The DEA’s Cannabis Rescheduling Hearing Is Here — What It Means for the Industry

How We Got Here

After decades of advocacy, false starts, and political gridlock, the federal reclassification of cannabis is no longer a distant promise. The Drug Enforcement Administration is set to convene a landmark hearing on June 29, 2026, to formally consider moving marijuana from Schedule I to Schedule III of the Controlled Substances Act — and the cannabis world is paying close attention.

The road to this hearing is a long one. In 2023, the U.S. Department of Health and Human Services recommended that marijuana be rescheduled to Schedule III, citing its accepted medical use and lower potential for abuse compared to Schedule I substances like heroin. The recommendation sat in regulatory limbo until December 2025, when President Trump signed an executive order directing the Attorney General to complete the rescheduling process “in the most expeditious manner in accordance with Federal law.”

That directive bore fruit on April 23, 2026, when Acting Attorney General Todd Blanche issued an order taking immediate action. Under the order, two categories of marijuana products were placed into Schedule III right away: FDA-approved products containing marijuana (such as Epidiolex), and marijuana products regulated by a state medical marijuana license. For the first time in U.S. history, state-licensed medical cannabis is federally recognized as a Schedule III substance.

But the April 23 order also set the stage for something bigger — an expedited administrative hearing to determine whether all marijuana products, including adult-use cannabis, should be moved to Schedule III. That hearing begins June 29, 2026, at the DEA Hearing Facility in Arlington, Virginia.

Who’s Showing Up — and Why It Matters

The hearing isn’t just a bureaucratic formality. It’s an adversarial proceeding where stakeholders on all sides will present factual evidence and expert testimony. Organizations must file a notice of intent to participate by May 28, 2026 — and both supporters and opponents of rescheduling have already moved to secure their seats at the table.

NORML, the National Organization for the Reform of Marijuana Laws, filed to participate on May 26, arguing that cannabis consumers must have a voice in the process. “The millions of Americans who use cannabis responsibly deserve direct representation in proceedings that will shape federal policy for years to come,” NORML said in its filing. On the other side, Smart Approaches to Marijuana (SAM), a prominent anti-legalization group, has also filed to participate, signaling that the hearing will feature genuine opposition to rescheduling.

The DEA will notify selected participants on June 22, giving parties one week to finalize their preparation before opening arguments begin. The hearing is scheduled to conclude no later than July 15 — with a recess over the July 4th weekend in recognition of the nation’s 250th anniversary.

What Schedule III Actually Means

It’s worth being clear about what rescheduling to Schedule III would — and would not — do. Schedule III status means a substance is recognized as having accepted medical use and a moderate to low potential for dependence. Other Schedule III substances include ketamine, anabolic steroids, and buprenorphine.

For the cannabis industry, the implications are significant. The most immediate financial impact involves IRC Section 280E, the federal tax provision that currently bars cannabis businesses from deducting ordinary business expenses because they traffic in Schedule I or II substances. Moving to Schedule III would eliminate 280E’s application to cannabis, potentially saving multi-state operators tens of millions of dollars annually and dramatically improving cash flow across the industry.

Rescheduling would also ease some banking barriers, facilitate research by reducing regulatory hurdles for scientists, and open the door for pharmaceutical development of cannabis-based medicines — as evidenced by the FDA’s recent Breakthrough Therapy Designation for VERTANICAL’s VER-01, a full-spectrum cannabis extract for chronic low back pain that cleared Phase 3 trials.

However, Schedule III does not mean federal legalization. Cannabis would remain a controlled substance. Interstate commerce would still be prohibited. Adult-use operators in states like Colorado and California would not automatically gain federal approval. Full descheduling — removing cannabis from the CSA entirely — would require separate congressional action.

The Industry’s Moment

For cannabis businesses, investors, and advocates, the June 29 hearing represents a genuine inflection point. Even a partial rescheduling outcome could unlock capital markets, attract institutional investment, and finally give operators the ability to run their companies like normal businesses.

The hearing will also set important precedents for how federal agencies approach the growing tension between state cannabis markets and federal law. With 24 states having legalized adult-use cannabis and nearly 40 allowing medical use, the patchwork of conflicting laws has become increasingly untenable.

Whether the DEA ultimately recommends full Schedule III rescheduling, a more limited ruling, or something unexpected, the June 29 hearing marks the most consequential federal proceeding on cannabis in a generation. The industry, patients, and policymakers will be watching closely — and the outcome will shape the future of cannabis in America for decades to come.