CANNABIS RESCHEDULING: WHAT CHANGED, WHAT DIDN’T, AND WHAT COMES NEXT

Written by Azure Kwok. Published on April 24th, 2026.

After years of delay, speculation, and political hedging, the federal government has finally made a real move on cannabis. But despite the rush of celebratory headlines, what happened yesterday was not blanket rescheduling for the entire industry.

The U.S. Department of Justice announced that it is immediately placing FDA-approved cannabis products and products subject to a qualifying state-issued medical license into Schedule III, while also launching a new expedited hearing process on June 29 to consider whether cannabis more broadly should move from Schedule I to Schedule III. This would make one of the biggest federal cannabis policy shifts in decades.

What Changed

For years, licensed operators had to function inside a legal contradiction so severe it shaped everything from research access to tax burdens. On one side, states built regulated markets and patient systems. On the other, the federal government continued to classify marijuana as a Schedule I substance with no accepted medical use.

Under DOJ’s announcement yesterday, qualifying state-licensed medical marijuana products and FDA-approved marijuana products are now being treated as Schedule III substances, rather than Schedule I substances.

Millions of Americans already use medical marijuana and CBD products, yet decades of policy neglect have limited the research infrastructure needed to guide doctors and patients. The administration’s position is that moving medical marijuana into Schedule III should help close part of that gap by enabling more rigorous study of safety and efficacy.

One of the clearest implications is taxes. Under federal law, Section 280E has long prevented businesses trafficking in Schedule I or II substances from deducting ordinary business expenses. Moving medical cannabis into Schedule III would eliminate those punitive 280E tax burdens for businesses in the covered category, representing potentially billions in savings. DOJ’s order also encourages Treasury to consider retrospective relief from 280E liability for years in which a business operated under a state medical license.

What Didn’t Change

The DOJ did not announce federal legalization. It did not say every cannabis product in every legal market is now Schedule III. And it did not resolve the adult-use side of the industry with this order. That means the federal-state contradiction is still very much alive. A medical operator may now be standing on firmer federal ground than before. But an adult-use operator may still be living inside much of the same old uncertainty. Many of the deepest harms of prohibition also remain untouched by this order.

What Comes Next

DOJ said the new DEA hearing will begin on June 29, 2026, and that a new notice of hearing is being published in the Federal Register to govern the proceedings and move the rulemaking forward on a faster timetable. DOJ also said it is withdrawing the prior hearing notice from the Biden-era process and terminating those proceedings in order to move more efficiently toward what it calls marijuana’s “complete redesignation.”

At that hearing, the DEA will gather evidence and expert opinion on whether marijuana more broadly should move from Schedule I to Schedule III.