May 27, 2026
The Drug Enforcement Administration's broader rescheduling proceeding is now set to begin on June 29, 2026, and the slate of participants who will get to present evidence is largely fixed. May 28 was the deadline for filing a Notice of Intent to Participate by email; May 20 was the deadline for mailed filings. Among the entities that filed: the National Organization for the Reform of Marijuana Laws, Smart Approaches to Marijuana, and MMJ International Holdings — meaning both legalization advocates and prohibition advocates will be at the table when the administrative law judge sets the hearing record.
This is the hearing that decides whether marijuana moves from Schedule I to Schedule III for all uses, not just for the narrow categories already rescheduled in April.
On April 23, 2026, Acting Attorney General Todd Blanche issued an order placing FDA-approved products containing marijuana and marijuana products subject to a qualifying state-issued medical license into Schedule III of the Controlled Substances Act. That partial rescheduling took effect immediately. The same order terminated DEA's prior administrative hearing on broader rescheduling and initiated a new expedited proceeding, with the hearing date set for June 29, 2026. The order was published in the Federal Register on April 28, 2026 (Schedules of Controlled Substances: Rescheduling of Marijuana, 91 FR XXXX).
The "broader rescheduling" hearing covers everything the partial April order did not: state-licensed adult-use marijuana, non-FDA-approved medical marijuana products, and the underlying classification of botanical cannabis itself. The procedural authority for the hearing is 21 CFR Part 1308. DEA must publish a final rule following the hearing record and the administrative law judge's recommended decision, with timing dependent on the volume and complexity of the record.
Who participates matters. The Notice of Intent to Participate establishes which entities can present witnesses, cross-examine others' witnesses, and submit exhibits into the hearing record. NORML has indicated it will present testimony from founder R. Keith Stroup, Deputy Director Paul Armentano, and a witness with direct expertise in state-regulated adult-use systems. SAM, the most prominent prohibitionist organization, will offer the opposing position. MMJ International Holdings is among the cannabis-industry filers.
For operators in the regulated cannabis industry, the broader rescheduling hearing is the proceeding that affects almost every line item on the operating P&L.
Tax exposure under Section 280E of the Internal Revenue Code is the most direct. Schedule III placement removes the 280E prohibition on deducting ordinary and necessary business expenses, which has been one of the largest single drags on cannabis operator margins for the entire history of state-legal commerce. If the broader rescheduling is finalized, operators currently absorbing federal effective tax rates well above 50 percent see immediate relief. The exact timing depends on the final rule's effective date and on how the Internal Revenue Service interprets the transition.
Banking access is the second-largest line. Federal Reserve and FinCEN guidance for cannabis-touching financial services has historically been constrained by the Schedule I status. Schedule III placement does not automatically remove all banking friction — many institutions will still demand FinCEN SAR-MJ filings and may treat cannabis as elevated risk — but it removes the central legal argument banks have used to decline cannabis accounts entirely.
Research access is the third. Schedule III placement under the Controlled Substances Act removes the registration and DEA-approval bottlenecks that have constrained clinical research. Operators with R&D pipelines or who plan to support clinical trials see materially shorter timelines.
The hearing itself does not produce any of these changes. The hearing produces a record. The final rule produces the changes, and only after DEA, OMB, and any judicial review have run their course. Operators should not change tax positions or banking strategies until the final rule is published, but the period between final-rule publication and effective date is short enough that preparation matters now.
It is worth being precise about what the partial April rescheduling did and did not do, because the language has been used loosely in the trade press. The April 23 order moved FDA-approved marijuana products and state-licensed medical marijuana into Schedule III. It did not move state-licensed adult-use marijuana into Schedule III. It did not move the underlying plant into Schedule III. Adult-use cannabis remains classified as a Schedule I controlled substance under federal law as of the date of this article. The June 29 hearing is the proceeding that addresses everything the April order left in Schedule I.
States are responding unevenly to the partial rescheduling. California's Department of Cannabis Control issued an emergency rulemaking earlier this month to let combined medicinal-and-adult-use licensees split into separate licenses on an expedited basis, positioning them to file for DEA registration during the narrow federal application window that follows the April order. New York's Office of Cannabis Management has not posted a parallel notice; Massachusetts is in the middle of a broader Cannabis Control Commission modernization bill. Operators with multi-state footprints should expect this divergence to widen between now and the broader-rescheduling final rule.
Three procedural dates anchor the next phase:
Litigation challenging the April 23 order is already pending. The procedural overlap between the pending litigation and the broader-rescheduling hearing is one of the open variables operators should watch with counsel.
This article is informational and does not constitute legal advice. Cannabis operators considering changes to their tax position, banking relationships, or licensing structure in anticipation of broader rescheduling should consult with cannabis regulatory counsel about the specifics of their situation.
The Drug Enforcement Administration's broader rescheduling proceeding is now set to begin on June 29, 2026, and the slate of participants who will get to present evidence is largely fixed. May 28 was the deadline for filing a Notice of Intent to Participate by email; May 20 was the deadline for mailed filings. Among the entities that filed: the National Organization for the Reform of Marijuana Laws, Smart Approaches to Marijuana, and MMJ International Holdings — meaning both legalization advocates and prohibition advocates will be at the table when the administrative law judge sets the hearing record.
This is the hearing that decides whether marijuana moves from Schedule I to Schedule III for all uses, not just for the narrow categories already rescheduled in April.
On April 23, 2026, Acting Attorney General Todd Blanche issued an order placing FDA-approved products containing marijuana and marijuana products subject to a qualifying state-issued medical license into Schedule III of the Controlled Substances Act. That partial rescheduling took effect immediately. The same order terminated DEA's prior administrative hearing on broader rescheduling and initiated a new expedited proceeding, with the hearing date set for June 29, 2026. The order was published in the Federal Register on April 28, 2026 (Schedules of Controlled Substances: Rescheduling of Marijuana, 91 FR XXXX).
The "broader rescheduling" hearing covers everything the partial April order did not: state-licensed adult-use marijuana, non-FDA-approved medical marijuana products, and the underlying classification of botanical cannabis itself. The procedural authority for the hearing is 21 CFR Part 1308. DEA must publish a final rule following the hearing record and the administrative law judge's recommended decision, with timing dependent on the volume and complexity of the record.
Who participates matters. The Notice of Intent to Participate establishes which entities can present witnesses, cross-examine others' witnesses, and submit exhibits into the hearing record. NORML has indicated it will present testimony from founder R. Keith Stroup, Deputy Director Paul Armentano, and a witness with direct expertise in state-regulated adult-use systems. SAM, the most prominent prohibitionist organization, will offer the opposing position. MMJ International Holdings is among the cannabis-industry filers.
For operators in the regulated cannabis industry, the broader rescheduling hearing is the proceeding that affects almost every line item on the operating P&L.
Tax exposure under Section 280E of the Internal Revenue Code is the most direct. Schedule III placement removes the 280E prohibition on deducting ordinary and necessary business expenses, which has been one of the largest single drags on cannabis operator margins for the entire history of state-legal commerce. If the broader rescheduling is finalized, operators currently absorbing federal effective tax rates well above 50 percent see immediate relief. The exact timing depends on the final rule's effective date and on how the Internal Revenue Service interprets the transition.
Banking access is the second-largest line. Federal Reserve and FinCEN guidance for cannabis-touching financial services has historically been constrained by the Schedule I status. Schedule III placement does not automatically remove all banking friction — many institutions will still demand FinCEN SAR-MJ filings and may treat cannabis as elevated risk — but it removes the central legal argument banks have used to decline cannabis accounts entirely.
Research access is the third. Schedule III placement under the Controlled Substances Act removes the registration and DEA-approval bottlenecks that have constrained clinical research. Operators with R&D pipelines or who plan to support clinical trials see materially shorter timelines.
The hearing itself does not produce any of these changes. The hearing produces a record. The final rule produces the changes, and only after DEA, OMB, and any judicial review have run their course. Operators should not change tax positions or banking strategies until the final rule is published, but the period between final-rule publication and effective date is short enough that preparation matters now.
It is worth being precise about what the partial April rescheduling did and did not do, because the language has been used loosely in the trade press. The April 23 order moved FDA-approved marijuana products and state-licensed medical marijuana into Schedule III. It did not move state-licensed adult-use marijuana into Schedule III. It did not move the underlying plant into Schedule III. Adult-use cannabis remains classified as a Schedule I controlled substance under federal law as of the date of this article. The June 29 hearing is the proceeding that addresses everything the April order left in Schedule I.
States are responding unevenly to the partial rescheduling. California's Department of Cannabis Control issued an emergency rulemaking earlier this month to let combined medicinal-and-adult-use licensees split into separate licenses on an expedited basis, positioning them to file for DEA registration during the narrow federal application window that follows the April order. New York's Office of Cannabis Management has not posted a parallel notice; Massachusetts is in the middle of a broader Cannabis Control Commission modernization bill. Operators with multi-state footprints should expect this divergence to widen between now and the broader-rescheduling final rule.
Three procedural dates anchor the next phase:
Litigation challenging the April 23 order is already pending. The procedural overlap between the pending litigation and the broader-rescheduling hearing is one of the open variables operators should watch with counsel.
This article is informational and does not constitute legal advice. Cannabis operators considering changes to their tax position, banking relationships, or licensing structure in anticipation of broader rescheduling should consult with cannabis regulatory counsel about the specifics of their situation.
