DEA Reschedules Cannabis to Schedule III, Expanding Research and Industry Impact

The U.S. Drug Enforcement Administration announced that cannabis will be moved from Schedule I to Schedule III, following Attorney General Todd Blanche’s April order. The reclassification, slated for a hearing later this month, is intended to remove research barriers, allowing scientists to study actual medical‑marijuana products and develop dosing guidance and new formulations such as time‑release therapies.

For the cannabis industry, the shift means medical‑marijuana sales will no longer be subject to IRS Section 280E, letting companies deduct standard business expenses. However, the change applies only to medical cannabis, and Canadian firms such as Canopy Growth see limited immediate benefit because export permits remain tightly restricted and the company’s U.S. affiliate is not fully consolidated.

Overall, the policy move is expected to modestly boost research and product development while having a muted short‑term financial impact on most cannabis businesses.