Louisiana Joins Multi-State Lawsuit to Block DEA Marijuana Rescheduling

Louisiana Joins Multi-State Challenge to Rescheduling Rule

Louisiana became the latest state to formally oppose the DEA's marijuana rescheduling through litigation filed May 28, 2026. Attorney General Liz Murrill's office intervened in an existing lawsuit that seeks to block the Drug Enforcement Administration from moving cannabis to Schedule III. The legal challenge targets the administrative rulemaking process that began in 2023 following a Department of Health and Human Services recommendation.

The complaint argues the DEA failed to satisfy notice-and-comment requirements under the Administrative Procedure Act. It also claims the agency ignored material evidence regarding marijuana's abuse potential. The multi-state coalition contends the reclassification exceeds the agency's statutory authority under 21 U.S.C. § 811.

Tax and Compliance Implications Under Current Schedule I Status

The lawsuit preserves Louisiana's current enforcement framework and maintains federal tax burdens on cannabis operators under IRC § 280E. As long as marijuana remains Schedule I, state-licensed dispensaries and cultivators can't deduct ordinary business expenses on federal returns. That restriction produces effective tax rates exceeding 70 percent for many operators.

Louisiana's medical marijuana program operates under a strict vertical-integration model with nine licensed pharmacies, authorized under La. R.S. 40:1046. Rescheduling to Schedule III would eliminate the 280E restriction, allowing standard business deductions and dramatically reducing federal tax liability. The state's intervention suggests concern that federal liberalization could undermine Louisiana's tightly controlled regulatory structure.

Timeline and Next Steps in Federal Rescheduling Process

The DEA's proposed rescheduling rule remains under administrative review. No final effective date has been set. The agency published a Notice of Proposed Rulemaking in December 2023 and extended the comment period through March 2024 after receiving more than 43,000 public submissions. Legal challenges from both opponents and proponents of rescheduling have created parallel litigation tracks in multiple federal circuits.

For full background on the DEA's rescheduling timeline and multi-state litigation, see the CannIntel topic hub on DEA rescheduling. A consolidated briefing schedule is expected by July 2026 in the D.C. Circuit, where several petitions have been transferred for coordination.