Thought Leaders: Reclassification of marijuana as a Schedule III drug postponed indefinitely

Marijuana is currently classified as a Schedule I drug under the federal Controlled Substances Act (Act) along with heroin, LSD, and ecstasy. In 2024, the Drug Enforcement Administration (DEA) requested that marijuana be transferred from Schedule I to Schedule III under the Act. Schedule III drugs are those with a moderate to low potential for physical and psychological dependence. This article discusses the DEA’s request to reclassify marijuana as a Schedule III drug, why rescheduling matters, why the request has been postponed, and what happens next.

During his tenure in office, President Biden asked the Department of Health and Human Services (HHS) to initiate the administrative process to review how marijuana is scheduled under federal law. HHS did as the President requested, finding that marijuana has a potential for abuse less than the drugs or other substances in Schedules I and II and that the abuse of marijuana may lead to moderate or low physical dependence or high psychological dependence, corresponding to classification as a Schedule III drug. The DEA then published a notice of proposed rulemaking, requesting to transfer marijuana from Schedule I to Schedule III. 

If approved, rescheduling could impact the business community in a variety of ways. As a Schedule III drug, marijuana would, for the first time, be recognized by the federal government as having medicinal purposes and a lower potential for abuse than a Schedule I or II drug. In addition, rescheduling would allow physicians to prescribe marijuana under federal law which would open the door for funding and research and encourage pharmaceutical companies to enter the market to create and sell new cannabis products. Medical marijuana operators may also realize tax benefits under Schedule III reclassification. It is important to note, however, reclassification would not change the criminal laws applicable to recreational marijuana users or operators.

The DEA’s rescheduling request has been mired in criticism. The DEA scheduled an evidentiary hearing to receive factual evidence and expert opinion on rescheduling, but a group of pro-rescheduling participants objected to the DEA’s role in the hearing, seeking to have the DEA disqualified based on alleged conflicts of interest and ex parte communications with the opposition. An Administrative Law Judge (ALJ) denied that request, prompting the pro-rescheduling participants to ask the ALJ to reconsider his ruling or allow the ruling to be appealed. The ALJ denied the request for reconsideration but granted the request to file an appeal. The ALJ then cancelled the hearing set to commence on January 21, 2025, pending resolution of the appeal.

As a result, the appeal must be decided before the rescheduling request can proceed. It also unknown what stance the Trump Administration will take on the issue. 

If you have questions about the proposed rescheduling, contact BHGR’s Cannabis Group today. 

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