DOJ Order Clarifies Tribal Cannabis Programs Under Schedule III

DOJ Order Preserves Tribal Prosecutorial Discretion Framework

The May 28 order confirms that tribal cannabis programs operating under the 2014 Cole Memo principles and the 2017 tribal guidance will retain their prosecutorial-discretion protections after rescheduling takes effect. The directive applies to tribes that have established regulatory frameworks meeting the eight enforcement priorities outlined in the original Cole Memo, including preventing distribution to minors and preventing diversion to states where cannabis remains illegal.

The order was issued by the Office of the Deputy Attorney General and distributed to all United States Attorneys' offices with jurisdiction over tribal lands. Federal prosecutors should continue applying the same enforcement-priority analysis to tribal cannabis operations that's governed prosecutorial decisions since 2014. That holds even after cannabis moves to Schedule III.

Schedule III Transition Creates New Compliance Questions

Rescheduling will subject tribal cannabis operators to Drug Enforcement Administration registration requirements under 21 U.S.C. § 823, creating potential conflicts with existing tribal regulatory structures. The DOJ order doesn't resolve whether tribes will be required to obtain federal DEA registrations or whether tribal sovereignty principles will permit tribes to operate under their own regulatory frameworks without federal registration.

Vicente LLP's analysis notes that the order directs the DEA to issue supplemental guidance within 90 days addressing registration procedures for tribal operators. Until that guidance is published, tribal programs face uncertainty. Compliance obligations under the rescheduled framework remain unclear.

Tribal Sovereignty Concerns Remain Unresolved

The order doesn't address whether rescheduling will affect the jurisdictional balance between federal, state, and tribal authority over cannabis commerce on tribal lands. Tribes operating under the 2017 tribal guidance have relied on federal prosecutorial discretion rather than explicit statutory authorization. Their programs remain vulnerable to policy shifts.

The National Congress of American Indians has advocated for statutory protections that would place tribal cannabis programs on equal footing with state-licensed operations. The DOJ order maintains the status quo of policy-based discretion rather than codifying tribal authority.

Tax Treatment Under Section 280E Unchanged

The order confirms that tribal cannabis operators will remain subject to Internal Revenue Code Section 280E until Congress amends the statute, regardless of rescheduling status. Section 280E prohibits businesses trafficking in Schedule I or Schedule II controlled substances from deducting ordinary business expenses, but the provision applies to all federally illegal substances, not only scheduled drugs.

Cannabis will remain federally illegal under the Controlled Substances Act even after rescheduling to Schedule III, so tribal operators will continue to face the same tax burdens as state-licensed operators until Congress acts. The DOJ order notes that the Department of the Treasury hasn't issued guidance suggesting any change to 280E enforcement posture.

Interstate Commerce Restrictions Persist

The order reaffirms that tribal cannabis operations may not engage in interstate commerce, even between tribes in different states, without violating the Controlled Substances Act. This restriction applies regardless of whether both tribes have established regulatory programs meeting federal enforcement priorities.

Tribal operators have sought clarity on whether commerce between tribal nations should be treated as intrastate or interstate for purposes of federal enforcement. The DOJ order doesn't create any exception to the interstate-commerce prohibition. U.S. Attorneys should continue treating cross-border tribal transactions as potential enforcement priorities.

Next Steps for Tribal Operators

The order instructs tribes with existing cannabis programs to monitor forthcoming DEA registration guidance and to consult with U.S. Attorneys' offices in their districts before making operational changes in response to rescheduling. Tribes considering new cannabis programs are advised to establish regulatory frameworks that align with the eight Cole Memo priorities before initiating operations.

For comprehensive background on federal tribal cannabis policy, see the CannIntel topic hub on Tribal Cannabis Programs. The DEA's supplemental guidance is expected by late August 2026, according to the order's 90-day timeline.