Rescheduling Marijuana: The Latest Updates
Is rescheduling marijuana going to happen sooner than we think?
Possibly so! Over the last few days, federal action on rescheduling cannabis was no longer speculative: it became reality quicker than we thought. Foundations of the industry are changing in real time!
Here’s what you need to know about what just transpired over the last few days.
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For the first time in history, marijuana was officially moved out of the Schedule I category
The US Department of Justice reclassified specific cannabis products from the Schedule I to the Schedule III category. This new move applies only to cannabis drugs that have already been approved by the Food and Drug Administration, as well as state-licensed medical cannabis.
This shift is historic to say the least, because cannabis has been unjustly placed in the Schedule I category for decades. As the strictest category in the Controlled Substances Act, we have long fought for rescheduling at the very least because keeping it in Schedule I means that it had no accepted medical use, and a high abuse potential.
Now that cannabis has been rescheduled, it finally aligns the federal reclassification of cannabis to what most US states, and countless patients, as well as doctors, recognize. Just as important, it also paves the way to future regulatory reforms.
“The Department of Justice is delivering on President Trump’s promise to expand America’s access to medical treatment options,” explained Acting Attorney General Todd Blanche. “This rescheduling action allows for research on the safety and efficacy of this substance, ultimately providing patients with better care and doctors with more reliable information,” he said.
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Rescheduling is restricted to medical marijuana
Take note that the news does not apply to recreational cannabis, which remains a Schedule I substance. In other words, this is not complete legalization.
The policy remains clear, as of the time of writing: medical marijuana will be federally recognized, while recreational cannabis is not. This may be disappointing to some people, but it’s still a major reform.
Another limitation is that it doesn’t apply to synthetic THC, which also stays in the Schedule I category.
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What’s next? We have to wait until June 29, 2026
June 29th is when the Drug Enforcement Administration will be holding an official administrative hearing. This is a huge catalyst, which will decide whether all cannabis will be moved out of Schedule I and into Schedule III.
The hearing will include testimonies from various key government agencies, players in cannabis companies, advocacy groups, medical researchers, and medical experts. It will be an important day that will ultimately decide how wide the scope of rescheduling will be.
After the hearing, a DEA law judge will then issue their findings. They will then make a final decision.
The two possible outcomes include either a complete Schedule III rescheduling or just a partial expansion. The decisions will come into play late this year to early next, most likely, given the legal challenges.
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Immediate tax relief for medical marijuana businesses
Previously, Internal Revenue Code Section 280E prevented cannabis businesses from deducting their operating expenses because cannabis was in the Schedule I category.
With cannabis under Schedule III, this will have tremendous tax benefits for medical marijuana businesses. They can now enjoy the benefits of being taxed like a traditional company in the USA, and can deduct rent, payroll, administrative costs, and marketing from expenses.
As a result, they can enjoy better income and improved cash flow like never before. They will also be able to see an improved financial bottom line. The entire cannabis industry benefits from this, most especially operators who once struggled financially with the burdensome costs of running a cannabis business in this climate. That’s now a thing of the past.
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How will the stock market react?
When the initial news broke, marijuana stocks initially spiked to double digits. Investors began cashing in on the idea of total rescheduling, as well as immediate benefits countrywide. It was, unfortunately, just a rally that was driven by headlines.
But over the next few days, stocks saw a decline of up to 10%. Investors realized that the scope of rescheduling was much narrower than they thought, only focusing on medical cannabis.
Conclusion
Sure, we can expect the rollout to be a bit messy, confusing, or chaotic.
Even if complete federal legalization isn’t happening yet, these reforms are already tangible, and that’s more good news than we’ve seen in the past few years.
While these breakthrough moments aren’t the end of cannabis prohibition just yet, it’s a huge leap forward because it marks a moment in time when cannabis is finally moved out of the most restrictive category for the first time ever.
Rescheduling cannabis to Schedule III isn’t the goal, and our work isn’t done yet. Yet, it finally cracks open a nearly ancient framework and makes way for potentially revolutionary healthcare science grounded in research while also legitimizing cannabis as medicine. We no longer have to wonder when cannabis policy will evolve; it’s now a question of when society and institutions around us will finally catch on.
If the last 5 days mean anything, it’s that cannabis rescheduling is headed towards a direction that finally feels more clear than hazy. The transitions we’ve all been working towards for the last few years are finally picking up traction.
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