DOJ Moves State-Licensed Medical Marijuana to Schedule III, Launches DEA Registration

Overview

• Justice Department’s final order reclassifies FDA‑approved cannabis drugs and marijuana sold under state medical licenses to Schedule III, while recreational and unlicensed products remain prohibited under federal law.
• The order took effect upon Federal Register publication and directs the DEA to register state‑licensed medical operators, with a live dispensary application portal and marijuana‑specific applications for manufacturers, distributors, and labs set to follow.
• Opposition has begun in court as Smart Approaches to Marijuana and the National Drug and Alcohol Screening Association petitioned the D.C. Circuit to set aside the order, and a House subcommittee advanced a funding rider that would block DOJ rescheduling if it becomes law.
• Treasury and the IRS said guidance is coming and expect significant positive tax effects for eligible businesses, including clarity on how Section 280E limits apply and a transition rule tied to the tax year that includes the order’s effective date.
• DEA scheduled an expedited hearing in late June to weigh broader rescheduling of marijuana, while agencies such as the Department of Transportation have not updated drug‑testing rules, leaving employers uncertain about policy changes.