- The federal government just changed cannabis scheduling for the first time since 1970, and it raises more questions than it answers.
- Medical cannabis operators get real tax relief. Recreational consumers, home growers, and people in prison for cannabis offenses got nothing.
- This administration does not do anything unless someone with money benefits. Follow who was in the room.
On April 23, 2026, Acting Attorney General Todd Blanche signed an order moving state-licensed medical marijuana and any FDA-approved marijuana products from Schedule I to Schedule III of the Controlled Substances Act. For clarification, Schedule 1 is the same category as heroin, with no accepted medical use. This is the first time the federal government has changed the scheduling of cannabis since the Controlled Substances Act was passed in 1970. What it means in practice is more complicated than the headlines suggest, and a lot of what happens next is still an open question. And this administration does not do anything – not one thing – unless someone with a lot money stands to make more money because of it.
What Changed
Well, to start, rather than going through the standard multi-year DEA rulemaking process, Trump invoked an international drug treaty pathway that allows for a streamlined executive action. Some legal experts say it is defensible, yet anti-legalization groups like SAM claim the contrary, and that they are suing immediately.
State-licensed medical cannabis businesses can deduct ordinary business expenses from their federal taxes. Under IRS code Section 280E, any business selling a Schedule I substance is blocked from deducting rent, payroll, utilities, or any standard operating costs. For instance, the reason you don’t have health benefits as a budtender is likely because of 280E; without typical deductions and write-offs, tax rates may exceed 70 percent for some operators. That burden is lisfted, but ONLY for the medical side of the business. The order also opens the door for cannabis research using actual commercial products, rather than the genetically distinct marijuana supplied by the National Institute on Drug Abuse, which testing has shown to be vastly different from what patients actually consume.
What Did Not Change
Recreational cannabis remains Schedule I. If you are in an adult-use state, and you do not hold a state medical card, cannabis possession is still a federal crime. Interstate (between states) commerce is still illegal, and there is nothing in the order that address people currently in prison for cannabis offenses. This order does not decriminalize cannabis, does not create a legal path to recreational use, and does not seem to change what happens if federal law enforcement decides to act against a cannabis business in a legal state. And if home grows legality has popped in your head, just keep reading…
Unanswered Questions
The order raises more questions than it resolves. One question the order is completely silent on is home grow, and that silence may not be accidental. Nineteen states currently allow adults to grow cannabis at home in some form. The order does not address that, but what it DOES do is place state-licensed medical cannabis inside a Schedule III pharmaceutical framework. Under federal law, Schedule III substances must be manufactured at DEA-registered facilities operating under pharmaceutical-grade compliance standards. You cannot manufacture Schedule III drugs at home, just ask the folks in prison who tried.
Now, no one has explicitly said that this order makes home cultivation newly illegal, because technically home grow was already a federal offense regardless of schedule. The framework being built treats cannabis like a prescription drug, and you can’t manufacture prescription drugs at home. Nobody has said out loud that this order makes home growing newly illegal, but nobody has said it’s protected either. For the 19 states that allow home grow, the federal structure created by this order does not seem to account for them. Expect to hear more from advocates and attorneys about home grow in the coming weeks.
Other questions include states with combined medical and adult-use operations – like Michigan – that have dispensaries serving both sectors of the market. Whether the 280E relief applies to those mixed-use operators remains unclear. A new formal rescheduling hearing begins June 29 to address broader rescheduling of all cannabis. A final rule could come as early as July, but it would then be subject to a 30 to 90 day Congressional Review Act window before taking effect.
How It Happened
This action is unprecedented in method as well as outcome. Normally, rescheduling happens through an act of Congress or a formal multi-year rulemaking process involving the DEA, the FDA, and public comment periods. Trump bypassed that standard process by invoking an international drug treaty pathway that allows for a streamlined executive action. That shortcut is legally defensible according to cannabis law experts, but it is also the reason legal challenges from opponents are expected to have traction. The Biden administration started the rescheduling process in 2022, put it out for public comment in 2024, and watched it stall in the handoff between administrations. Trump issued an executive order directing the DOJ to expedite the process in December 2025 and publicly complained as recently as last weekend that federal officials were “slow-walking” it.
What to Watch
The June 29 hearing is the next major date. That process is set to determine whether all cannabis – not just state-licensed medical – moves to Schedule III. The Congressional Review Act clock, banking reform, interstate commerce, the unresolved mixed-use dispensary question and countless others are all still live issues. For cannabis workers, the 280E relief helps employer profitability, which is real. Whether it translates into better wages, benefits, or working conditions is a separate question that this order does not answer.
It is also worth knowing who was in the room. Trulieve CEO Kim Rivers and Palm Beach billionaire Howard Kessler leveraged personal ties, fundraisers, and political spending to press the White House. Trulieve, the United States Cannabis Council, and the American Rights and Reform PAC collectively donated at least $2 million to Trump-linked political committees after the 2024 election, with the cannabis industry spending over $3.2 million on lobbyists in the lead-up to this order. Rivers was in the Oval Office when Trump signed the December executive order. She was among the first to issue a statement when rescheduling finally happened. This administration does not pick up the phone for free.
More to consider: what happens to cannabis workers who work for a licensed medical company? Check back next week for a closer look at how rescheduling can affect workers in legal states.
Sources: Marijuana Moment — DOJ rescheduling announcement · DOJ official press release · NPR — marijuana rescheduling explainer · CNN — DOJ reclassifies medical marijuana · High Times — what rescheduling does and does not do · Your News — 280E and financial impact · Reason.org — historic but questions remain · Zuber Lawler — Schedule III pharmaceutical framework · Duane Morris — legal analysis of the order · CNBC — lobbying and dealmaking behind the order · Washington Examiner — cannabis industry spending · Congressional Research Service — legal consequences of rescheduling
