Trump Administration Advances Marijuana Rescheduling to Schedule III
Summary
On April 23, 2026, Acting Attorney General Todd Blanche signed an order reclassifying state-licensed medical marijuana from Schedule I to Schedule III under the Controlled Substances Act (CSA). The order covers FDA-approved marijuana products and state-licensed medical marijuana operating in 40 states, effective immediately. An expedited administrative hearing is scheduled for June 29 to consider broader rescheduling. The change removes Section 280E restrictions, allowing qualifying businesses to deduct standard operating expenses, and directs the Treasury secretary to consider retroactive 280E relief.
“On April 23, President Donald Trump's acting attorney general, Todd Blanche, signed an order reclassifying state-licensed medical marijuana from Schedule I to Schedule III under the Controlled Substances Act (CSA).”
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What changed
This JD Supra legal analysis reports that the Trump administration advanced marijuana rescheduling by signing an order on April 23, 2026, reclassifying state-licensed medical marijuana from Schedule I to Schedule III under the Controlled Substances Act. The action covers FDA-approved products and state-licensed medical marijuana in the 40 states where such programs operate, removing the federal tax deduction barrier under Section 280E and directing consideration of retroactive tax relief. The order leaves adult-use cannabis unaddressed and defers broader systemwide reclassification to a separate administrative process with a June 29 hearing.\n\nAffected parties including medical marijuana businesses, pharmaceutical companies with cannabis-derived products, and researchers should monitor the expedited administrative process for further federal reclassification. Businesses operating under state medical marijuana licenses may now claim standard operating expense deductions under the CSA Schedule III classification, though banking access and exchange listing restrictions remain without congressional action on the SAFE Banking Act or CLIMB Act.
Archived snapshot
Apr 27, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
April 27, 2026
Trump Administration Advances Marijuana Rescheduling
On April 23, President Donald Trump’s acting attorney general, Todd Blanche, signed an order reclassifying state-licensed medical marijuana from Schedule I to Schedule III under the Controlled Substances Act (CSA). While this action does not legalize cannabis federally, it marks a major shift in how the federal government treats medical marijuana and follows months of delay in implementing the president’s earlier directive to reschedule marijuana.
The order immediately reclassifies state-licensed medical marijuana and Food and Drug Administration (FDA)-approved products containing marijuana, while also accelerating the broader administrative process to consider full rescheduling, with an expedited administrative hearing scheduled for June 29. In doing so, the administration has effectively moved forward on a portion of rescheduling while leaving the more complex, systemwide reclassification to a separate process.
Background
This development builds on a process first initiated under the Biden administration in 2022, when federal agencies were directed to conduct a scientific and legal review of marijuana’s classification. The Department of Health and Human Services (HHS) issued a formal recommendation in August 2023 supporting a move to Schedule III, recognizing marijuana’s accepted medical use and lower potential for abuse relative to Schedule I substances.
In December 2025, President Trump signed an executive order directing the Department of Justice (DOJ) to move forward with rescheduling. Despite these steps, the process stalled for much of the past year. On April 18, President Trump directly expressed frustration with the pace of the process, urging his administration to complete rescheduling after what he described as months of “slow walking.” Acting Attorney General Blanche framed the April 23 decision as delivering on the president’s directive to expand research and improve patient access.
What the Order Does
The policy covers only two categories of marijuana products: those approved by the FDA and those regulated under a state medical marijuana license. By shifting medical marijuana to Schedule III, the administration is formally acknowledging the legitimacy of state medical programs, which now operate in 40 states. The change is expected to ease long-standing barriers to research, clarify that researchers may use state-licensed cannabis without federal penalty, and establish a pathway for medical marijuana operators to register with the Drug Enforcement Administration (DEA).
It also has immediate financial implications, allowing qualifying businesses to deduct standard operating expenses under the federal tax code by removing the application of Section 280E. The order also directs the secretary of the treasury to consider retroactive relief from Section 280E liability for taxable years in which a marijuana business operated within a state-legal medical marijuana program.
Notably, it remains unclear how financial institutions and other third parties will adapt to marijuana’s reclassification to Schedule III. Absent enactment of the Secure and Fair Enforcement (SAFE) Banking Act, the Capital Lending and Investment for Marijuana Businesses (CLIMB) Act, or similar legislation, marijuana companies are likely to continue facing restricted access to banking and credit and will remain ineligible for listing on major U.S. stock exchanges.
What’s Next
While significant on its own, the order leaves key questions unresolved. It does not address adult-use cannabis and provides limited clarity on how federal regulators will treat products in states where medical and adult-use markets are intertwined. The broader rescheduling process, now set for a June administrative hearing, will be critical in determining whether the federal government ultimately moves toward full reclassification.
Significant uncertainty also remains around implementation. The role of the DEA in carrying out the broader rescheduling process is still unclear, and questions persist regarding how the Food and Drug Administration (FDA) will approach regulation of marijuana products under a Schedule III framework. These issues, along with potential political opposition and litigation risk, could shape both the timeline and ultimate scope of reform.
Bottom Line
Although not a full legalization measure, this action represents one of the most consequential federal cannabis policy shifts in decades. It signals a continued move toward aligning federal policy with state-level legalization trends, even as critical regulatory and legislative questions remain unresolved.
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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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Brownstein Hyatt Farber Schreck
2026
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