DEA Nears Decision on Marijuana Rescheduling to Schedule III

The U.S. Drug Enforcement Administration is concluding its hearings on moving marijuana from Schedule I to Schedule III of the Controlled Substances Act. The hearings, which wrapped up on July 15, gave parties until August 17 to file final briefs, after which an administrative law judge will issue a recommendation and the DEA administrator will decide.

If the DEA approves the change, marijuana would be recognized as having accepted medical use, eliminating the federal tax penalty imposed by IRS Section 280E on cannabis businesses. The shift could lower tax burdens, encourage investment, and ease research restrictions for conditions such as chronic pain, epilepsy, PTSD, multiple sclerosis and cancer‑related symptoms. The decision would not legalize recreational use, leaving state laws unchanged.

Legal challenges to a prior medical‑marijuana rescheduling order remain pending, with plaintiffs arguing the process violated the Administrative Procedure Act. The outcome of those challenges could affect the standing of the current rescheduling effort.