Federal Marijuana Legalization 2026: Status, Timeline & Policy Outlook

Executive Summary

Federal marijuana legalization in 2026 remains uncertain, with rescheduling from Schedule I to Schedule III under active consideration by the Drug Enforcement Administration while full descheduling faces significant legislative and political obstacles. As of May 2026, the United States stands at a crossroads in cannabis policy, with the DEA's proposed rulemaking to move marijuana to Schedule III of the Controlled Substances Act still pending final action after more than two years of administrative review. The rescheduling process, initiated by President Biden's directive in October 2022 and formally proposed through a Notice of Proposed Rulemaking in May 2024, would represent the most significant federal policy shift since the Controlled Substances Act of 1970 classified cannabis as a Schedule I substance with no accepted medical use.

Full legalization—removing marijuana entirely from the Controlled Substances Act—would require Congressional action through legislation such as the Cannabis Administration and Opportunity Act or the SAFE Banking Act, neither of which has secured sufficient bipartisan support for passage in the current political environment. Meanwhile, 38 states and the District of Columbia have enacted medical marijuana programs, and 24 states have legalized adult-use cannabis, creating a complex patchwork of state-legal markets operating in violation of federal law. The tension between state legalization and federal prohibition continues to impact banking access, tax treatment under Internal Revenue Code Section 280E, interstate commerce restrictions, and criminal justice outcomes for the estimated 2.8 million Americans employed in state-legal cannabis businesses.

Why Federal Marijuana Policy in 2026 Matters

The federal classification of marijuana affects $33.6 billion in annual state-legal cannabis sales, 13,000 licensed businesses, criminal justice outcomes for approximately 350,000 annual marijuana arrests, and medical access for 6.7 million registered patients nationwide. The current Schedule I status under 21 U.S.C. § 812 creates cascading consequences across multiple sectors of American society, from healthcare and criminal justice to banking and taxation.

For patients, federal prohibition limits research into marijuana's therapeutic applications, prevents physicians at Veterans Affairs facilities from recommending cannabis, and creates barriers to insurance coverage for medical marijuana treatments. The National Institutes of Health reported in 2025 that fewer than 200 clinical trials involving cannabis compounds have received federal approval since 1970, compared to more than 50,000 trials for other Schedule II-IV controlled substances during the same period.

For businesses, the Internal Revenue Code Section 280E prohibits state-legal cannabis companies from deducting ordinary business expenses on federal tax returns, resulting in effective tax rates between 40% and 70%. According to the Marijuana Policy Project, this tax burden cost the industry an estimated $1.8 billion in 2025 alone. The lack of federal legalization also prevents cannabis businesses from accessing traditional banking services, forcing many to operate on a cash basis and creating public safety concerns.

For criminal justice, marijuana arrests continue despite state-level reforms. The FBI's Uniform Crime Report for 2025 documented 352,000 marijuana-related arrests, with 89% for possession offenses. Communities of color remain disproportionately affected, with Black Americans arrested for marijuana possession at 3.64 times the rate of white Americans despite similar usage rates, according to the American Civil Liberties Union.

Background and History: The Path to 2026

The federal prohibition of marijuana has evolved through nearly a century of legislation, international treaties, and shifting scientific understanding, culminating in the current rescheduling debate that began with President Biden's 2022 directive.

The Marihuana Tax Act of 1937 and Early Federal Control

Federal marijuana regulation began with the Marihuana Tax Act of 1937, which imposed registration requirements and transfer taxes on cannabis transactions. The Act effectively criminalized marijuana possession and sale without explicitly prohibiting the substance. Harry Anslinger, Commissioner of the Federal Bureau of Narcotics, led the campaign for the legislation, testifying before Congress that marijuana caused insanity and violence. The American Medical Association opposed the Act, arguing it would impede medical research and therapeutic use.

The Supreme Court struck down the Marihuana Tax Act in Leary v. United States, 395 U.S. 6 (1969), ruling that the Act's registration requirement violated Fifth Amendment protections against self-incrimination. This decision created a brief period without federal marijuana prohibition until Congress passed replacement legislation.

The Controlled Substances Act of 1970

Congress enacted the Controlled Substances Act as Title II of the Comprehensive Drug Abuse Prevention and Control Act of 1970, establishing the five-schedule classification system still in use today. The Act placed marijuana in Schedule I, defined as substances with high potential for abuse, no currently accepted medical use, and lack of accepted safety for use under medical supervision. Other Schedule I substances include heroin, LSD, and peyote.

The CSA assigned authority to the Attorney General, acting through the DEA, to add, remove, or reschedule substances based on eight factors enumerated in 21 U.S.C. § 811(c), including actual or relative potential for abuse, scientific evidence of pharmacological effect, current scientific knowledge, history and pattern of abuse, scope and significance of abuse, and risk to public health. The Act also required consideration of international treaty obligations, particularly the Single Convention on Narcotic Drugs of 1961.

The Shafer Commission and Nixon's Rejection

The CSA directed the National Commission on Marihuana and Drug Abuse, chaired by former Pennsylvania Governor Raymond Shafer, to study marijuana and make recommendations. The Shafer Commission released its report "Marihuana: A Signal of Misunderstanding" in March 1972, recommending decriminalization of marijuana possession for personal use and elimination of criminal penalties for casual distribution of small amounts.

President Richard Nixon rejected the Commission's findings. White House recordings later revealed Nixon's personal opposition to marijuana decriminalization, and former Nixon domestic policy advisor John Ehrlichman said in a 1994 interview that the administration's drug war targeted political opponents, though the accuracy of this account remains disputed.

State Medical Marijuana Programs Begin: 1996-2012

California voters approved Proposition 215, the Compassionate Use Act, in November 1996, becoming the first state to legalize medical marijuana. The initiative allowed patients with a physician's recommendation to possess and cultivate cannabis for medical purposes. Alaska, Oregon, and Washington followed with medical marijuana laws in 1998.

The federal government challenged state medical marijuana laws in Gonzales v. Raich, 545 U.S. 1 (2005). The Supreme Court ruled 6-3 that the Commerce Clause granted Congress authority to prohibit cultivation and possession of marijuana even for medical use under state law, as such activity substantially affected interstate commerce. The decision did not invalidate state medical marijuana laws but confirmed federal authority to enforce the CSA in states with medical cannabis programs.

By 2012, 18 states and the District of Columbia had enacted medical marijuana laws. The Obama administration issued the Ogden Memorandum in October 2009, directing federal prosecutors not to focus enforcement resources on individuals in clear compliance with state medical marijuana laws, though this guidance was partially rescinded in the Cole Memorandum of June 2011.

Adult-Use Legalization: Colorado and Washington Launch a New Era

Colorado and Washington voters approved adult-use marijuana legalization in November 2012 through Amendment 64 and Initiative 502, respectively. Both measures allowed adults 21 and older to possess limited amounts of marijuana and established regulatory frameworks for licensed cultivation and retail sales. Colorado's regulated market launched on January 1, 2014, followed by Washington in July 2014.

Deputy Attorney General James Cole issued updated guidance in August 2013, outlining eight federal enforcement priorities including preventing distribution to minors, preventing revenue from going to criminal enterprises, and preventing drugged driving. The Cole Memorandum stated that jurisdictions with strong regulatory systems would be less likely to face federal enforcement action, though it did not provide legal protection.

Alaska, Oregon, and the District of Columbia legalized adult-use marijuana in 2014. California, Massachusetts, Maine, and Nevada followed in 2016. By 2020, 15 states had legalized adult-use cannabis.

The Trump Administration and Sessions Rescission

Attorney General Jeff Sessions rescinded the Cole Memorandum on January 4, 2018, issuing a one-page memo directing U.S. Attorneys to follow established principles in setting enforcement priorities. The Sessions memo created uncertainty in state-legal markets, though federal prosecutions of state-compliant cannabis businesses remained rare.

Congress provided limited protection through annual appropriations riders. The Rohrabacher-Farr Amendment, first enacted in 2014 and renewed annually, prohibited the Department of Justice from using funds to prevent states from implementing medical marijuana laws. Courts interpreted this amendment narrowly in United States v. McIntosh, 833 F.3d 1163 (9th Cir. 2016), holding it protected only state officials implementing medical marijuana laws, not individuals violating the CSA.

Biden's 2022 Directive and the Rescheduling Process Begins

President Joe Biden issued a directive on October 6, 2022, requesting the Secretary of Health and Human Services and the Attorney General to review marijuana's scheduling under the Controlled Substances Act. Biden simultaneously announced pardons for federal simple marijuana possession offenses, affecting approximately 6,500 individuals with federal convictions and thousands more with District of Columbia offenses.

The Department of Health and Human Services completed its review in August 2023, recommending marijuana be rescheduled to Schedule III. The recommendation, based on an evaluation by the Food and Drug Administration, concluded that marijuana has accepted medical use and lower abuse potential than Schedule I or II substances. The FDA cited approved medications containing cannabis-derived compounds, including Epidiolex for seizure disorders, as evidence of accepted medical use.

The DEA's Notice of Proposed Rulemaking: May 2024

The Drug Enforcement Administration published a Notice of Proposed Rulemaking in the Federal Register on May 21, 2024, formally proposing to reschedule marijuana from Schedule I to Schedule III. The NPRM opened a public comment period that received more than 43,000 submissions from patients, physicians, researchers, industry representatives, law enforcement officials, and advocacy organizations.

Schedule III classification would place marijuana in the same category as ketamine, anabolic steroids, and products containing less than 90 milligrams of codeine per dosage unit. Schedule III substances have accepted medical use and moderate to low potential for physical dependence or high psychological dependence. Rescheduling to Schedule III would eliminate the application of Internal Revenue Code Section 280E to state-legal cannabis businesses, allowing standard business expense deductions.

The DEA announced in September 2024 that it would hold a public hearing before an Administrative Law Judge to receive testimony on the proposed rule. The hearing, scheduled for December 2024, was postponed to February 2025, then delayed again to April 2025. As of May 2026, the DEA has not announced a final decision date.

Key Players in the 2026 Federal Marijuana Debate

Drug Enforcement Administration

The DEA holds final authority over marijuana scheduling decisions under 21 U.S.C. § 811, making Administrator Anne Milgram the single most important figure in the 2026 rescheduling debate. The agency must consider eight statutory factors and HHS recommendations but retains independent decision-making authority. DEA officials have historically opposed marijuana rescheduling, with former Administrator Michele Leonhart denying rescheduling petitions in 2001, 2006, and 2011.

The DEA's Diversion Control Division oversees controlled substance regulations and would implement any rescheduling decision. Schedule III classification would require marijuana businesses to register with the DEA, maintain detailed records, and comply with security requirements under 21 C.F.R. § 1301. The agency has not clarified how it would reconcile federal registration requirements with state-legal cannabis operations that remain technically illegal under federal law.

Department of Health and Human Services and Food and Drug Administration

The Food and Drug Administration conducted the scientific and medical evaluation underlying HHS's August 2023 recommendation to reschedule marijuana to Schedule III. The FDA's analysis concluded that marijuana has lower abuse potential than Schedule I or II substances based on epidemiological data, animal studies, and patterns of use. The agency cited evidence that marijuana dependence occurs at lower rates than alcohol or nicotine dependence and that marijuana withdrawal symptoms are less severe than those associated with other controlled substances.

FDA Commissioner Robert Califf has stated the agency would regulate marijuana-derived drug products under Schedule III through the standard drug approval process, requiring clinical trials demonstrating safety and efficacy. This approach would not legalize state-regulated cannabis products, which would remain unapproved drugs under the Federal Food, Drug, and Cosmetic Act.

Congressional Advocates and Opposition

Senate Majority Leader Chuck Schumer has championed comprehensive marijuana reform legislation since 2021, introducing the Cannabis Administration and Opportunity Act in July 2021 and reintroducing updated versions in subsequent sessions. The legislation would remove marijuana from the Controlled Substances Act entirely, expunge federal marijuana convictions, and establish a federal regulatory framework with an excise tax on cannabis sales. The bill has not advanced to a floor vote due to insufficient Republican support.

Representative Nancy Mace introduced the States Reform Act in November 2021, offering a Republican-sponsored alternative that would deschedule marijuana while allowing states to maintain prohibition. The legislation would establish federal regulation through the Alcohol and Tobacco Tax and Trade Bureau and impose a 3% excise tax. The bill attracted limited bipartisan support but did not advance beyond committee consideration.

Opposition to federal marijuana legalization remains concentrated among Republican lawmakers, particularly those representing socially conservative constituencies. Senator Tom Cotton has consistently opposed marijuana reform, arguing that legalization would increase youth use and impaired driving. Representative Andy Biggs has opposed rescheduling, stating that marijuana remains a dangerous drug requiring Schedule I controls.

Multi-State Operators and Industry Groups

The largest cannabis companies, including Curaleaf, Trulieve, Green Thumb Industries, and Cresco Labs, have invested heavily in lobbying for federal reform. These multi-state operators collectively spent $4.2 million on federal lobbying in 2025, according to OpenSecrets. The companies prioritize Section 280E relief and banking access over full legalization, as rescheduling to Schedule III would provide immediate financial benefits while maintaining barriers to entry that protect established operators.

The National Cannabis Industry Association represents more than 1,500 member companies and advocates for comprehensive federal reform including descheduling, expungement, and social equity provisions. The Cannabis Trade Federation focuses on regulatory reform and has supported rescheduling as an interim step toward full legalization.

Reform Advocacy Organizations

The National Organization for the Reform of Marijuana Laws, founded in 1970, advocates for complete marijuana legalization and has submitted detailed comments to the DEA supporting rescheduling as insufficient but preferable to Schedule I status. NORML Deputy Director Paul Armentano has stated that Schedule III classification would perpetuate criminal penalties for possession and maintain federal-state conflicts.

The Drug Policy Alliance emphasizes criminal justice reform and has criticized rescheduling proposals that do not include expungement of marijuana convictions or address racial disparities in enforcement. The Marijuana Policy Project focuses on state-level legalization campaigns while supporting federal reforms including the SAFE Banking Act.

Law Enforcement and Opposition Groups

Smart Approaches to Marijuana, founded by former Representative Patrick Kennedy, opposes marijuana legalization and rescheduling. The organization argues that cannabis legalization has increased youth use, traffic fatalities, and emergency room visits in states with legal markets. SAM submitted comments to the DEA opposing rescheduling and citing studies linking marijuana use to mental health disorders and cognitive impairment.

The National Sheriffs' Association has opposed marijuana legalization, expressing concerns about impaired driving detection and workplace safety. However, some law enforcement organizations, including Law Enforcement Action Partnership, support legalization as a means to reduce incarceration and redirect resources to violent crime prevention.

Legal and Regulatory Framework

Federal marijuana policy operates through the Controlled Substances Act's scheduling system, creating conflicts with state laws that have legalized medical or adult-use cannabis under the Tenth Amendment's reservation of police powers to states.

The Controlled Substances Act Scheduling Criteria

The Attorney General may reschedule marijuana under 21 U.S.C. § 811(a) based on eight factors: actual or relative potential for abuse; scientific evidence of pharmacological effect; current scientific knowledge regarding the substance; history and current pattern of abuse; scope, duration, and significance of abuse; risk to public health; psychic or physiological dependence liability; and whether the substance is an immediate precursor of a controlled substance. The statute requires the Attorney General to request a scientific and medical evaluation from the Secretary of Health and Human Services, whose recommendations on scientific and medical matters are binding under 21 U.S.C. § 811(b).

Schedule III substances must have accepted medical use in treatment in the United States, abuse potential less than Schedule I or II substances, and moderate or low potential for physical dependence or high psychological dependence. The DEA has interpreted "accepted medical use" to require five elements: scientifically determined and accepted knowledge of chemistry; toxicology knowledge; efficacy through controlled studies; general availability of the substance; and recognition of use by qualified experts.

International Treaty Obligations

The United States is party to three international drug control treaties: the Single Convention on Narcotic Drugs of 1961, the Convention on Psychotropic Substances of 1971, and the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances of 1988. The Single Convention requires parties to limit cannabis to medical and scientific purposes and to adopt measures ensuring such limitation.

Legal scholars debate whether marijuana rescheduling or legalization would violate treaty obligations. The International Narcotics Control Board, which monitors treaty compliance, has criticized Uruguay, Canada, and U.S. states for legalizing non-medical cannabis use. However, the United States could withdraw from the treaties, renegotiate terms, or interpret medical use broadly to encompass state-legal programs, as Canada has done since legalizing adult-use cannabis in 2018.

Section 280E Tax Treatment

Internal Revenue Code Section 280E prohibits businesses trafficking in Schedule I or II controlled substances from deducting ordinary business expenses under 26 U.S.C. § 280E. The provision, enacted in 1982 following the Tax Court decision in Edmondson v. Commissioner, applies to state-legal cannabis businesses because marijuana remains federally illegal. Companies may deduct cost of goods sold under 26 U.S.C. § 471 but cannot deduct rent, salaries, marketing, or other operating expenses.

Rescheduling marijuana to Schedule III would eliminate Section 280E's application, allowing cannabis businesses to deduct expenses like any other industry. The Congressional Research Service estimated in 2024 that this change would reduce federal tax revenue by $1.8 billion to $2.3 billion annually, though increased business profitability could partially offset this through higher taxable income.

Banking and Financial Services

The Bank Secrecy Act requires financial institutions to file Suspicious Activity Reports for transactions involving illegal activity. Because marijuana remains federally illegal, banks serving cannabis businesses must file SARs, creating compliance costs and legal uncertainty. The Financial Crimes Enforcement Network issued guidance in 2014 outlining how banks could serve marijuana businesses while meeting BSA obligations, but most financial institutions have declined to serve the industry due to federal prohibition.

The Secure and Fair Enforcement Banking Act would prohibit federal banking regulators from penalizing financial institutions solely for serving state-legal cannabis businesses. The House of Representatives passed the SAFE Banking Act seven times between 2019 and 2024, but the Senate has not advanced the legislation. Rescheduling to Schedule III would not resolve banking access issues, as marijuana businesses would still violate the Controlled Substances Act.

State-by-State Status in 2026

As of May 2026, 24 states, two territories, and the District of Columbia have legalized adult-use marijuana, while 38 states have operational medical cannabis programs, creating a complex patchwork of possession limits, licensing structures, and tax rates.

Adult-Use Legal States

California legalized adult-use marijuana through Proposition 64 in November 2016, allowing adults 21 and older to possess up to one ounce and cultivate six plants. The state imposes a 15% excise tax on retail sales plus local taxes that can exceed 10%. California's market generated $5.3 billion in sales in 2025, the largest in the nation, though illicit market competition remains significant.

Colorado launched adult-use sales on January 1, 2014, following voter approval of Amendment 64. Adults may possess up to one ounce and cultivate six plants, with three mature. The state imposes a 15% retail marijuana sales tax plus a 15% excise tax on wholesale transfers. Colorado collected $423 million in marijuana tax revenue in fiscal year 2025.

New York legalized adult-use cannabis through the Marijuana Regulation and Taxation Act in March 2021, with retail sales beginning in December 2022. Adults may possess up to three ounces and cultivate three mature plants. The state imposes a 9% retail tax plus 4% local tax and a THC-based wholesale tax. New York prioritizes social equity applicants for retail licenses, reserving the first 200 licenses for individuals with prior marijuana convictions or their family members.

Illinois legalized adult-use marijuana through the Cannabis Regulation and Tax Act in January 2020. Residents may possess up to 30 grams, while non-residents may possess 15 grams. The state imposes a tiered tax based on THC content: 10% for products under 35% THC, 20% for cannabis-infused products, and 25% for concentrates over 35% THC. Illinois generated $1.6 billion in adult-use sales in 2025.

Michigan voters approved adult-use legalization in November 2018, with sales beginning in December 2019. Adults may possess up to 2.5 ounces and cultivate 12 plants. The state imposes a 10% excise tax on retail sales. Michigan's market reached $1.9 billion in sales in 2025, with more than 1,800 licensed retailers.

Medical-Only States

Florida operates one of the nation's largest medical marijuana programs, with more than 850,000 registered patients as of March 2026. The state does not allow home cultivation and limits possession to a 70-day supply as determined by a physician. Voters will consider adult-use legalization through a ballot initiative in November 2026, requiring 60% approval for passage.

Ohio legalized adult-use marijuana through Issue 2 in November 2023, with sales beginning in August 2024. Adults may possess up to 2.5 ounces and cultivate six plants. The state imposes a 10% excise tax on retail sales. Ohio's medical program, established in 2016, serves approximately 125,000 registered patients.

Pennsylvania maintains a medical-only program established in 2016, serving more than 450,000 registered patients. The program does not allow home cultivation or smokable flower, though this restriction was lifted in 2021. Governor Josh Shapiro has expressed support for adult-use legalization, but the Republican-controlled legislature has not advanced reform legislation.

Prohibition States

Texas maintains criminal penalties for marijuana possession, with possession of up to two ounces classified as a Class B misdemeanor punishable by up to 180 days in jail and a $2,000 fine. The state operates a limited medical program, the Compassionate Use Program, restricted to patients with specific qualifying conditions and products containing no more than 1% THC. Texas law enforcement made approximately 43,000 marijuana arrests in 2025.

Idaho prohibits all marijuana use, including medical cannabis, and does not recognize out-of-state medical marijuana cards. Possession of any amount is a misdemeanor punishable by up to one year in jail and a $1,000 fine. Idaho voters rejected a medical marijuana initiative in 2022 after the state Supreme Court removed it from the ballot on technical grounds.

Market and Business Implications

Federal rescheduling to Schedule III would reduce effective tax rates for cannabis businesses by 20 to 40 percentage points, potentially increasing industry profitability by $3 billion to $5 billion annually and accelerating consolidation among multi-state operators.

Section 280E Relief and Financial Impact

Cannabis companies currently pay effective federal tax rates between 40% and 70% due to Section 280E's prohibition on business expense deductions. Rescheduling to Schedule III would allow standard deductions for rent, salaries, marketing, and other operating expenses, reducing tax burdens to rates comparable to other industries, typically 21% to 30%.

Curaleaf, the nation's largest multi-state operator by revenue, reported $1.5 billion in sales for fiscal year 2025 with an effective tax rate of 62%. The company estimated in its 2025 annual report that Section 280E relief would increase net income by approximately $180 million annually. Green Thumb Industries projected Section 280E relief would improve margins by 15 to 20 percentage points.

The increased profitability from Section 280E relief would likely accelerate industry consolidation, as larger operators with improved cash flow acquire smaller competitors. Investment bank Cowen projected in March 2026 that rescheduling could trigger $5 billion to $8 billion in merger and acquisition activity within 18 months of implementation.

Capital Markets and Institutional Investment

Federal rescheduling would not automatically grant cannabis companies access to U.S. stock exchanges, as the New York Stock Exchange and Nasdaq prohibit listing companies that violate federal law. However, Schedule III classification could prompt exchanges to reconsider policies, particularly if the DEA clarifies that state-licensed operations would not face federal enforcement.

Canadian cannabis companies, including Canopy Growth, Tilray, and Aurora Cannabis, trade on U.S. exchanges because they do not operate in the United States or limit U.S. operations to hemp-derived products. These companies have struggled financially since Canada legalized adult-use cannabis in 2018, with the sector losing more than 80% of its market capitalization between 2019 and 2025.

Institutional investors, including hedge funds and private equity firms, have largely avoided U.S. cannabis investments due to federal illegality. Rescheduling could attract institutional capital, though full legalization would likely be necessary to unlock investment from risk-averse institutions such as pension funds and university endowments.

Interstate Commerce and Federal Regulation

State-legal cannabis markets operate as closed systems, with cultivation, processing, and sales occurring within state borders. Interstate commerce in marijuana remains prohibited under the Controlled Substances Act, creating inefficiencies and preventing economies of scale. Rescheduling to Schedule III would not authorize interstate commerce, as marijuana would remain a controlled substance subject to DEA registration and distribution restrictions.

Full legalization and removal from the Controlled Substances Act would activate the Commerce Clause, allowing interstate marijuana commerce and federal regulation. The Congressional Research Service analyzed potential regulatory models in a 2024 report, comparing alcohol regulation under the Alcohol and Tobacco Tax and Trade Bureau, tobacco regulation under the FDA, and pharmaceutical regulation under the FDA's drug approval process.

Hemp and CBD Market Confusion

The Agriculture Improvement Act of 2018 legalized hemp, defined as cannabis containing no more than 0.3% delta-9 THC on a dry weight basis. The law created a legal hemp-derived CBD market, though the FDA maintains that CBD cannot be added to food or marketed as a dietary supplement without approval. The agency has not approved any CBD products for these uses, creating regulatory uncertainty.

Hemp-derived intoxicating cannabinoids, including delta-8 THC, delta-10 THC, and THCA, have proliferated in states without adult-use marijuana programs. These products occupy a legal gray area, as they derive from legal hemp but produce psychoactive effects similar to marijuana. Several states, including Colorado, Oregon, and New York, have banned or restricted hemp-derived intoxicants. Federal rescheduling of marijuana would not directly address hemp-derived cannabinoid regulation, though it could prompt Congress to clarify the Farm Bill's hemp provisions.

What Experts and Stakeholders Say

Medical researchers, economists, and policy analysts offer diverging assessments of marijuana rescheduling's likely impacts, with consensus that Schedule III classification represents incremental progress but falls short of resolving federal-state conflicts.

Dr. Ziva Cooper, director of the UCLA Center for Cannabis and Cannabinoids, stated in testimony to the DEA that marijuana meets Schedule III criteria based on accepted medical use and lower abuse potential than Schedule I or II substances. According to Cooper's research, cannabis dependence occurs in approximately 9% of users, compared to 32% for tobacco and 15% for alcohol. Cooper noted that rescheduling would facilitate research by reducing regulatory barriers to obtaining cannabis for clinical trials.

Dr. Nora Volkow, director of the National Institute on Drug Abuse, has emphasized that marijuana is not harmless and that rescheduling should not be interpreted as a determination that cannabis is safe. According to Volkow's statements to Congress, marijuana use is associated with increased risk of cannabis use disorder, impaired cognitive function in adolescents, and respiratory problems from smoking. Volkow has advocated for increased research funding to understand marijuana's therapeutic potential and health risks.

Economist Beau Whitney, who advises cannabis businesses and investors, projected that Section 280E relief would increase cannabis industry profitability by $3.2 billion annually based on 2025 market data. According to Whitney's analysis, the tax savings would flow primarily to multi-state operators, potentially disadvantaging smaller businesses that lack capital to expand. Whitney noted that rescheduling would not resolve banking access issues or authorize interstate commerce.

Former DEA Administrative Law Judge Francis Young, who recommended marijuana rescheduling in a 1988 decision that was overruled by the DEA Administrator, said in a 2024 interview that the agency's historical opposition to rescheduling reflected institutional bias rather than scientific evidence. According to Young, marijuana's safety profile compares favorably to many Schedule II substances, including fentanyl and methamphetamine, which have accepted medical uses despite high abuse potential.

Kevin Sabet, president of Smart Approaches to Marijuana, argued in comments to the DEA that rescheduling would send the wrong message about marijuana's risks. According to Sabet's organization, marijuana potency has increased dramatically since the 1970s, with average THC content in flower rising from 3% to more than 20%, and concentrates exceeding 90% THC. Sabet cited studies linking high-potency marijuana to psychosis and cannabis use disorder.

What's Next: Decision Points and Scenarios for 2026

The DEA's final rescheduling decision, expected between June and December 2026, will determine whether marijuana moves to Schedule III, remains in Schedule I, or faces further administrative delays that extend the current prohibition into 2027.

Rescheduling Timeline and Administrative Process

The DEA must complete several steps before issuing a final rule on marijuana rescheduling. The agency held public hearings before an Administrative Law Judge in April 2025, receiving testimony from medical experts, patients, law enforcement officials, and industry representatives. The ALJ will issue a recommended decision to the DEA Administrator, who retains final authority to accept, reject, or modify the recommendation.

Administrative law experts project the DEA will issue a final rule between June and December 2026. The agency could reschedule marijuana to Schedule III as proposed, maintain Schedule I classification, propose an alternative schedule, or request additional information from HHS. Any final rule would be subject to judicial review in federal court, with challenges likely from both reform advocates seeking descheduling and prohibition supporters opposing any rescheduling.

Congressional Legislation Prospects

Comprehensive marijuana reform legislation faces significant obstacles in the current Congress. The Cannabis Administration and Opportunity Act would require 60 votes to overcome a Senate filibuster, and the