News

D.C. Circuit Denies Stay of Schedule III Medical-Marijuana Order: What No. 26-1106 Does and Does Not Decide

A three-judge panel refused to pause the Attorney General's April order moving state-licensed medical marijuana to Schedule III. The merits fight now runs on a consolidated, joint-brief track the court itself set in motion — likely a year of status quo before any ruling on validity.

Compliance Carl

7

Min Read

Published

October 4, 2026

Updated on:

October 3, 2026

Editorial illustration of a federal appeals court building with a docket sheet, representing the D.C. Circuit's denial of a stay of the Schedule III marijuana order

On September 9, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit refused to pause the Attorney General's April order moving state-licensed medical marijuana and FDA-approved marijuana drug products from Schedule I to Schedule III. The two-page per curiam order in SAM, Inc. v. U.S. Department of Justice, No. 26-1106 (consolidated with Nos. 26-1130 and 26-1136), before Judges Wilkins, Walker and Garcia, disposes of the stay in one sentence: "Petitioners have not satisfied the stringent requirements for a stay pending court review," citing Nken v. Holder, 556 U.S. 418, 434 (2009). The order stays in force, and the same two pages set the merits case on a joint-brief track.

The mechanism: what the April order did, and what the court left standing

The order under review, the April rescheduling order, is Attorney General Order No. 6754-2026, signed April 22 by Acting Attorney General Todd Blanche and effective April 28 at 91 FR 22714. It places marijuana, marijuana extract and naturally derived delta-9-THC in Schedule III only "in a U.S. Food and Drug Administration approved product or subject to a state medical marijuana license." Everything else "remains a schedule I controlled substance," which is why adult-use operators are still Schedule I pending DEA-1362.

The legal hook is 21 U.S.C. 811(d)(1), the treaty clause, which lets the Attorney General schedule "without regard to" the findings and hearing procedures in sections 811(a) and (b) when control is required by the Single Convention. The same rule built an expedited DEA registration path under 21 CFR 1301.13 (mechanics in the table below).

The June 9 stay motion by the National Drug and Alcohol Screening Association (NDASA) and MMJ International Holdings argued the order rests on a reading of section 811(d) the D.C. Circuit rejected in NORML v. DEA, 559 F.2d 735 (D.C. Cir. 1977): the treaty bypass cannot be used to choose between two treaty-compliant schedules (we covered the June stay motion and its 280E stakes in June).

Beyond the denial, the order refuses MedPharma Iowa and Tri-Mountain Pure leave to intervene because they "fail to demonstrate that their interests in this litigation are not adequately represented by existing parties," admits them and Cannabis Industry Attorneys as amici, and, "on the court's own motion," orders proposed briefing formats within 30 days. The court "looks with extreme disfavor on repetitious submissions and will, where appropriate, require a joint brief of aligned parties with total words not to exceed the standard allotment for a single brief."

Why it is not settled

A stay denial is not a merits ruling. Under Nken, a movant must show likely success on the merits, irreparable harm, and that the equities and public interest favor a stay. The panel did not say which factor failed; nothing in the order endorses the government's treaty-clause theory or forecloses vacatur.

The briefing instruction, not the denial, is the operative fact for planning. Three petitions with three theories, from the drug-testing and prohibition groups, the pharmaceutical developer, and the state attorneys general, will be argued as one case on one clock, possibly in a single brief. The court has set no dates, but on its ordinary calendar a merits decision before 2027 is unlikely, so the April order will have governed for roughly a year before any court rules on it. Rehearing en banc or a Supreme Court petition remain open to the loser. The wire fact is a denied stay; the planning fact is a year of status quo with vacatur still possible at the end.

What operators should do this week

Registration. Applications under 21 CFR 1301.13(k) are unaffected; keep them current. The failure mode is on the state side: federal registration suspends automatically when the state license lapses, so a late renewal now has a federal consequence.
280E. Treasury's April 23 release says rescheduling "generally removes section 280E as a bar" for businesses no longer trafficking in Schedule I or II substances, with apportionment for mixed businesses and a full-taxable-year transition rule. That guidance has not issued, and the order behind it is under review. Keep the reserve and work through 280E under Schedule III before booking relief; the failure mode is full-year relief on a combined license without apportionment.
Inventory and labels. The trigger is "subject to a state medical marijuana license." Adult-use product on the same shelf is Schedule I, so track lots by license pathway; single-license states are an open question the House letter below raises. Registrants may rely on state labeling and packaging rules, but the federal warning label under 21 U.S.C. 825(c) still applies.
Contracts. The Sixth Circuit held September 10 in Hello Farms Licensing MI v. GR Vending MI that the April rule "didn't purport to have retroactive effect" and that a medical-only deal done today without DEA registration would still be federally illegal. Schedule III does not cure legacy paper.
Banking. A stay denial does not change a bank's risk analysis; see how banking and payments change under Schedule III.
Talk to your counsel before changing a tax position, a contract or a registration filing on the strength of a stay denial.

Jurisdictional context

Two federal tracks, two populations. The D.C. Circuit case tests whether the Attorney General could reschedule state-medical and FDA-approved marijuana by order. DEA-1362 asks whether all marijuana should move to Schedule III through formal on-the-record proceedings; that hearing closed July 15 and, as of September 16, no recommended decision has issued. See the post-hearing briefs in DEA-1362 and what happens after the ALJ record closed. NDASA, SAM, Nebraska and Indiana are in both proceedings: one policy, two forums, two standards of review.

D.C. Circuit versus Sixth Circuit, same week. The D.C. Circuit left the order in force on September 9. The next day the Sixth Circuit (Michigan, Ohio, Kentucky, Tennessee) reversed a $31.8 million jury award because "Federal courts can't enforce contract claims founded on an agreement to purchase marijuana illegally," reading the April rule as prospective and registration-dependent. The protection runs forward only, and only for registered activity.

States on both sides. Nebraska and Indiana are petitioners against the order, per the May 22 petition obtained by Cannabis Business Times (Louisiana withdrew May 29). Yet on September 4 the Nebraska Supreme Court rejected the Attorney General's challenge to the state's voter-approved medical marijuana measures in Kuehn v. Evnen; his office said it "will follow the law as it stands." One state, two positions.

What's next

Sept. 25, 2026: Joint FDA–EMA workshop on botanical drug products; see FDA's botanical-drug docket.
Sept. 30, 2026: Response date four House members requested in an August 18 letter on 280E for dual licensees, home cultivation and unregistered operators; a request, not a deadline.
On or about Oct. 9, 2026: Proposed briefing formats due in No. 26-1106 (30 days from September 9).
Nov. 3, 2026: Comments close on FDA's botanical drug products request for information, Docket FDA-2026-N-9550.
No date: Recommended decision of the administrative law judge in DEA-1362.

Comparison table: the two federal rescheduling tracks

Item	April order (under review in the D.C. Circuit)	DEA-1362 rulemaking
Instrument	AG Order No. 6754-2026; final rule at 91 FR 22714 (FR Doc. 2026-08176), signed April 22, effective April 28, 2026	Notice of proposed rulemaking, 89 FR 44597 (May 21, 2024); new notice of hearing, 91 FR 22777 (April 28, 2026)
Who it covers	Marijuana, marijuana extract and naturally derived delta-9-THC in an FDA-approved drug product or subject to a state medical marijuana license	All marijuana, proposed transfer from Schedule I to Schedule III
Legal basis	21 U.S.C. 811(d)(1) treaty clause; no notice and comment or HHS referral required, per DOJ	21 U.S.C. 811(a)–(b) formal rulemaking on the record, built on HHS's 2023 recommendation
Registration mechanics	Expedited path under 21 CFR 1301.13: state license is conclusive evidence of state authorization; applications filed within 60 days of publication to be processed within six months; early applicants may operate under state license during review; federal registration suspends automatically if the state license is suspended, revoked or expires	None yet; any registration framework would come with a final rule
Who challenged or participates	Petitioners: SAM and NDASA (No. 26-1106); MMJ International Holdings and affiliates with co-petitioners; Nebraska and Indiana (Louisiana withdrew). Amici: MedPharma Iowa, Tri-Mountain Pure, Cannabis Industry Attorneys	Seven designated interested persons, including NDASA, SAM, the Tennessee Bureau of Investigation and the States of Nebraska, Idaho, Indiana and Louisiana (Louisiana later withdrew), plus DEA
Forum	U.S. Court of Appeals for the D.C. Circuit; panel of Judges Wilkins, Walker and Garcia	DEA administrative hearing, Chief ALJ Derek C. Julius, Hearing Docket No. 26-96
Status as of Sept. 16, 2026	Stay denied Sept. 9; order in force; proposed briefing formats due within 30 days; no briefing schedule or argument date	Hearing held June 29–July 15; post-hearing briefs due Aug. 17; corrected transcript posted; recommended decision pending
Next dated event	On or about Oct. 9, 2026: proposed briefing formats	None set
If the government loses	Vacatur would return covered medical marijuana to Schedule I and unwind the registration and 280E positions built on the order	Adult-use-only marijuana stays in Schedule I unless a final rule issues
What operators can rely on today	Schedule III for covered medical activity, prospective and registration-dependent	Nothing yet

FAQ

Did the D.C. Circuit overturn marijuana rescheduling?

No. On September 9, 2026, the court denied a motion to pause the April order while the petitions for review are heard; it did not rule on whether the order is lawful.

Is medical marijuana still Schedule III?

Yes. Marijuana, marijuana extract and naturally derived delta-9-THC in an FDA-approved drug product or subject to a state medical marijuana license remain in Schedule III under 91 FR 22714 while the case proceeds, prospectively and tied to DEA registration.

Does the ruling apply to recreational cannabis?

No. Adult-use-only marijuana remains in Schedule I. Its status depends on the separate DEA-1362 rulemaking, where the hearing closed July 15, 2026, and the administrative law judge's recommended decision has no date.

When will the D.C. Circuit decide the merits?

No date has been set. Proposed briefing formats are due within 30 days of September 9, 2026 (about October 9); a briefing schedule, argument and decision follow, and a decision before 2027 is unlikely.

Who is challenging the Schedule III order?

Three consolidated petitions: Smart Approaches to Marijuana and the National Drug and Alcohol Screening Association (No. 26-1106); MMJ International Holdings and affiliates with co-petitioners; and the attorneys general of Nebraska and Indiana (Louisiana withdrew).

Sources

This is regulatory journalism, not legal advice — talk to your counsel.

Compliance Carl

Senior Compliance Editor

Compliance Carl is the senior editor desk at CannabisRegulations.ai. Carl writes about federal scheduling, state enforcement, carrier policy, and the operational compliance questions cannabis and hemp businesses actually face.