April 27, 2026
On April 23, 2026, as we discussed in our prior client alert, the Department of Justice issued a Final Order immediately placing cannabis “subject to a state medical marijuana license” in Schedule III of the Controlled Substances Act. The Order also directed the DEA to restart formal administrative rulemaking proceedings to consider the broader rescheduling of all cannabis from Schedule I to Schedule III. As we noted, the immediate practical implications were significant.
In the days since that announcement, several important developments have followed from the federal government, as outlined below.
Publication in the Federal Register
On April 27, 2026, three documents related to the rescheduling appeared on the Federal Register's public inspection page, with formal publication scheduled for April 28, 2026. Under the Final Order, the effective date of the rescheduling is the date of publication in the Federal Register — i.e., April 28, 2026. Publication also triggers certain time-sensitive deadlines for operators, including the 60-day window for expedited DEA registration applications discussed below. That 60-day window is scheduled to close on June 26 (the final business day before the 60-day deadline), and the business day prior to June 29, the date when hearing begins, signaling intentional alignment.
Also scheduled for publication was a notice formally withdrawing the prior hearing proceedings that had been initiated in August 2024, which had been stayed since January 2025 following the retirement of the presiding administrative law judge. As the DEA explained, it determined that the most expeditious path forward, consistent with Executive Order 14370 (the “Executive Order”), was to terminate those earlier proceedings and initiate a fresh hearing.
Broader Rescheduling Hearing: June 29 Through July 15
Alongside the withdrawal of the prior hearing, the DEA published a new Notice of Hearing on the proposed rulemaking to transfer all marijuana from Schedule I to Schedule III. The hearing is scheduled to commence on June 29, 2026, at 9:00 a.m. ET at the DEA Hearing Facility in Arlington, Virginia. Importantly, the notice specifies that the hearing must conclude no later than July 15, 2026, true to the Executive Order’s request that rescheduling be accomplished expeditiously.
Interested persons who wish to participate must file a written notice of intention to participate by May 24, 2026 (electronically) or postmarked by May 20, 2026 (by mail). Importantly, the notice makes clear that even persons who previously submitted hearing requests or participation notices under the earlier 2024 proceedings must resubmit under this new notice. Following its assessment of the participation requests, the DEA has stated that it will notify selected participants on June 22, 2026.
Treasury and IRS Guidance on Section 280E
On April 23, 2026, the U.S. Department of the Treasury and the Internal Revenue Service announced that they plan to issue guidance addressing the federal tax consequences of the DOJ's Final Order. The Treasury and IRS acknowledged that the rescheduling is expected to have “significant positive tax consequences” for businesses in the medical marijuana industry. Because Section 280E of the Internal Revenue Code disallows deductions and credits for businesses trafficking in Schedule I or II controlled substances, rescheduling to Schedule III generally removes that bar for state-licensed medical cannabis operations.
Treasury and the IRS indicated that forthcoming guidance is expected to clarify how, for businesses with multiple activities, Section 280E applies only to those activities related to trafficking in Schedule I or II controlled substances, including, for example, by apportioning expenses. The guidance is also expected to include a transition rule providing that, for purposes of Section 280E, rescheduling will generally be considered to first apply for a business's full taxable year that includes the effective date of the Final Order and for activities that do not involve Schedule I or II controlled substances as a result of the Final Order.
This is consistent with the Final Order itself, which noted that state licensees will no longer be subject to the Section 280E deduction disallowance and further encouraged the Secretary of the Treasury to consider providing “retrospective relief” from Section 280E liability for taxable years in which a state licensee operated under a state medical marijuana license.
DEA Registration Portal Opening April 29
The DEA has announced that its Medical Marijuana Dispensary Registration Portal will open on Wednesday, April 29, 2026, at 9:00 AM EST. At that time, applicants will be able to begin and submit their applications.
The application requires payment of an annual $794 application fee, currently payable only via PayPal (with additional payment methods expected in the coming weeks). The online registration consists of seven sections covering a broad range of information that applicants should prepare in advance:
Section 1 – Personal/Business Information. Applicants must provide business name, address, phone, email, contact information, Social Security number or Tax ID, organization type, and information regarding prior ownership changes and any existing DEA controlled substance registrations.
Section 2 – Activity. Applicants must specify the substances they intend to handle, including marijuana in FDA-approved products or subject to a state medical marijuana license (drug code 7362), marijuana extract (drug code 7353), and naturally derived delta-9-tetrahydrocannabinols (drug code 7386). Applicants must also indicate whether they will handle or dispense medical or recreational marijuana and provide a National Provider ID if applicable.
Section 3 – State License(s). Applicants must submit their state license number, issuing state, and expiration date.
Section 4 – Liability Questions. This section covers prior controlled substance convictions, surrendered or revoked registrations, disciplinary actions against state professional licenses, and whether officers, partners, or stockholders have any such history.
Section 5 – Compliance Information. This is the most detailed section. Applicants must identify their intended suppliers (including DEA registration numbers), indicate whether they plan to repackage or relabel products, and confirm whether they have standard operating procedures for ordering, receiving, inventories, storage, security, dispensing, distributing, destruction/disposal, theft/loss reporting, due diligence, corresponding responsibility, and maintenance of records. Applicants must also provide detailed information, including name, title, date of birth, Social Security number, and disciplinary history, for each individual anticipated to have access to controlled substances. Finally, applicants must describe the security measures present at the location, such as vaults, safes, alarm systems, access controls, and onsite security personnel.
Section 6 – Payment. The $794 application fee is non-refundable.
Section 7 – Submission. Applicants confirm their entered information, make corrections, and electronically submit.
The 60-Day Expedited Application Window
The Final Order itself contains an important provision related to the timing of applications. Under the new registration pathway established in the rule, the DEA Administrator is directed to “make every effort to process all applications submitted within 60 days of the publication of this regulation in the Federal Register within six months.” Moreover, any applicant that submits an application within that 60-day window “may engage in the manufacture, distribution, and/or dispensing of marijuana or products containing marijuana for medical purposes in conformity with a state-issued license during the pendency of the application.” In other words, early filers may continue to operate lawfully under their state licenses while their federal applications are being reviewed.
This expedited pathway reflects the broader “cooperative-federalism” approach embodied in the Final Order, which leverages existing state regulatory infrastructure and treats a state medical marijuana license as “conclusive evidence” that the applicant is authorized under state law for the activity for which DEA registration is sought.
What Operators Should Do Now
The pace of developments following the DOJ's April 23 Order has, true to the Executive Order, been expeditious. We encourage medical cannabis operators to evaluate the following steps in consultation with counsel:
First, consider whether and when registration makes sense, and prepare. The portal opens April 29, and applications filed within 60 days of the Federal Register publication date (i.e., by approximately June 27, 2026) will benefit from the expedited review process and the ability to operate under state licenses during the pendency of review. Operators should begin compiling the required application materials now, including supplier information, standard operating procedures, personnel details, and security measures.
Second, assess tax positions. With rescheduling now effective, Section 280E no longer bars deductions and credits for state-licensed medical cannabis operations. Operators should work with their tax advisors to evaluate whether to file amended returns or protective claims, and to implement systems to segregate deductible costs attributable to medical cannabis operations.
Third, monitor the broader rescheduling proceeding. The hearing commencing June 29 and concluding by July 15 will address whether all cannabis, i.e., not just state-licensed medical cannabis, should be rescheduled to Schedule III. The outcome of that proceeding could have additional far-reaching implications for the industry. Interested parties who wish to participate must submit their notices of intention by May 24, 2026.
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