Top 5 Things to Know About the June 29 DEA Cannabis Rescheduling Hearing

The Drug Enforcement Administration is scheduled to hold a historic hearing beginning Monday, June 29, 2026, which could extend Schedule III cannabis rescheduling to adult-use marijuana and reshape the federal regulatory landscape for the industry.

While the April 2026 Final Order reclassified both FDA-approved marijuana products and state-licensed medical cannabis from Schedule I to Schedule III under the Controlled Substances Act (CSA), it left the remainder of cannabis (i.e., adult-use marijuana) in Schedule I. This hearing addresses the rest of the cannabis plant and the outcome carries significant implications for cannabis businesses and the broader domestic and international cannabis industry.

This cannabis rescheduling process has occurred over the course of two administrations, multiple federal agencies and significant legal and political headwinds. For a full timeline of how we got here, see our Cannabis Rescheduling Explained post.

Here are the five things to know about the upcoming DEA hearing on adult-use cannabis rescheduling!

1. The June 29 Hearing Could Reclassify All Marijuana to Schedule III

At the center of the proceeding is the DEA’s May 2024 Notice of Proposed Rulemaking, which proposed moving all botanical marijuana, including adult-use marijuana, from Schedule I to Schedule III.

Chief Administrative Law Judge Derek C. Julius (ALJ) will preside over the hearing, formally evaluate the scientific data and determine whether the marijuana plant satisfies the statutory criteria for Schedule III, including having accepted medical use and a lower potential for abuse relative to substances in Schedule I or II, such as heroin and Fentanyl.

Science and law appear to be on our side. The ALJ’s evaluation will be anchored by the Department of Health and Human Services (HHS) and the Food and Drug Administration (FDA), which have concluded, based on rigorous scientific reviews, that marijuana meets these exact Schedule III criteria.

To reach this conclusion, FDA conducted a comprehensive evaluation of the eight statutory factors required under 21 U.S.C. § 811(c), which are:

1. The drug’s actual or relative potential for abuse
2. Scientific evidence of its pharmacological effects
3. The state of current scientific knowledge regarding the drug
4. Its history and current pattern of abuse
5. The scope, duration, and significance of abuse
6. The risk, if any, to public health
7. Its psychic or physiological dependence liability
8. Whether the substance is an immediate precursor to an already-controlled substance.

As the agency proposing the rule, the Government bears the burden of proving by a preponderance of the evidence that marijuana meets the three final legal requirements for Schedule III (found in 21 U.S.C. § 812(b)):

• It has a currently accepted medical use in treatment in the United States
• It has a potential for abuse less than the drugs or other substances in Schedules I and II
• Its abuse may lead to moderate or low physical dependence or high psychological dependence.

To prove those three final requirements, the Government must present a strong factual record evaluating eight specific categories of scientific and medical evidence under 21 U.S.C. § 811(c), which serves as a mandatory checklist of the drug’s risks, history, and pharmacological effects.

To get the Administrative Law Judge (ALJ) to recommend against rescheduling, opponents like Smart Approaches to Marijuana (SAM) cannot just point to generalized public health concerns about cannabis. Instead, they would have to introduce enough contrary scientific evidence against the Government’s eight-point checklist (§ 811(c)) to prevent the Government from successfully proving the three final Schedule III requirements (§ 812(b)).

Ultimately, if the opponents successfully inject sufficient doubt into the evidentiary record, or if the Government fails to make a convincing case on its own, the ALJ can recommend against reclassification.

2. Hearing Schedule and Timeline

The hearing begins June 29, 2026, at 9:00 a.m. ET at the DEA Hearing Facility in Arlington, Virginia. It is expected to conclude no later than July 15, 2026, with a recess July 3-6 for the July 4 holiday. The ALJ will preside over the hearing with broad authority to issue subpoenas, examine witnesses, limit repetitive evidence and rule on procedural matters.

At the conclusion of the hearing on July 15, the three-step process unfolds as follows:

• No live closing arguments will occur. Instead, the Designated Parties will submit formal briefs after the hearing, summarizing their arguments and evidence.
• Following a review of the evidence and briefs, the ALJ will issue a formal decision and recommendation on whether the remaining marijuana plant parts qualify for Schedule III.
• ALJ’s recommendation is forwarded to the DEA Administrator, who will evaluate it along with the evidence, public comments, and the FDA’s scientific and medical assessment. If rescheduling is deemed appropriate, the DEA will publish a Final Rule in the Federal Register, officially changing adult-use marijuana’s scheduling status.

While the President’s Executive Order #14370 directed the DEA to complete this rulemaking process in the “most expeditious manner” possible, the exact timeline remains uncertain. If the DEA meets its burden of proof and the process proceeds efficiently, we could see a Final Rule published in the next year. However, formal administrative hearings can be protracted.

For example, during a previous DEA scheduling hearing for cannabis in the 1980s, it took two years after the hearing for the judge to issue a recommendation, and another two years before the DEA published its final order. ALJ Francis Young ultimately recommended rescheduling, famously concluding that marijuana was “one of the safest therapeutically active substances known to man,” only for the DEA Administrator to reject that recommendation entirely, a reversal the D.C. Circuit upheld in 1994. From the opening of hearings to the DC Circuit Court ruling, the process took nearly a decade.

Any rescheduling will certainly be contested, which could significantly extend the timeline for a resolution. SAM and the Attorneys General of Indiana and Nebraska have already filed in the U.S. Court of Appeals for the D.C. Circuit, challenging the April 2026 order rescheduling state-licensed medical cannabis, proceedings the Court has consolidated into a single proceeding. That challenge is distinct from, and does not affect, the broader rescheduling proceeding before the ALJ.

The current proceeding is structurally different in ways that favor a faster resolution. President Biden directed the scheduling review in October 2022; HHS completed its scientific evaluation and recommended Schedule III by August 2023; and President Trump’s December 2025 Executive Order directed the DEA to complete rescheduling in the “most expeditious manner” possible.

Unlike the 1980s proceeding, where the government actively opposed rescheduling and the Administrator ultimately overruled his own ALJ, the federal government here is the proponent of rescheduling, making an internal reversal that derailed the prior effort essentially unlikely.

3. Interested Persons and Participants at the Hearing

This formal evidentiary proceeding is limited to recognized “interested persons” or parties who are adversely affected or aggrieved by the proposed rule and were approved to participate by the DEA Administrator. Parties seeking to participate were required to file a written notice of intent stating their specific interest, objections or issues, and position on the proposed rescheduling.

Following an analysis of those applications, the DEA Administrator officially certified a final, closed list of seven formally designated “Interested Parties” composed of prohibitionist organizations, individuals and state entities that have historically opposed further rescheduling including Smart Approaches to Marijuana (SAM), DUID Victim Voices, the National Drug & Alcohol Screening Association, the Tennessee Bureau of Investigation, two individual medical professionals Kenneth Finn, M.D., and Phillip A. Drum, PharmD, and the States of Nebraska, Idaho, Indiana and Louisiana.

4. Treaties Matter: International Drug Treaties and Adult-Use Rescheduling

The United States is bound by the 1961 Single Convention on Narcotic Drugs, which requires signatory nations to limit marijuana to medical and scientific purposes, license manufacturers, set production quotas and maintain government control over wholesale trade. This treaty framework supporting adult-use cannabis is being handled differently from medical marijuana in the rescheduling process. When the DOJ rescheduled medical marijuana, it relied on 21 U.S.C. § 811(d)(1), a provision allowing the Attorney General to bypass standard administrative hearings and unilaterally schedule a drug if necessary to meet international treaty obligations.

As the Vicente LLP Treaty Memorandum co-authored by Porter Wright points out, this was not the first time the DEA used this treaty shortcut for cannabis. In 2018, the DEA relied on 21 USC § 811(d)(1) to move Epidiolex. This FDA-approved, cannabis-derived CBD drug, which was legally qualified as marijuana at the time, was removed from Schedule I and rescheduled into Schedule V. This Epidiolex decision set a crucial precedent that the DEA could reschedule a marijuana product to a less restrictive schedule and simultaneously amend its regulations to satisfy international treaty obligations without violating the Single Convention.

Since the Single Convention explicitly permits medical use, it offered a fast path to Schedule III for medical marijuana. The rescheduling of adult-use marijuana is proceeding through the standard 21 U.S.C. § 811(a) hearing process now underway. This standard pathway requires providing the public with a notice of proposed rulemaking, a public comment period, and the opportunity for a formal administrative hearing before an Administrative Law Judge.

Opponents are expected to argue the Single Convention prohibits moving adult-use cannabis out of Schedule I or II at all. However, as detailed in the proponents possess two powerful legal defenses to justify moving all cannabis to Schedule III:

• Under the Tenth Amendment’s anti-commandeering doctrine, the federal government cannot constitutionally force states to dismantle their existing legal adult-use markets or compel state police forces to enforce federal cannabis prohibition.
• Vicente emphasizes the treaties’ core animating purpose of promoting the public health, safety, and welfare of humankind. As the Vicente memo notes, countries like Canada and Uruguay have already successfully relied on this exact harm-reduction argument, demonstrating that regulated markets are superior to prohibition in protecting public health. DEA can rely on these same constitutional and public health grounds to legally justify moving adult-use cannabis to Schedule III under the treaties.

5. What a Favorable or Unfavorable Ruling Would Mean for Cannabis Businesses

280E Tax Relief for Cannabis Businesses

A favorable outcome would provide relief from the IRS Section 280E tax penalty for adult-use operators and dual-licensees, which has long barred cannabis businesses from deducting ordinary business expenses due to marijuana’s Schedule I status. Rescheduling would also eliminate the compliance burden faced by businesses operating in both medical and adult-use markets, which currently must navigate the complexities of selling a single substance that is scheduled in both I and III by the federal government. A unified Schedule III framework would meaningfully simplify that landscape and bring the industry closer to operating like any other regulated business.

If the outcome is unfavorable or the Administrative Law Judge’s recommendation is contested, the current bifurcated system is likely to persist, at least in the near term. A negative or partial recommendation would almost certainly be appealed or face further litigation, extending the timeline for resolution. Under this scenario, the industry would remain starkly split and medical cannabis would continue moving forward under a fundamentally different federal regime with Schedule III protections and 280E tax relief, while adult-use operators and intoxicating hemp products remain in Schedule I.

Impact on State Cannabis Programs and Interstate Commerce

In a historic show of deference to state operators, the DEA’s Final Order officially accepts state-authorized medical marijuana certifications instead of traditional federal prescriptions, provided they meet certain minimum criteria, such as including the patient’s name, address, and the issuing practitioner’s information. Furthermore, the DEA allows registrants to rely heavily on existing state-law requirements for physical security, labeling, packaging, and disposal; however, operators must comply with certain federal requirements. States that do not currently allow cannabis sales will not see a significant shift, though it remains possible that specific, future FDA-approved cannabis products could eventually become available in pharmacies within those prohibition states.

While a Schedule III DEA registration establishes a federal baseline that makes transporting medical cannabis across state lines theoretically possible, the Final Order does not explicitly authorize interstate commerce. Because the DEA’s expedited registration pathway strictly limits a federal registrant’s activities to the scope of their state license, any state-level ban on import or export effectively blocks interstate commerce for that operator. Interstate commerce of non-FDA-approved drugs still faces hurdles under the Federal Food, Drug, and Cosmetic Act.

Impact on Hemp and Intoxicating Hemp Products

If the ALJ successfully recommends moving all botanical marijuana to Schedule III, its impact on intoxicating hemp products would depend entirely on how they are manufactured. Under the DOJ’s April 2026 Final Order, synthetically derived THCs such as Delta-10 or chemically converted Delta-8 are not reached and remain in Schedule I.

Taking effect November 2026, naturally derived hemp products that exceed the new federal THC threshold of 0.4mg of total THC per container will revert to the statutory definition of marijuana. If all botanical marijuana is rescheduled, these naturally derived products would indeed land in Schedule III rather than Schedule I. While Schedule III status would save these naturally derived products from being classified as Schedule I narcotics, it would force operators to obtain federal DEA registrations to remain compliant with the Controlled Substances Act.

The complete reclassification of botanical marijuana to Schedule III (encompassing both medical and adult-use sectors) permanently removes Section 280E tax liability and establishes a federal regulatory system under the DEA. However, this administrative shift only resolves the Controlled Substances Act (CSA) equation; marijuana remains highly controlled under Schedule III, and unauthorized manufacture, distribution, and possession remain federal crimes.

What Cannabis Rescheduling Cannot Do

Rescheduling does not alter the severe quantity-based mandatory minimum sentences for marijuana trafficking. Mainstream consumer channels, such as grocery stores and big-box chains, cannot legally stock or sell Schedule III controlled substances over the counter. Under the CSA, Schedule III substances generally require a prescription or valid medical certification. Most cannabis products will remain in violation of the Federal Food, Drug, and Cosmetic Act (FDCA).

Under federal food and drug law, botanical cannabis and other traditional dispensary products remain an “unapproved new drug.” As an “unapproved new drug,” they cannot lawfully enter traditional interstate commerce. Although the FDA has historically exercised enforcement discretion regarding cannabis where companies comply with state law and do not pose severe public health risks, the next immediate phase of this market will inevitably rely on inter-agency federal enforcement guidance to navigate these ongoing restrictions.

The Road to True Cannabis Legalization

Combined with the elimination of Section 280E tax liability and a DEA registration framework that legitimizes state medical programs, Schedule III validates cannabis as medicine.

To deschedule cannabis entirely, authorize botanical products in traditional general commerce, resolve the underlying FDCA barriers and achieve true nationwide legalization, an act of Congress remains necessary. Rescheduling, however, is widely expected to catalyze exactly that.

With Schedule III as a foundation, Congress is now positioned to act on a range of proposals that had previously stalled under Schedule I’s political and legal weight. Rescheduling does not guarantee the passage of any of these proposals, but it removes the single largest political, cultural and legal obstacle that has blocked congressional action for decades, empowers clinical research, unlocks the medical establishment and signals that the federal government’s posture toward cannabis has fundamentally shifted.