Cannabis
The marijuana rescheduling is at a hearing, not at a decision
On 28 April 2026 the DEA terminated the hearing proceedings it had begun in 2024 on the proposed rescheduling of marijuana to Schedule III, and noticed a fresh hearing beginning 29 June 2026 (Docket DEA-1362). The proposed rule itself stands. Marijuana remains in Schedule I.
The proposal to move marijuana from Schedule I to Schedule III of the Controlled Substances Act was published as a notice of proposed rulemaking on 21 May 2024 (89 FR 44597). This April 2026 document is a notice of hearing in that same proceeding, issued under Attorney General Order No. 6753-2026, and the DEA states it is completing the process in the most expeditious manner in accordance with federal law and Executive Order 14370.
The same issue of the Federal Register carries a withdrawal. Under Attorney General Order No. 6752-2026 the DEA withdrew the notice of hearing it had published on 29 August 2024 (89 FR 70148) and terminated the hearing proceedings related to it, saying that the most expeditious way to complete the rulemaking was to terminate those proceedings and begin new ones. The proposed rule itself was not withdrawn. That is why a person who had already asked to participate had to ask again.
Anyone wishing to participate in the hearing had to give written notice on or before 28 May 2026. The DEA specified that requests had to be submitted within that window regardless of whether the person had previously requested a hearing in response to the 2024 proposed rule, or had responded to the August 2024 notice of hearing.
Both dates have now passed. What matters for an operator is the position in the meantime: the schedule is unchanged, and the consequences that follow from Schedule I status — including the treatment of business expenses under section 280E of the Internal Revenue Code — continue to apply while the rulemaking runs.
What changed
The 2024 hearing was withdrawn and terminated, and a new hearing was noticed in its place, with a fresh window to ask to take part.
What did not change
The schedule. Marijuana remains a Schedule I controlled substance, and it stays there unless and until a final rule says otherwise.
Who this reaches
Cannabis operators and their investors, in the sense of planning rather than filing — the participation deadline of 28 May 2026 has passed. The useful work is knowing which parts of a structure or a model are premised on the schedule changing, and which hold either way.
Common questions
Has marijuana been rescheduled?
No. It remains in Schedule I of the Controlled Substances Act. The move to Schedule III was proposed in a notice of proposed rulemaking published on 21 May 2024 and the proceeding is still running; the April 2026 document set a hearing beginning 29 June 2026.
Does Schedule III status change the tax position?
Section 280E of the Internal Revenue Code denies deductions and credits for a trade or business trafficking in controlled substances within Schedule I or II. A move to Schedule III would take marijuana outside that description, which is why the proceeding is watched closely. Nothing has changed while marijuana remains in Schedule I, and the effect on any particular business is a question for its tax advisers on its own facts.
Can we still take part in the hearing?
No. Written notice of desired participation had to be provided on or before 28 May 2026, and the DEA specified that the deadline applied even to those who had already asked to participate at earlier stages of the proceeding.
Does this reach your business?
Every matter turns on its facts. Mr. Sheehan reviews each inquiry himself.