Marijuana Rescheduling Explained: The Schedule III Timeline and What Comes Next

Federal marijuana rescheduling is no longer a single yes-or-no decision. In 2026 it split into two tracks: state-licensed medical cannabis has already been moved to Schedule III, while a separate DEA proceeding decides whether the rest of the market, including adult-use, follows.

This guide explains where each track stands, the key dates, and what Schedule III does and does not change for cannabis businesses. We update it as the process moves.

Where rescheduling stands today

As of early October 2026:

Medical cannabis is in Schedule III. A Justice Department order on April 23, 2026 moved FDA-approved marijuana products and marijuana handled under qualifying state medical licenses to Schedule III. That order remains in effect.
Broader rescheduling is on hold. The DEA’s administrative proceeding on moving all marijuana to Schedule III was stayed on September 29 while the judge considers adding a new Government Accountability Office report to the record. The government’s response is due October 13. That is a filing deadline, not a decision date.
Adult-use marijuana remains Schedule I until the broader proceeding concludes and the DEA Administrator issues a final rule.

The rescheduling timeline

October 2022: President Biden directs HHS and the Justice Department to review marijuana’s federal scheduling.
August 2023: HHS recommends moving marijuana to Schedule III, finding it has a currently accepted medical use.
May 2024: The Justice Department publishes a proposed rule to move marijuana to Schedule III.
January 2025: A DEA hearing on the proposed rule is postponed before testimony begins.
December 18, 2025: President Trump signs an executive order directing the Attorney General to complete the Schedule III rulemaking.
April 23, 2026: The Justice Department moves state-licensed medical cannabis and FDA-approved marijuana products to Schedule III and orders the broader proceeding to continue.
June 29 – July 15, 2026: The DEA holds an 11-day administrative hearing before Chief Administrative Law Judge Derek Julius. See every key hearing date and our takeaways from Part 1 and Part 2.
August 17, 2026: Post-hearing briefs are due. The DEA files its closing argument for Schedule III.
September 9, 2026: The D.C. Circuit declines to suspend the April medical order while legal challenges proceed.
September 29, 2026: Judge Julius stays the proceeding; the government must respond by October 13.

Two tracks: medical vs. adult-use

The April 2026 order created a split that matters more for businesses than any single headline.

Medical (already Schedule III). Qualifying state-licensed medical operations are now handling a Schedule III substance. The most immediate effect is relief from Section 280E of the tax code going forward. The order also opened a DEA registration process for medical operators, a step attorneys say could reshape interstate commerce and compliance. Read more on the questions operators raised after the order.

Adult-use (still Schedule I). Recreational marijuana stays in Schedule I until the broader proceeding ends. Companies with both medical and adult-use licenses are weighing whether to separate those operations to capture Schedule III benefits now, which in some states requires regulators to change licensing rules.

What the DEA hearing decides, and what it doesn’t

The hearing builds the official record. It does not reschedule marijuana by itself.

Judge Julius reviews the record and issues a recommended decision. There is no deadline for it.
The DEA Administrator, currently Terry Cole, decides whether to adopt, modify or reject the proposed rule.
Any final rule is likely to face litigation.

Every outside participant designated for the hearing opposed rescheduling; reform advocates were not admitted as parties. The DEA itself argued for Schedule III, relying on HHS’s finding that marijuana has a currently accepted medical use.

What Schedule III changes for cannabis businesses

Taxes. Section 280E bars businesses trafficking in Schedule I or II substances from deducting ordinary business expenses. Schedule III takes a business out of 280E going forward. See our explainer on Section 280E and Schedule III.
Capital markets. Rescheduling has accelerated U.S. exchange listings. Trulieve became the first U.S. operator to uplist to the NYSE, and Glass House followed.
Advertising and research. Schedule III could open channels that have been closed to cannabis, from mainstream ad platforms to clinical research.

What Schedule III does not change

It is not federal legalization. Marijuana stays a controlled substance, and state-regulated adult-use sales would still conflict with federal law.
It does not automatically refund past 280E taxes. The government is suing to recover a 280E refund it issued to TerrAscend.
It does not resolve banking on its own; SAFE Banking-style protections require Congress.

What to watch next

October 13: the government’s response on the GAO report.
Judge Julius’s recommended decision, and whether the stay pushes completion into 2027. One analyst estimates a final outcome could slip to the third quarter of 2027 (market reaction here).
The D.C. Circuit challenge to the April medical order, which could still reverse Schedule III for medical cannabis.
Treasury guidance on whether any retrospective 280E relief will be offered.

Frequently asked questions

Is marijuana Schedule III now?

Partly. State-licensed medical marijuana and FDA-approved marijuana products have been in Schedule III since April 2026. All other marijuana, including adult-use, remains Schedule I while the DEA proceeding continues.

When will the DEA decide on full rescheduling?

There is no set date. The proceeding was stayed on September 29, 2026, and the judge’s recommendation has no deadline. The DEA Administrator makes the final decision after that.

Does Schedule III legalize marijuana?

No. Schedule III keeps marijuana federally controlled. It mainly changes tax treatment, research rules and how the federal government regulates medical products.

Does Schedule III end Section 280E?

For businesses handling a Schedule III substance, yes, going forward. Today that covers qualifying medical operations. Adult-use businesses remain subject to 280E until broader rescheduling is final.

IgniteIt covers every development in federal cannabis policy. Follow our rescheduling coverage for updates.