DOJ and DEA Loosen Medical Marijuana Restrictions and Move Toward Broader Rescheduling

On April 22, 2026, DOJ and DEA took two coordinated steps that could reshape—though not resolve—the federal treatment of marijuana. First, they issued a final order placing certain FDA-approved and state-licensed medical marijuana products in Schedule III of the Controlled Substances Act. At the same time, DEA announced an expedited hearing on a separate proposal to reclassify marijuana more broadly from Schedule I to Schedule III, with proceedings set to begin in late June. Together, these actions signal movement toward a less restrictive federal framework, but their immediate impact is narrower than it may appear: the final order applies only to a limited subset of medical marijuana products and leaves most cannabis activity subject to existing federal controls. For industry participants, the developments introduce a more compliance-driven, state license-dependent pathway today, while setting the stage for potentially more significant changes in the months ahead.

First, in accordance with President Trump’s December 18, 2025, Executive Order 14370 on Increasing Medical Marijuana and Cannabidiol Research, DOJ and DEA published a final order placing FDA-approved drug products containing marijuana, and marijuana or marijuana-containing products subject to qualifying state medical marijuana licenses, in Schedule III of the Controlled Substances Act.

In parallel with that reclassification, DEA issued a hearing notice setting an expedited schedule for the separate, broader proposed transfer of marijuana from Schedule I to Schedule III. That hearing is scheduled to begin June 29, 2026, and conclude no later than July 15, 2026.

These are undoubtedly significant developments in federal drug policy that come amidst a number of other developments with respect to hemp, CBD and other related products.[1]  However, they are not as broad as they may appear at first glance.

The Final Order Applies Only to Certain Medical Marijuana Products

The order does not provide a blanket reclassification for all medical marijuana products. Marijuana that falls outside the covered FDA-approved or state medical marijuana frameworks remains ineligible for Schedule III treatment under the order. Likewise, the order does not apply to hemp as defined under federal law, does not extend to synthetically derived THC, and does not affect products that are already separately scheduled, such as Marinol and Syndros.

Medical Marijuana Has Not Been “Legalized”

The final order’s limited Schedule III treatment does not equate to deregulation of covered medical marijuana products. State-licensed medical marijuana entities must continue to operate within the scope of their state licenses and must obtain, or timely seek, DEA registration as manufacturers, distributors, or dispensers. Any such DEA registration is constrained by the scope of the underlying state license and will be automatically suspended if that license is suspended, revoked, or expires.

The order likewise does not authorize nonmedical marijuana activity. DEA retains broad authority to impose requirements relating to recordkeeping, reporting, order forms, labeling, packaging, disposal, security, and prescription or state-certification documentation to ensure compliance with the Controlled Substances Act and applicable U.S. treaty obligations. Covered marijuana products also remain subject to import and export permit requirements.

For State Medical Marijuana, Schedule III Treatment Hinges on a State License

A central feature of the order is its reliance on state medical marijuana licensing systems, effectively elevating state licensure to a matter of federal compliance. A qualifying license is one issued by a state, the District of Columbia, or a U.S. territorial entity that authorizes the licensee to manufacture, distribute, or dispense marijuana or marijuana-containing products for medical purposes.

The order also establishes an expedited DEA registration pathway for state-licensed medical marijuana manufacturers, distributors, and dispensers. A valid state license may serve as conclusive evidence that the applicant is authorized under state law to conduct the activities covered by the federal registration. However, any DEA registration is limited to the scope of the underlying state license and will be automatically suspended if that license is suspended, revoked, or expires.

Broader Marijuana Rescheduling Remains Pending

The immediate order should not be confused with the broader proposal to transfer marijuana generally from Schedule I to Schedule III. DEA’s hearing notice states that the hearing will begin on June 29, 2026, at 9:00 a.m. Eastern Time at the DEA Hearing Facility in Arlington, Virginia, and will conclude no later than July 15, 2026, with a recess on July 3 and reconvening on July 6.

Conclusion

DOJ’s announcements are noteworthy steps toward potential deregulation, but their practical impact is narrower than initial headlines may suggest. The final order does not deschedule marijuana, legalize recreational cannabis, or eliminate existing DEA and FDA compliance obligations. Instead, it creates a more limited, compliance-driven framework tied closely to state medical marijuana licensing regimes.

In the near term, stakeholders should avoid overinterpreting these developments as a broad shift in federal policy. State-licensed medical marijuana operators should evaluate whether to seek DEA registration under the expedited process and conduct a gap analysis of their current operations against Schedule III requirements, including recordkeeping and reporting obligations. Companies operating across both medical and adult-use markets should also assess how this development may require a more segmented compliance approach.

Life sciences companies, investors, and lenders may wish to reassess research opportunities, diligence practices, and risk assumptions in light of the evolving—but still uncertain—federal posture. At the same time, all participants should remain mindful that federal enforcement authority remains in place and that compliance with state licensing regimes now carries increased federal significance.

Looking ahead, stakeholders should closely monitor DEA’s upcoming administrative hearing and any resulting final rule, as well as related developments from FDA, IRS, and Congress, to determine whether broader changes to marijuana’s federal status—and their attendant regulatory and commercial implications—will follow.

[1] See, e.g., Hemp Safety Enforcement Act, S. 4315, 119th Cong. (2026); Hemp Enforcement, Modernization, and Protection Act, H.R. 7212, 119th Cong. (2026); FDA, Letter from Commissioner Makary: Hemp-Derived Cannabidiol Products in Medical Research Models (Apr. 2026), https://www.fda.gov/media/191782/download.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.