Overview
- The Drug Enforcement Administration began a formal administrative hearing on June 29 to review its May 21 proposal to move recreational cannabis from Schedule I to Schedule III, with the session scheduled through July 15.
- Because the DEA originated the proposal it is the proponent in the hearing, and the administrative law judge limited live testimony to groups opposing rescheduling, a decision that reform advocates and industry groups have sharply criticized.
- The judge also rejected calls to livestream the proceedings, leaving the record to written filings and in-person testimony and increasing concerns about transparency from advocates and companies.
- Moving cannabis to Schedule III would likely remove the application of Internal Revenue Code section 280E that blocks ordinary business deductions, which could reduce tax burdens for many cannabis firms and affect banking access and research opportunities, though concrete changes await detailed guidance from federal agencies.
- The broader rescheduling effort follows the DOJ’s April order that already reclassified FDA-approved marijuana drugs and state medical programs to Schedule III, and the final practical effects will depend on the outcome of the DEA hearing and ongoing D.C. Circuit court challenges.