Acting Attorney General Todd Blanche signed an order that immediately reclassifies FDA-approved cannabis products and state-licensed medical cannabis from Schedule I to Schedule III.

Key Details: What Changed Today?

• Shift to Schedule III State-licensed medical cannabis + FDA-approved cannabis products are now Schedule III instead of Schedule I.
• Schedule III vs Schedule I Schedule III = “moderate to low potential for dependence” like ketamine, Tylenol with codeine, testosterone. Schedule I = heroin, LSD, “no accepted medical use”. This doesn’t federally legalize recreational cannabis.

Why It Matters?

• Research: Removes major barriers. Schedule I had strict licensing rules — only Univ. of Mississippi could grow for research 1968-2021. Now researchers can access pot products more easily.


• Taxes: State-licensed medical cannabis businesses can now deduct business expenses on federal taxes for the first time.


• Medical access: “Recognizes that cannabis has accepted medical use”. Blanche said it gives “patients better care and doctors more reliable information”.

What’s next

DOJ also ordered an “expedited hearing with set deadlines” to consider fully rescheduling cannabis more broadly.

DEA administrative hearing scheduled for June 29, 2026. Follows Trump’s Dec 18, 2025 executive order directing DOJ to reclassify.

Context

Trump complained Saturday in the Oval Office that agencies were “slow-walking me on rescheduling”. Blanche became acting AG April 2 after Trump fired Pam Bondi, who opposed cannabis reform.

Cannabis stocks initially jumped 6-13% but retreated 6-10% later as investors noted today’s order only covers FDA-approved + state medical, not full adult-use market.

This is the biggest federal shift since 1970 when cannabis was put in Schedule I. The White House called it a “welcome step to increase critical research”.

How This Helps the Cannabis Industry?

• Taxes: relief for medical operators Before: IRS Code 280E bars any business trafficking Schedule I or II drugs from deducting normal business expenses. Dispensaries paid effective tax rates of 70%+ because they couldn't deduct rent, payroll, marketing.
  
  After: Schedule III is exempt from 280E. State-licensed medical cannabis companies can now deduct business expenses on federal taxes for the first time.
  
  Catch: This only applies to state-legal medical companies. Recreational/Adult-use businesses in those states are still stuck with 280E until full rescheduling happens.
• Research & pharma path Before: Schedule I meant “no accepted medical use + high abuse potential.” Researchers needed DEA Schedule I licenses, special vaults, and could only get product from Univ. of Mississippi 1968-2021. Quality/strain variety was poor.
  
  After: Schedule III drops most of those barriers. Researchers can obtain state-legal medical products for studies. Makes FDA drug trials way easier. Staci Gruber from Harvard called it “a pretty significant shift” because it officially recognizes accepted medical use.
• Banking & investment signal Still no SAFE Banking Act, so federally illegal status blocks most banks. But Schedule III makes institutions less skittish. Cannabis stocks jumped 6-13% on the news before cooling. DEA registration for state-licensed producers/distributors gets faster.
• Interstate medical & pharma FDA-approved cannabis drugs + state-licensed medical cannabis can now be prescribed like ketamine or Tylenol with codeine. Opens door for pharma companies to enter medical market.

The Legal Details

What the order actually did today?

Acting AG Todd Blanche “immediately rescheduled FDA-approved cannabis and state-licensed cannabis from Schedule I to Schedule III.”

Also ordered a “new, expedited hearing with set deadlines” to consider fully rescheduling all cannabis. DEA admin hearing set for June 29, 2026.

What didn’t change?

• Recreational stays Schedule I: Today’s order doesn’t legalize adult-use under federal law. If you’re a rec dispensary in Colorado, you still face 280E.
• State laws rule: Even Schedule III, you still need a prescription. Recreational sales are still federally illegal. States with legal cannabis are still in conflict with federal law — just less conflict.
• Criminal penalties: Manufacturing/trafficking penalties are lower for Schedule III vs I, but possession/distribution without authorization is still a federal crime.

Legal Foundation

• Controlled Substances Act 1970: Put cannabis in Schedule I. Congress can move it, or AG can via rulemaking with HHS input.
• Today’s move: Used AG authority under CSA. Followed Trump’s Dec 18, 2025 executive order directing DOJ to reclassify.
• Next step: DEA administrative law judge hearing → final rule. That’s the “full rescheduling” Blanche referenced.

Big Picture

This is the first real federal recognition of medical cannabis in 55+ years. Medical side gets tax + research wins immediately.

Recreational industry still waits for the June hearing and final rule.

Stay tune for more news and details on this on our page.