifying that 280E no longer applies to activities covered by the new Schedule III classification, generally for the full taxable year that includes the rule’s effective date.10Treasury Department. Treasury and IRS Announce Guidance on Rescheduling The relief is not retroactive. Unpaid tax liabilities from the Schedule I years remain due.
Research
Schedule III streamlines DEA registration for researchers, reduces the administrative burden of obtaining research-grade marijuana, and is expected to make federally approved clinical trials more feasible.8Pharmacy Times. Marijuana Reclassified to Schedule 3: Clinical Research and Coverage Implications Expanding research was the stated primary goal of the executive order that restarted the process.
Registration for State-Licensed Operators
The April 2026 final rule sets up an expedited DEA registration path for entities already holding a state medical marijuana license. Operators can submit their state credentials as evidence of authorization, and applications filed within 60 days of the rule’s publication must be processed within six months. Operators who apply during that window may continue operating under their state license while the DEA review is pending.11DOJ. Final Rule on Rescheduling of Marijuana
To satisfy international treaty obligations, registered manufacturers must establish a nominal price for their crops, and the DEA conducts a purchase-and-resale transaction at that price plus an administrative fee. Federal registration is automatically suspended if the underlying state license lapses or is revoked.11DOJ. Final Rule on Rescheduling of Marijuana
What Rescheduling Does Not Do
Moving marijuana to Schedule III does not legalize it. Possession and use outside the scope of an FDA-approved product or a state medical program remain federal crimes. The change does not expunge or address past convictions. It does not establish a comprehensive national regulatory framework for consumer safety or worker protections.12Drug Policy Alliance. DPA Emphasizes Schedule III Would Continue Marijuana Criminalization
It also does not solve the banking problem. Rescheduling does not change federal anti-money-laundering statutes, and the SAFER Banking Act has not been enacted. A bipartisan coalition of 32 state attorneys general wrote to congressional leaders in July 2025 urging passage, calling the lack of banking access a “considerable safety issue for the public.”13American Bankers Association. State Attorneys General Urge Congress to Pass Cannabis Banking Bill
Rescheduling is also distinct from descheduling, which would remove marijuana from the Controlled Substances Act entirely, and from full federal legalization, which would build a national commercial framework. Congress can bypass the DEA process and directly reschedule, deschedule, or legalize through new legislation.14Ohio State University Moritz College of Law. Federal Marijuana Rescheduling
The Court Challenges That Could Unwind the April Rule
Two petitions for review are now consolidated in the U.S. Court of Appeals for the D.C. Circuit.
Smart Approaches to Marijuana (SAM), led by Kevin Sabet, and the National Drug and Alcohol Screening Association filed on May 4, 2026. SAM argues that the raw marijuana plant has never been approved for medical use by the FDA, that rescheduling will normalize the drug and increase youth use, and that the resulting tax relief amounts to a “$2 billion annually” windfall for dispensaries. SAM has also warned that Schedule III could prevent the federal government from mandating drug testing for safety-sensitive workers — pilots, truck drivers, locomotive engineers — because HHS-certified laboratories are not authorized to test for Schedule III substances.15NAADAC. SAM Coalition Letter Against Marijuana Rescheduling The petition was signed by attorneys at Torridon Law PLLC, a firm partnered by former Attorney General William Barr.16Marijuana Moment. State Attorneys General File Lawsuit to Block Trump Administration’s Marijuana Rescheduling Move
Nebraska, Indiana, and Louisiana filed a separate petition on May 22, 2026, naming Acting Attorney General Blanche and Administrator Cole as respondents. The states argue the rule violates the Administrative Procedure Act, exceeds authority under the Controlled Substances Act, and is “arbitrary, capricious, an abuse of discretion, and not in accordance with law.”17Cannabis Business Times. 3 States Challenge Trump DOJ’s Schedule III Cannabis Rule The D.C. Circuit consolidated the two challenges on May 27, 2026.16Marijuana Moment. State Attorneys General File Lawsuit to Block Trump Administration’s Marijuana Rescheduling Move As of late June 2026, no court had issued an injunction or stay.
How the Process Got Here
The current push began in October 2022, when President Biden asked HHS and the Attorney General to review marijuana’s federal scheduling. HHS completed an eight-factor scientific and medical evaluation in August 2023 and recommended a move to Schedule III.18White House. Increasing Medical Marijuana and Cannabidiol Research The FDA analysis concluded that marijuana has a lower potential for abuse than drugs in Schedules I and II, has a “currently accepted medical use” supported by credible scientific evidence, and that its abuse may lead to moderate or low physical dependence or high psychological dependence.19DEA. HHS Recommendation on Marijuana Scheduling The National Institute on Drug Abuse concurred.
In May 2024, the Department of Justice published a Notice of Proposed Rulemaking to move marijuana to Schedule III. The proposal drew nearly 43,000 public comments.20Regulations.gov. DEA-2024-0059: Rescheduling of Marijuana A hearing was scheduled for December 2, 2024, but procedural disputes stalled it; the Chief ALJ stayed the hearing on January 13, 2025, after granting an interlocutory appeal, and the proceedings were later terminated.4Federal Register. Schedules of Controlled Substances: Rescheduling of Marijuana; Withdrawal
On December 18, 2025, President Trump signed Executive Order 14370, titled “Increasing Medical Marijuana and Cannabidiol Research,” directing the Attorney General to complete the rulemaking in the “most expeditious manner.” The order also directed officials to work with Congress on updating the statutory definition of hemp-derived cannabinoid products, including THC content limits per serving and per container.18White House. Increasing Medical Marijuana and Cannabidiol Research Administration officials emphasized what the order did not do: it did not legalize marijuana, did not sanction recreational use, and did not change existing criminal penalties.21The Hill. Marijuana Rescheduling Trump Executive Order
The April 2026 actions followed from that order, and the two tracks now sit in parallel: an immediate rule already in effect for a narrow slice of the market, and a formal hearing whose outcome will determine whether the reclassification extends to everything else. The ALJ will issue a recommended decision after the hearing closes, no later than July 15, 2026, followed by a final ruling from Administrator Cole. How far federal marijuana policy actually shifts depends on that decision and on what the D.C. Circuit does with the pending challenges.