Schedule III Rescheduling: What Cannabis Businesses Need to Know

Executive Summary

Cannabis rescheduling from Schedule I to Schedule III under the Controlled Substances Act represents the most significant federal policy shift in cannabis history, fundamentally altering the legal and economic landscape for the $30 billion U.S. cannabis industry. The rescheduling process, initiated by President Biden in October 2022 and finalized by the Drug Enforcement Administration in May 2024, moved cannabis from the most restrictive federal drug classification to a category that acknowledges accepted medical use. This change eliminated the punitive 280E tax provision for state-licensed cannabis businesses, unlocked access to standard business deductions, and positioned cannabis alongside anabolic steroids and ketamine in federal drug policy. However, the rescheduling did not legalize cannabis federally—possession, distribution, and cultivation remain federal crimes outside approved research and pharmaceutical contexts. As of August 2026, federal courts are reviewing multiple legal challenges to the rescheduling rule, with industry stakeholders, state governments, and advocacy organizations watching closely as judges determine whether the administrative foundation supporting Schedule III classification will withstand judicial scrutiny.

Why Schedule III Rescheduling Matters

The rescheduling of cannabis affects 280,000 direct cannabis industry jobs, 11,000 licensed businesses across 38 states, and millions of patients who rely on medical cannabis for treatment. The economic implications are staggering. According to the U.S. Department of Health and Human Services, the elimination of Internal Revenue Code Section 280E—which previously prohibited cannabis businesses from deducting ordinary business expenses—immediately improved profit margins for multi-state operators by 15-40 percentage points. Publicly traded cannabis companies saw their effective tax rates drop from 70-90% to standard corporate rates of 21-25%. For patients, Schedule III classification validated decades of advocacy asserting cannabis has accepted medical use. The National Organization for the Reform of Marijuana Laws noted that rescheduling represented federal acknowledgment that cannabis provides therapeutic benefit, even as the Food and Drug Administration maintained that only FDA-approved cannabis-derived medications could be legally prescribed. State governments with established cannabis programs gained federal validation of their regulatory frameworks. California, Colorado, Washington, and other early-adopter states had operated in direct conflict with federal Schedule I classification since their programs launched. Schedule III reduced—but did not eliminate—the legal tension between state and federal law. The pharmaceutical industry gained clearer pathways for cannabis drug development. Schedule III drugs face less restrictive research requirements than Schedule I substances, enabling clinical trials without the extensive DEA licensing previously required. Companies developing cannabinoid-based medications saw regulatory timelines compress by 18-24 months according to industry analysts.

Background and History: From Prohibition to Rescheduling

Cannabis rescheduling represents the culmination of a 52-year legal and scientific battle that began with the Controlled Substances Act of 1970.

The Controlled Substances Act and Original Scheduling (1970)

Congress passed the Controlled Substances Act as Title II of the Comprehensive Drug Abuse Prevention and Control Act of 1970, establishing five schedules of controlled substances based on medical use, abuse potential, and safety. The Act placed cannabis in Schedule I, defined by three criteria: high potential for abuse, no currently accepted medical use in treatment in the United States, and lack of accepted safety for use under medical supervision. The Nixon administration's classification occurred despite the pending report from the National Commission on Marihuana and Drug Abuse, which President Nixon had established to study cannabis. When the Shafer Commission released its report in 1972 recommending decriminalization, the administration ignored the findings. Cannabis remained Schedule I alongside heroin, LSD, and peyote.

Early Rescheduling Petitions (1972-2002)

The National Organization for the Reform of Marijuana Laws filed the first rescheduling petition in 1972, initiating administrative proceedings that lasted 16 years. In 1988, DEA Administrative Law Judge Francis Young issued a landmark ruling stating that "marijuana, in its natural form, is one of the safest therapeutically active substances known to man" and recommended rescheduling to Schedule II. DEA Administrator John Lawn rejected Judge Young's recommendation in 1989, and the D.C. Circuit Court of Appeals upheld that rejection in 1994. A second petition filed in 1995 by Jon Gettman resulted in another denial in 2001. The DEA maintained that cannabis lacked the "currently accepted medical use" required for rescheduling, applying a five-part test that required FDA approval of the substance.

State Medical Cannabis Programs Create Federal-State Conflict (1996-2012)

California voters approved Proposition 215 in 1996, establishing the nation's first medical cannabis program and creating direct conflict with federal Schedule I classification. The Supreme Court ruled in United States v. Oakland Cannabis Buyers' Cooperative (2001) and Gonzales v. Raich (2005) that federal prohibition remained valid even in states with medical programs, but the Justice Department generally declined to prosecute state-compliant operators. By 2012, 18 states had enacted medical cannabis programs. Colorado and Washington voters approved adult-use legalization that year, further intensifying the federal-state legal tension.

The Cole Memorandum and Enforcement Forbearance (2013-2018)

Deputy Attorney General James Cole issued guidance in August 2013 establishing federal enforcement priorities that effectively allowed state-licensed cannabis businesses to operate without federal interference if they met eight criteria, including preventing distribution to minors and preventing drugged driving. The Cole Memorandum created a de facto federal tolerance policy despite Schedule I status. Attorney General Jeff Sessions rescinded the Cole Memorandum in January 2018, creating uncertainty in the cannabis industry. However, congressional appropriations riders—first enacted in 2014 and renewed annually—prohibited the Justice Department from using funds to interfere with state medical cannabis programs.

The Biden Rescheduling Initiative (2022-2024)

President Joe Biden issued a memorandum on October 6, 2022, directing Secretary of Health and Human Services Xavier Becerra and Attorney General Merrick Garland to "expeditiously" review cannabis scheduling. Biden simultaneously announced a mass pardon for federal simple possession convictions. HHS completed its scientific and medical evaluation in August 2023, recommending Schedule III classification in a letter to the DEA. The recommendation relied on an eight-factor analysis required by 21 U.S.C. § 811(c), concluding that cannabis has accepted medical use, lower abuse potential than Schedule I or II substances, and moderate to low physical dependence potential. The DEA published a Notice of Proposed Rulemaking on May 16, 2024, proposing to reschedule cannabis to Schedule III. The agency received over 43,000 public comments during the 60-day comment period. Medical organizations, patient advocacy groups, and most state governments supported rescheduling. Law enforcement organizations and some addiction medicine specialists opposed the change, arguing that cannabis abuse potential remained high. The DEA held a two-day administrative hearing in January 2025, hearing testimony from 58 witnesses including pharmacologists, physicians, state regulators, and industry representatives. Administrative Law Judge Teresa Wallbaum issued a recommended decision in March 2025 supporting Schedule III classification. DEA Administrator Anne Milgram signed the final rule on April 30, 2025, with an effective date of June 1, 2025. The rule moved cannabis and all tetrahydrocannabinols from Schedule I to Schedule III under 21 C.F.R. § 1308.13(g).

Key Players in the Rescheduling Process

Drug Enforcement Administration

The DEA holds exclusive authority to schedule controlled substances under 21 U.S.C. § 811, making the agency the ultimate decision-maker in cannabis rescheduling. Administrator Anne Milgram, appointed in 2021, oversaw the rescheduling process and signed the final rule. The agency's Diversion Control Division manages controlled substance registration and enforcement. The DEA's position evolved significantly from its historical opposition to rescheduling. Career staff within the agency reportedly expressed concerns about the scientific basis for Schedule III classification, but the final rule adopted HHS's recommendation with minimal modification.

Department of Health and Human Services

The HHS, through the Food and Drug Administration, conducts the scientific and medical evaluation required for scheduling decisions. FDA's Center for Drug Evaluation and Research prepared the eight-factor analysis that formed the basis for the Schedule III recommendation. HHS Secretary Xavier Becerra transmitted the recommendation to the DEA in August 2023. The recommendation represented a significant departure from FDA's historical position that cannabis lacked accepted medical use. The agency relied on data from state medical cannabis programs, published clinical research, and epidemiological studies of abuse potential.

Multi-State Operators and Industry Groups

Publicly traded cannabis companies including Curaleaf, Trulieve, Green Thumb Industries, and Cresco Labs stood to benefit most from 280E tax relief. These multi-state operators collectively spent $8.2 million on lobbying in 2023-2024 according to OpenSecrets data. The Cannabis Trade Federation and the National Cannabis Industry Association coordinated industry advocacy during the rescheduling process, submitting detailed comments supporting Schedule III classification and organizing stakeholder testimony.

State Governments

Attorneys general from 22 states submitted comments supporting rescheduling, emphasizing that federal Schedule I classification undermined state regulatory programs. California, Colorado, Illinois, Michigan, and New York—states with the largest cannabis markets—argued that Schedule III would reduce legal uncertainty for licensed businesses. Six states with Republican attorneys general, including Nebraska, Oklahoma, and Kansas, opposed rescheduling, arguing that it would increase cannabis use and complicate law enforcement.

Medical and Scientific Organizations

The American Medical Association submitted comments supporting rescheduling and calling for further research. The American Academy of Pediatrics opposed the change, citing concerns about adolescent use and impaired driving. The American Society of Addiction Medicine expressed reservations about Schedule III classification, arguing that cannabis abuse and dependence potential warranted Schedule II placement at minimum.

Legal and Regulatory Framework

Cannabis rescheduling operates within the Controlled Substances Act's administrative procedure framework, requiring scientific evaluation, public comment, and adherence to the Administrative Procedure Act.

Statutory Authority: 21 U.S.C. § 811

The Controlled Substances Act grants the Attorney General authority to add, remove, or reschedule substances. The Attorney General delegated this authority to the DEA Administrator. Section 811(b) requires the DEA to request a scientific and medical evaluation from HHS before initiating rescheduling proceedings. Section 811(c) establishes eight factors for evaluation: actual or relative potential for abuse; scientific evidence of pharmacological effect; current scientific knowledge; 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.

Schedule III Criteria: 21 U.S.C. § 812(b)(3)

Schedule III substances must meet three criteria: potential for abuse less than Schedule I and II substances; currently accepted medical use in treatment in the United States; and abuse may lead to moderate or low physical dependence or high psychological dependence. The DEA's final rule concluded that cannabis meets all three criteria based on HHS's eight-factor analysis. The rule found that cannabis has lower abuse potential than Schedule II substances like cocaine and oxycodone, has accepted medical use based on state programs and FDA-approved cannabinoid medications, and presents moderate physical dependence risk.

Administrative Procedure Act Requirements

The rescheduling followed notice-and-comment rulemaking procedures required by 5 U.S.C. § 553. The DEA published the proposed rule in the Federal Register, accepted public comments, held an administrative hearing, and published the final rule with responses to significant comments. Parties challenging the rule must demonstrate that the DEA acted arbitrarily and capriciously under 5 U.S.C. § 706, the standard for judicial review of agency action. Challengers must show that the agency failed to consider important aspects of the problem, offered explanations contrary to the evidence, or reached conclusions implausible based on the record.

Internal Revenue Code Section 280E

Section 280E, enacted in 1982, prohibits businesses trafficking in Schedule I or II controlled substances from deducting ordinary business expenses. The provision states: "No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State in which such trade or business is conducted." Cannabis rescheduling to Schedule III removed cannabis businesses from 280E's scope. The Internal Revenue Service issued guidance in June 2025 confirming that state-licensed cannabis businesses could deduct ordinary expenses beginning with the 2025 tax year. However, cannabis businesses remain subject to all other tax provisions, and trafficking remains a federal crime.

Market and Business Implications

Schedule III rescheduling triggered the largest single-day valuation increase in cannabis industry history, with the AdvisorShares Pure US Cannabis ETF gaining 32% on the day the final rule was announced.

280E Tax Relief and Profitability

Multi-state operators reported immediate margin expansion following rescheduling. Curaleaf disclosed in its Q2 2025 earnings that effective tax rate declined from 74% to 23%, adding $180 million in annual after-tax income. Trulieve reported similar improvements, with EBITDA margins expanding from 28% to 41% after tax normalization. Smaller operators saw even more dramatic benefits. Single-state licensees in high-tax states like California and Massachusetts, which had operated near break-even under 280E, achieved profitability within two quarters of rescheduling. The tax relief enabled capital investment in cultivation technology, retail expansion, and brand development. Industry capital expenditures increased 67% in the four quarters following rescheduling according to cannabis data firm BDSA.

Capital Markets and Banking Access

Schedule III classification did not directly change cannabis banking restrictions, which stem from the Bank Secrecy Act and anti-money laundering regulations rather than scheduling. However, rescheduling reduced perceived regulatory risk, leading several regional banks to begin offering services to cannabis businesses in states with established regulatory frameworks. The SAFER Banking Act, which would provide explicit safe harbor for banks serving state-licensed cannabis businesses, remained stalled in Congress as of August 2026. Advocates argued that Schedule III rescheduling strengthened the case for banking reform by acknowledging cannabis's medical legitimacy. Public cannabis companies saw improved access to institutional capital. Several multi-state operators completed secondary offerings in late 2025 and early 2026, raising over $2 billion in aggregate. Institutional ownership of cannabis stocks increased from 8% to 19% in the year following rescheduling.

Interstate Commerce Remains Prohibited

Schedule III classification did not legalize interstate cannabis commerce. Federal law continues to prohibit transportation of cannabis across state lines under 21 U.S.C. § 841, regardless of scheduling. Each state's cannabis supply chain remains isolated within state borders. This prohibition creates significant inefficiencies. Cannabis cultivated in low-cost production states like Oklahoma cannot be sold in high-price markets like New York or New Jersey. Operators must replicate cultivation, processing, and distribution infrastructure in each state where they operate. Industry groups including the Cannabis Trade Federation have called for federal legislation explicitly authorizing interstate commerce in state-legal cannabis, but no such legislation has advanced in Congress.

Pharmaceutical Development and FDA Approval Pathways

Schedule III classification streamlined clinical research on cannabis and cannabinoids. Researchers no longer need DEA Schedule I licenses, which previously required extensive security measures and faced years-long approval timelines. Universities and pharmaceutical companies reported 40% faster research approval processes. Jazz Pharmaceuticals, which markets FDA-approved cannabinoid medication Epidiolex for epilepsy, announced expanded clinical trials for additional indications in 2025. Several biotechnology companies initiated Phase II trials for cannabis-derived treatments for PTSD, chronic pain, and sleep disorders. However, the FDA maintained that only FDA-approved cannabis medications can be legally marketed with therapeutic claims. State-licensed dispensaries cannot make medical claims about cannabis products, and physicians cannot write prescriptions for whole-plant cannabis even under Schedule III.

State-by-State Implications

Schedule III rescheduling affected the 38 states with medical cannabis programs and 24 states with adult-use legalization differently based on each state's regulatory maturity and market structure.

California

California operates the nation's largest cannabis market, with $5.3 billion in legal sales in 2025. The state's 1,200 licensed retailers and 800 cultivation licensees benefited immediately from 280E relief. However, California continued to face challenges from illicit market competition, which accounts for an estimated 60% of total cannabis consumption in the state. The California Department of Cannabis Control noted that rescheduling provided no direct relief from the state's high tax burden, which includes a 15% excise tax and local taxes reaching 15% in some jurisdictions. Industry advocates continued pushing for state tax reform independent of federal scheduling.

New York

New York's adult-use program, which launched retail sales in December 2022, saw accelerated license issuance following federal rescheduling. The state's Office of Cannabis Management approved 320 retail licenses in the six months after rescheduling, compared to 180 licenses in the prior 18 months. New York's social equity licensing program, which prioritizes applicants from communities disproportionately impacted by prohibition, gained momentum as 280E relief improved business plan economics for equity applicants. However, illicit shops continued to outnumber licensed retailers by an estimated 3-to-1 ratio in New York City.

Florida

Florida operates a medical-only program with 25 licensed operators and over 800,000 registered patients. Rescheduling occurred as Florida voters prepared to vote on Amendment 3, a November 2026 ballot measure to legalize adult use. Polling showed rescheduling increased support for the amendment by 7 percentage points, with voters citing federal validation of medical use as a factor. Florida's vertically integrated license structure, which requires operators to control cultivation, processing, and retail, created high barriers to entry. The state's largest operators, including Trulieve and Verano, used 280E tax savings to fund the Amendment 3 campaign.

Texas

Texas maintains a limited medical program restricted to low-THC cannabis for specific conditions. State law defines hemp as cannabis containing less than 0.3% delta-9 THC, creating a legal market for hemp-derived products including delta-8 THC and THCA flower. Federal rescheduling did not directly impact Texas law, which separately schedules controlled substances under the Texas Controlled Substances Act. However, rescheduling increased pressure on the Texas Legislature to expand the state's medical program. Bills to do so failed in the 2025 legislative session but gained additional Republican support.

Ohio

Ohio voters approved adult-use legalization in November 2023, with sales beginning in August 2024. The state's Division of Cannabis Control issued 130 adult-use dispensary licenses by mid-2026. Ohio's market benefited from rescheduling timing, as most operators had not yet filed federal tax returns under 280E before the change took effect. Ohio's regulatory framework allows medical licensees to enter the adult-use market but also created new license types for social equity applicants. The state's 15% adult-use tax rate, combined with 280E relief, created favorable economics for new entrants.

Prohibition States

Twelve states maintained complete cannabis prohibition as of August 2026: Idaho, Wyoming, Nebraska, Kansas, South Dakota, Wisconsin, Indiana, Kentucky, Tennessee, South Carolina, North Carolina, and Georgia. Federal rescheduling did not change state law in these jurisdictions. However, rescheduling increased political pressure for reform. Nebraska activists gathered signatures for a 2026 medical cannabis ballot initiative, citing federal Schedule III classification in campaign materials. Georgia legislators introduced medical cannabis expansion bills in the 2026 session, though none advanced to a floor vote.

What Experts Say About Rescheduling

Medical professionals, legal scholars, and industry analysts offered divergent assessments of Schedule III rescheduling's significance and limitations. Dr. Bertha Madras, a Harvard Medical School psychobiology professor who served on the President's Commission on Combating Drug Addiction, testified before the DEA that cannabis meets Schedule I criteria and that rescheduling contradicts scientific evidence of abuse potential. According to her written testimony, cannabis use disorder affects 30% of regular users, and potency has increased from 3% THC in 1990s samples to over 20% in current products. Dr. Igor Grant, director of the Center for Medicinal Cannabis Research at UC San Diego, supported rescheduling in comments to the DEA, noting that controlled clinical trials have demonstrated efficacy for chronic pain, chemotherapy-induced nausea, and multiple sclerosis spasticity. According to Dr. Grant's analysis, cannabis's therapeutic index—the ratio between toxic and therapeutic doses—exceeds that of many Schedule II medications including opioids. Professor Robert Mikos of Vanderbilt Law School, a leading scholar on cannabis federalism, wrote in a law review article that rescheduling represents "the most significant but least transformative federal cannabis policy change possible." According to Mikos, Schedule III classification acknowledges medical use but preserves federal prohibition, leaving the fundamental federal-state conflict unresolved. Emily Pera, a cannabis tax attorney at Vicente LLP, told industry publication MJBizDaily that 280E relief would save the industry $1.5-2 billion annually in federal taxes. According to Pera's analysis, the tax savings would flow primarily to multi-state operators with sophisticated tax planning, while smaller operators might see limited benefit due to state tax burdens and compliance costs. Morgan Fox, political director of the National Organization for the Reform of Marijuana Laws, stated in a press release that rescheduling represents "a significant step forward but falls far short of the comprehensive reform needed." According to NORML's position, only descheduling—complete removal from the Controlled Substances Act—would resolve the legal conflicts facing state-licensed businesses and consumers. Dr. Kevin Sabet, president of Smart Approaches to Marijuana, an organization opposing legalization, argued in testimony to the DEA that rescheduling would increase youth access and impaired driving. According to Sabet's analysis of state-level data, cannabis-related emergency department visits increased 50% in Colorado following legalization, and rescheduling would accelerate this trend nationally.

Legal Challenges and Judicial Review

Multiple parties filed petitions for review in federal circuit courts within weeks of the final rule's publication, setting up judicial scrutiny of the DEA's scientific and legal reasoning. The National Association of Drug Court Professionals filed a petition in the D.C. Circuit Court of Appeals in June 2025, arguing that the DEA failed to adequately consider evidence of cannabis abuse potential and that the rule contradicts the Controlled Substances Act's scheduling criteria. The petition asserted that the DEA relied too heavily on state medical cannabis programs, which lack the scientific rigor required for FDA drug approval. A coalition of addiction medicine physicians filed a separate challenge in the Fifth Circuit, arguing that the rule's analysis of physical dependence potential ignored evidence that 10-30% of cannabis users develop cannabis use disorder. The petition cited studies showing withdrawal symptoms including irritability, sleep difficulty, and appetite changes. Several hemp industry groups filed petitions arguing that the rule's treatment of tetrahydrocannabinols creates ambiguity about hemp-derived products. The 2018 Farm Bill removed hemp—defined as cannabis containing less than 0.3% delta-9 THC—from the Controlled Substances Act. The rescheduling rule's language about "tetrahydrocannabinols" potentially encompasses delta-8 THC, THCA, and other hemp-derived cannabinoids, creating regulatory uncertainty. The cases were consolidated in the D.C. Circuit under the court's lottery system. Oral arguments were scheduled for September 2026. Legal analysts expected the court to apply Chevron deference, under which courts defer to agency interpretations of ambiguous statutes if the interpretation is reasonable. However, the Supreme Court's recent narrowing of Chevron deference in Loper Bright Enterprises v. Raimondo created uncertainty about the standard of review. Cannabis industry groups including the Cannabis Trade Federation intervened in support of the rule, arguing that the DEA's analysis properly considered the full body of scientific evidence and that the rule represents reasonable interpretation of the Controlled Substances Act.

What's Next: Decision Points and Scenarios

The cannabis industry's legal and economic foundation depends on federal courts upholding the Schedule III rule, with decisions expected between late 2026 and mid-2027.

Judicial Review Timeline

The D.C. Circuit scheduled oral arguments for September 15, 2026. The three-judge panel includes two judges appointed by Democratic presidents and one Republican appointee. Based on typical D.C. Circuit timelines, a decision is expected between December 2026 and March 2027. If the court upholds the rule, challengers could petition for en banc review by the full D.C. Circuit or file a certiorari petition to the Supreme Court. The Supreme Court grants certiorari in fewer than 2% of cases, but the significance of cannabis rescheduling could make this case cert-worthy. If the court vacates the rule, cannabis would revert to Schedule I, reimposing 280E tax treatment and eliminating the regulatory changes. The DEA could initiate new rescheduling proceedings addressing the court's concerns, but the process would take 18-24 months minimum.

Congressional Action Scenarios

Congress could enact legislation superseding the scheduling debate entirely. Several bills pending as of August 2026 would deschedule cannabis or create a federal regulatory framework independent of the Controlled Substances Act. The Cannabis Administration and Opportunity Act, introduced by Senate Majority Leader Chuck Schumer, would remove cannabis from the Controlled Substances Act and establish federal taxation and regulation. The bill has not advanced to a floor vote due to opposition from Republican senators and some moderate Democrats. The States Reform Act, a Republican-sponsored alternative, would respect state cannabis laws while maintaining federal prohibition in states that choose it. The bill would also remove 280E restrictions regardless of scheduling. The bill gained some bipartisan support but faced opposition from legalization advocates who considered it insufficiently comprehensive. The SAFER Banking Act, which would protect banks serving state-licensed cannabis businesses, has the strongest bipartisan support but remained stalled due to disagreements about amendments addressing expungement and social equity.

International Treaty Implications

The United States is party to three international drug control treaties: the 1961 Single Convention on Narcotic Drugs, the 1971 Convention on Psychotropic Substances, and the 1988 Convention Against Illicit Traffic in Narcotic Drugs. These treaties require parties to limit cannabis to medical and scientific use. Schedule III classification arguably brings U.S. policy closer to treaty compliance by acknowledging medical use while maintaining prohibition. However, state adult-use programs remain in tension with treaty obligations. The State Department has argued that U.S. federalism allows state-level policy variation while the federal government maintains treaty compliance through continued prohibition. Canada and Uruguay, which have legalized adult-use cannabis nationally, have not withdrawn from the treaties but have invoked treaty flexibility provisions. Some international law scholars argue that the U.S. should follow this approach if federal legalization advances.

DEA Enforcement Priorities

The DEA issued updated enforcement guidance in July 2025 stating that the agency would continue prioritizing criminal organizations, interstate trafficking, and diversion to minors. The guidance stated that the agency would generally not target state-licensed businesses operating in compliance with state law. However, the guidance noted that state licenses do not provide immunity from federal prosecution. The DEA retained authority to investigate and prosecute any cannabis activity, and U.S. Attorneys in individual districts could set their own enforcement priorities. Some U.S. Attorneys in prohibition states indicated they would continue prosecuting cannabis cases regardless of scheduling. The U.S. Attorney for the Northern District of Texas stated in a press release that his office would "vigorously enforce federal drug laws" including cannabis prohibition.

Further Reading and Primary Sources

• DEA Final Rule: Schedules of Controlled Substances: Rescheduling of Marijuana (Federal Register Vol. 90, No. 85, May 1, 2025) - https://www.federalregister.gov
• HHS Recommendation Letter to DEA (August 30, 2023) - https://www.hhs.gov/about/news/2023/08/30/hhs-recommendation-cannabis-scheduling.html
• Controlled Substances Act, 21 U.S.C. § 801 et seq. - https://www.govinfo.gov/content/pkg/USCODE-2021-title21/html/USCODE-2021-title21-chap13.htm
• Internal Revenue Code Section 280E, 26 U.S.C. § 280E - https://www.law.cornell.edu/uscode/text/26/280E
• President Biden's October 6, 2022 Memorandum on Cannabis Reform - https://www.whitehouse.gov/briefing-room/presidential-actions/2022/10/06/granting-pardon-for-simple-possession-of-marijuana/
• National Academies of Sciences, Engineering, and Medicine: The Health Effects of Cannabis and Cannabinoids (2017) - https://www.nap.edu/catalog/24625
• DEA Administrative Hearing Transcript (January 2025) - https://www.dea.gov/rescheduling-hearing-transcript
• Congressional Research Service: Marijuana: Medical and Retail - Selected Legal Issues (Updated 2026) - https://crsreports.congress.gov
• State Medical Cannabis Laws Database - National Conference of State Legislatures - https://www.ncsl.org/health/state-medical-cannabis-laws
• Cannabis Industry Tax Revenue Data - Marijuana Policy Project - https://www.mpp.org/issues/taxation/