Cannabis Rescheduling Explained: What Moving Marijuana to Schedule III Would Change

What does “cannabis rescheduling” mean?

Under the Controlled Substances Act, drugs are categorized into five
schedules based on medical usefulness, abuse potential, and safety.
Marijuana has been classified as a Schedule I substance since 1970 —
alongside heroin and LSD. Schedule I substances are defined as having no
accepted medical use and a high potential for abuse.
*Related coverage:* Trump signed an executive order directing the
Department of Justice to expedite cannabis rescheduling.

Rescheduling would move cannabis to *Schedule III*, a category that
includes substances like ketamine and anabolic steroids. The change would
formally recognize accepted medical use while keeping federal controls in
place.
Would rescheduling legalize marijuana?

No. Rescheduling would *not* legalize marijuana for recreational use, nor
would it override state cannabis laws.

Cannabis would remain federally regulated, and state-legal markets would
continue operating under existing frameworks. Criminal penalties related to
trafficking and unlicensed activity would still apply.
Who has the authority to reschedule marijuana?

Only the federal government can reschedule a controlled substance, and the
process is governed by administrative law.

The steps include:

1. A medical and scientific review by the Department of Health and Human
Services.
2. A proposed rule issued by the Drug Enforcement Administration.
3. A public comment period.
4. Administrative hearings (if requested).
5. A final rule published in the Federal Register.

An executive order can *direct agencies to act faster*, but it cannot
unilaterally change cannabis’s legal status.
Why is Schedule III so important for cannabis businesses?

The most immediate impact would be the elimination of *Internal Revenue
Code Section 280E*, which prevents businesses trafficking Schedule I or II
substances from deducting ordinary operating expenses.

Removing 280E would allow cannabis operators to deduct rent, payroll,
marketing, and other standard costs, dramatically improving cash flow and
financial stability.
What would change — and what wouldn’t — under Schedule III?

*Would change:*

- Federal recognition of accepted medical use.
- Eligibility for standard business tax deductions.
- Expanded medical and clinical research access.

*Would not change:*

- Federal legalization.
- State-by-state cannabis laws.
- FDA approval requirements for cannabis-derived drugs.

For answers to common questions, see our cannabis rescheduling FAQ.
How long could rescheduling take?

Even under expedited conditions, final rescheduling could take *months*,
not weeks. Legal challenges, administrative delays, or congressional
intervention could extend the timeline further.
Why this matters now

For the first time, all three branches of the federal process — the
Department of Health and Human Services, the Department of Justice (which
includes the DEA), and the White House — have publicly acknowledged
cannabis’s medical value. Whether that alignment survives political and
legal scrutiny remains the central question.