Interim Attorney General Todd Blanche signed an order on April 22, 2026 which reclassifies state-licensed medical marijuana and U.S. Food and Drug Administration (“FDA”) approved drugs containing marijuana be rescheduled as a Schedule III substance under the Controlled Substances Act (“CSA”), the same category as substances like ketamine. The order also applies to marijuana extracts as defined in 21 CFR 1308.11(d)(58) and naturally occurring delta-9-THC derived from the marijuana plant.
The order does not legalize adult-use marijuana, nor does it reschedule adult-use marijuana to a Schedule III. According to the Justice Department, the Drug Enforcement Agency (“DEA”) will hold hearings in June to consider broader rescheduling of marijuana, not just medical programs.
A primary goal for the Trump administration is to strengthen medical research, while preserving its authority and maintaining control. And the shift to Schedule III does mean that medical marijuana researchers would no longer have to go through the onerous process of obtaining a Schedule I license to do that work. That process has long been seen as intensely rigorous, including tight laboratory regulations to acquire and study marijuana. One noted feature of this order was Todd Blanche and the DEA giving credit to the Department of Health and Human Services (“HHS”) recommendation for rescheduling in 2023, furthering supporting its decision to reschedule marijuana.
Here is an overview of the order:
- Outlined Schedule III regulatory requirements for parties who handle exclusively FDA-approved marijuana drugs – i.) DEA registration for persons who handles FDA-approved marijuana drugs; ii.) Schedule III FDA-approved marijuana drugs must be disposed of in accordance with applicable state and federal requirements; iii.) entities that transfer marijuana to patients (e.g. dispensaries) must register with the DEA as practitioners; iv.) content specific prescription must be provided prior to dispensing FDA approved marijuana drugs; v.) DEA registrants must maintain and submit records for FDA-approved marijuana drugs and vi.) DEA registrants must comply with DEA security requirements, labeling and packaging, and inventory requirements.
- DEA provided a definition for “medicinal cannabis,” to exempt state legal medical marijuana from the requirement that medicinal cannabis be FDA approved, while allowing it to market under the Federal Food, Drug, and Cosmetic Act (“FD&C Act”).
- State-licensed medical marijuana entities must register for a DEA license to manufacture, distribute, and dispense marijuana for medical purposes under federal law – applying for a DEA registration by state-licensed medical marijuana entities have historically been prohibited.
- Acknowledgement by the Attorney General that state-licensed medical marijuana programs have the proper infrastructure to meet the objectives of federal registration and recordkeeping requirements – in short, the federal medical marijuana program defers to and functions through state licensure programs.
- There is an expedited process whereby state licensees may submit their existing state credentials as conclusive evidence of state authorization to receive DEA registration for manufacturing, distribution, and dispensaries. The DEA must grant registration unless doing so would be inconsistent with the public interest or under the Single Convention.
- DEA regulations (21 CFR 1312.30) to add FDA-approved marijuana drugs and state-licensed medical marijuana to the list of Schedule III – Schedule V controlled substances that are subject to the import and export permit requirements.
- DEA registrants can apply for and receive import and export licenses – state licensees could potentially access the international market.
- DEA will be an industry business partner – DEA will purchase and sell the marijuana grown by state licensees as required by DEA’s regulations and the Single Convention. Registered manufacturers must store crops in DEA facilities and each registrant must provide DEA information on the cultivation location.
- Researchers registered with the DEA are shielded from civil and criminal liability under the CSA, if marijuana is ascertained from state licensees for scientific research.
- State medical licensees will no longer be subject to Internal Revenue Code 280E, but tax status determination is not provided and a tax expert is recommended to make such a tax determination – retrospective relief from Section 280E liability is being considered by the Secretary of Treasury.
It’s clear that rescheduling marijuana to a Schedule III by the Trump administration is aimed at state-licensed medical cannabis and FDA-approved marijuana drugs, so determining the scope of Schedule III application will be necessary. For example, synthetically derived tetrahydrocannabinol (“THC”) and hemp consumable products exceeding 0.4 mg of THC after November 12, 2026 would not fall within the scope of this order’s rescheduling effects. Also, there will likely be challenges and/or disputes over dual licenses that allow businesses to sell adult-use and medical marijuana, along with tracking 280E liabilities for dual licensees.
While rescheduling did not apply to all forms of marijuana (and by no means is this legalization in any way), this is still a step in the right direction. The hearing on June 29, 2026 The result of will provide more clarity on the breadth of the Schedule III classification on marijuana.
Ritter Spencer Cheng, PLLC (“RSC”) regularly advises clients on healthcare transactions, healthcare regulations and alternative substances (e.g. cannabis) regulatory issues in Texas and throughout the country. The RSC healthcare and alternative substances teams will continue to monitor the progress of this order, while advising clients on regulatory, corporate and transactional matters. Our clients benefit from informed strategic advice, while being counseled on the regulatory burdens associated with healthcare transactions. For questions, reach out to Richard Y. Cheng, Esq., CHC at rcheng@ritterspencercheng.com.
