Short answer
Cannabis remains a Schedule I controlled substance under the Controlled Substances Act. The Drug Enforcement Administration has not issued a final rule. A proposed rule from May 2024 is still open. No date is set for a decision, and the pending hearing schedule is not fixed.
Understanding DEA Schedule III Cannabis Implications
What the schedule numbers mean
Schedule I covers drugs with no accepted medical use and high abuse potential. Schedule III covers drugs with accepted medical use and moderate to low physical dependence risk. Ketamine and anabolic steroids sit in Schedule III.
cannabis rescheduling update news
Cannabis has been in Schedule I since Congress passed the Controlled Substances Act in 1970.
Timeline of the rescheduling process
- October 2022: President Biden asked the Department of Health and Human Services and the Department of Justice to review federal cannabis scheduling.
- August 2023: HHS finished its review and recommended Schedule III. The agency cited accepted medical use.
- May 2024: DEA published a notice of proposed rulemaking in the Federal Register. The notice proposed moving cannabis from Schedule I to Schedule III.
- July 2024: The public comment period closed. DEA logged more than 40,000 comments.
- Late 2024 through 2025: DEA set evidentiary hearings before an administrative law judge. DEA gave designated participant status to supporters and opponents of the change. Dates moved more than once.
What Schedule III would change
- Section 280E of the Internal Revenue Code would stop applying. That rule denies deductions and credits to businesses that traffic in Schedule I or Schedule II substances. Cannabis operators now pay federal tax on gross income. Schedule III would end that treatment.
- Research would get easier. Schedule I registration adds steps for studies.
- DEA quotas, recordkeeping rules, and registration duties would remain.
What Schedule III would not change
- Adult-use sales would stay illegal under federal law. Schedule III drugs need FDA approval and a prescription to be dispensed.
- Moving state-legal cannabis across state lines would stay prohibited without federal registration.
- Possession would remain a federal offense. Penalties are lower for Schedule III than for Schedule I.
- State licensing systems would stay in place. No state law changes because of a federal reclassification.
State law today
24 states and the District of Columbia allow adult use. Most states allow some form of medical cannabis. These programs run on state law. Federal law still lists the plant in Schedule I.
When Will Cannabis Be Rescheduled? A Guide to the Federal Timeline
What happens next
The DEA administrator has to sign a final rule. That rule then goes through review. Congress can act on its own. Several bills would remove cannabis from the Controlled Substances Act or move it to Schedule III by statute. None has passed.
Court challenges are likely after any final rule. The status date of the next hearing and the date of any final order are not public.
Common questions
Is cannabis Schedule III now?
No. It is Schedule I.
When will DEA decide?
No date is set. The proposed rule has no deadline.
Does rescheduling legalize cannabis?
No. It would not create a legal adult-use market. It would not end federal criminal liability for unapproved sales.
Would rescheduling fix banking access?
Banks weigh federal illegality when they take cannabis accounts. Schedule III would lower some risk but would not create a safe harbor. No federal law gives cannabis businesses banking protection.
Would rescheduling lower taxes?
Yes, in most readings of the tax code. Section 280E applies to Schedule I and II substances. Moving to Schedule III would remove that limit. Congress would have to change the statute to keep it.