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On April 23, 2026, the U.S. Department of Justice (“DOJ”) reached a historic milestone in federal cannabis policy when Acting Attorney General Todd Blanche signed a final order transferring Food & Drug Administration (“FDA”)-approved marijuana products and all cannabis subject to a state medical marijuana license from Schedule I to Schedule III of the Controlled Substances Act (“CSA”).
For patients, providers, operators, lenders, investors, and virtually everyone involved in this industry, this marks one of the most significant federal cannabis developments in decades. The order takes effect immediately and creates a new pathway for state-regulated medical marijuana businesses to operate in compliance with both state law and federal controlled substances law for the first time in history.
Although the order does not currently address recreational cannabis, its impact on the industry is significant. Blank Rome is committed to guiding clients through these policy changes and helping them leverage emerging opportunities in the sector, which we believe will further benefit the industry as a whole. Here are the significant highlights and impacts of the policy change.
It is important to note that the final order excludes recreational marijuana and does not end the ongoing formal rulemaking process regarding marijuana rescheduling, which was initiated under the previous administration.
The Drug Enforcement Administration (“DEA”) has cancelled the long-delayed Administrative Law Judge hearing associated with that proceeding and announced a new hearing that will begin on June 29, 2026, and conclude no later than July 15, 2026. Interested parties have 30 days from publication of that order to request participation.
Because the new final order moves all marijuana subject to a state medical marijuana license to Schedule III, the remaining formal rulemaking will focus on marijuana that remains in Schedule I—namely, marijuana not subject to a state medical marijuana license. The cannabis industry needs to be prepared and aligned to advocate with one voice that adult use should be included in Schedule III. There are factions in and outside of the government that will try to prevent full rescheduling and industry members must truly unite and jointly support the cause to defeat opposition.
Blank Rome is fortunate to truly have the leading regulatory attorneys who understand the intricacies of the federal and state laws pertaining to the cannabis industry and the firm is committed to advising and supporting our clients and the industry in winning this effort. Blank Rome prides itself on forging relationships among our clients and contacts in the cannabis industry and we will continue to do our part to foster such alignment.
One of the most immediate consequences of the final order is relief from Internal Revenue Code Section 280E for businesses handling marijuana subject to a state medical marijuana license who have obtained a DEA registration.
Because Section 280E applies only to Schedule I and II substances, marijuana that is subject to a state medical marijuana license no longer falls within its ambit. This development will materially improve cash flow, profitability, and enterprise value across the state-licensed medical cannabis sector.
While the order provides that such tax relief is effective as of January 1, 2026, the order also encourages the U.S. Department of the Treasury to make that relief retrospective, and Treasury has announced that it will issue additional guidance on implementation. This could result in direct tax relief or, if not granted, various legal arguments to justify such tax relief.
The final order also creates an expedited pathway for state-licensed medical marijuana companies to obtain registration with the DEA.
Registered entities may manufacture, distribute, dispense, import, and export marijuana under federal law. This creates the possibility—previously unavailable—for businesses operating under state medical marijuana programs to conduct those operations under DEA registration and thus in full compliance with the CSA.
This enhanced federal legitimacy could have substantial downstream effects, particularly with respect to interstate and international commercial opportunities.
Blank Rome is uniquely positioned to guide its clients through this DEA process being one of a handful of law firms who regularly assist clients with cannabis matters involving the DEA and FDA. In addition, our understanding of this process enables us to best advise clients on the implications and potential opportunities regarding interstate commerce and international import/export possibilities.
The final order permits state-licensed medical marijuana companies that apply for DEA registration within 60 days of publication of the order to continue operating under their state licenses while DEA reviews their applications.
DEA must also process these early applications within six months.
Operators considering registration must submit applications within this 60-day window to secure expedited processing. Blank Rome’s attorneys stand ready to assist clients in this process.
The final order also significantly expands research opportunities.
Researchers may now obtain marijuana and marijuana-derived products directly from state licensees for scientific research, provided both the researcher and the supplier are DEA registered.
This is a major development because it facilitates research using the actual products patients are using in state-regulated medical marijuana programs, rather than limiting studies to federally supplied research material that often differs significantly from commercial products.
Although the final order provides significant clarity, important questions remain, which Blank Rome will be addressing for its clients, including:
1) Import and Export: The order contemplates DEA registration for import and export activity involving state-licensed Schedule III medical marijuana. However, DEA has historically exercised strict control over marijuana exports—even where it had legal authority to permit them.
Whether federal policy will materially shift in this area remains uncertain.
2) Dual-License Operators: Many businesses operate under both medical and adult-use licenses.
It remains unclear whether, and to what extent, DEA will require such businesses to restructure operations to obtain or maintain registration. Historically, DEA has viewed ongoing handling of Schedule I substances in violation of federal law as grounds to deny or revoke registration.
Whether DOJ will take a more flexible approach under this new framework remains to be seen.
The final order will face immediate legal challenge in federal court, and challengers are likely to seek a stay.
The CSA permits parties aggrieved by the order to petition directly for judicial review in federal appellate court. While the outcome of that litigation is difficult to predict, the final order includes a severability provision intended to preserve the remainder of the framework if one or more portions is invalidated.
As a result, even successful challenges may not undo the entire regulatory structure.
Blank Rome’s administrative law professionals are among the leading attorneys who have been and will continue to be in the rescheduling trenches and on the front line in court on behalf of its clients.
The increased federal legitimacy of the cannabis industry stands to create significant downstream impacts, opening the door to new business opportunities. Navigating the evolving landscape demands not only deep understanding of regulatory frameworks but also forward-thinking industry insight. As the leading full-service business and regulatory law firm to the cannabis industry, Blank Rome provides its clients with the resources, skills, and deep industry knowledge needed to stay ahead of competitors and seize emerging opportunities. As legal environments shift, it is essential for companies to stay informed and strategically positioned to anticipate and respond to emerging trends, challenges, and avenues for growth, including:
This final order represents a fundamental shift in federal marijuana policy and provides state-licensed medical marijuana businesses with opportunities that did not previously exist under federal law. However, adult use cannabis cannot be dropped by the wayside, and the industry must be aligned to prevent that from happening.
The legal and regulatory landscape remains dynamic. DEA and FDA implementation, Treasury guidance, the ongoing formal rescheduling proceeding, and inevitable federal litigation will all shape what comes next.
Businesses operating in the cannabis industry—particularly those in state medical marijuana programs—must immediately begin evaluating how DEA registration, tax treatment, compliance obligations, and strategic planning may impact their business and prepare to take advantage of such opportunities.
The practical consequences of this order will depend not only on what DOJ has written, but on how federal agencies and the courts respond in the months ahead.
Blank Rome’s Cannabis practice stands ready to assist its clients in successfully navigating these steps, including:
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Under certain state laws, the following statements may be required on this website and we have included them in order to be in full compliance with these rules. The choice of a lawyer or other professional is an important decision and should not be based solely upon advertisements. Attorney Advertising Notice: Prior results do not guarantee a similar outcome. Statement in compliance with Texas Rules of Professional Conduct. Unless otherwise noted, attorneys are not certified by the Texas Board of Legal Specialization, nor can NLR attest to the accuracy of any notation of Legal Specialization or other Professional Credentials.
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Find Your Next Job !
On April 23, 2026, the U.S. Department of Justice (“DOJ”) reached a historic milestone in federal cannabis policy when Acting Attorney General Todd Blanche signed a final order transferring Food & Drug Administration (“FDA”)-approved marijuana products and all cannabis subject to a state medical marijuana license from Schedule I to Schedule III of the Controlled Substances Act (“CSA”).
For patients, providers, operators, lenders, investors, and virtually everyone involved in this industry, this marks one of the most significant federal cannabis developments in decades. The order takes effect immediately and creates a new pathway for state-regulated medical marijuana businesses to operate in compliance with both state law and federal controlled substances law for the first time in history.
Although the order does not currently address recreational cannabis, its impact on the industry is significant. Blank Rome is committed to guiding clients through these policy changes and helping them leverage emerging opportunities in the sector, which we believe will further benefit the industry as a whole. Here are the significant highlights and impacts of the policy change.
It is important to note that the final order excludes recreational marijuana and does not end the ongoing formal rulemaking process regarding marijuana rescheduling, which was initiated under the previous administration.
The Drug Enforcement Administration (“DEA”) has cancelled the long-delayed Administrative Law Judge hearing associated with that proceeding and announced a new hearing that will begin on June 29, 2026, and conclude no later than July 15, 2026. Interested parties have 30 days from publication of that order to request participation.
Because the new final order moves all marijuana subject to a state medical marijuana license to Schedule III, the remaining formal rulemaking will focus on marijuana that remains in Schedule I—namely, marijuana not subject to a state medical marijuana license. The cannabis industry needs to be prepared and aligned to advocate with one voice that adult use should be included in Schedule III. There are factions in and outside of the government that will try to prevent full rescheduling and industry members must truly unite and jointly support the cause to defeat opposition.
Blank Rome is fortunate to truly have the leading regulatory attorneys who understand the intricacies of the federal and state laws pertaining to the cannabis industry and the firm is committed to advising and supporting our clients and the industry in winning this effort. Blank Rome prides itself on forging relationships among our clients and contacts in the cannabis industry and we will continue to do our part to foster such alignment.
One of the most immediate consequences of the final order is relief from Internal Revenue Code Section 280E for businesses handling marijuana subject to a state medical marijuana license who have obtained a DEA registration.
Because Section 280E applies only to Schedule I and II substances, marijuana that is subject to a state medical marijuana license no longer falls within its ambit. This development will materially improve cash flow, profitability, and enterprise value across the state-licensed medical cannabis sector.
While the order provides that such tax relief is effective as of January 1, 2026, the order also encourages the U.S. Department of the Treasury to make that relief retrospective, and Treasury has announced that it will issue additional guidance on implementation. This could result in direct tax relief or, if not granted, various legal arguments to justify such tax relief.
The final order also creates an expedited pathway for state-licensed medical marijuana companies to obtain registration with the DEA.
Registered entities may manufacture, distribute, dispense, import, and export marijuana under federal law. This creates the possibility—previously unavailable—for businesses operating under state medical marijuana programs to conduct those operations under DEA registration and thus in full compliance with the CSA.
This enhanced federal legitimacy could have substantial downstream effects, particularly with respect to interstate and international commercial opportunities.
Blank Rome is uniquely positioned to guide its clients through this DEA process being one of a handful of law firms who regularly assist clients with cannabis matters involving the DEA and FDA. In addition, our understanding of this process enables us to best advise clients on the implications and potential opportunities regarding interstate commerce and international import/export possibilities.
The final order permits state-licensed medical marijuana companies that apply for DEA registration within 60 days of publication of the order to continue operating under their state licenses while DEA reviews their applications.
DEA must also process these early applications within six months.
Operators considering registration must submit applications within this 60-day window to secure expedited processing. Blank Rome’s attorneys stand ready to assist clients in this process.
The final order also significantly expands research opportunities.
Researchers may now obtain marijuana and marijuana-derived products directly from state licensees for scientific research, provided both the researcher and the supplier are DEA registered.
This is a major development because it facilitates research using the actual products patients are using in state-regulated medical marijuana programs, rather than limiting studies to federally supplied research material that often differs significantly from commercial products.
Although the final order provides significant clarity, important questions remain, which Blank Rome will be addressing for its clients, including:
1) Import and Export: The order contemplates DEA registration for import and export activity involving state-licensed Schedule III medical marijuana. However, DEA has historically exercised strict control over marijuana exports—even where it had legal authority to permit them.
Whether federal policy will materially shift in this area remains uncertain.
2) Dual-License Operators: Many businesses operate under both medical and adult-use licenses.
It remains unclear whether, and to what extent, DEA will require such businesses to restructure operations to obtain or maintain registration. Historically, DEA has viewed ongoing handling of Schedule I substances in violation of federal law as grounds to deny or revoke registration.
Whether DOJ will take a more flexible approach under this new framework remains to be seen.
The final order will face immediate legal challenge in federal court, and challengers are likely to seek a stay.
The CSA permits parties aggrieved by the order to petition directly for judicial review in federal appellate court. While the outcome of that litigation is difficult to predict, the final order includes a severability provision intended to preserve the remainder of the framework if one or more portions is invalidated.
As a result, even successful challenges may not undo the entire regulatory structure.
Blank Rome’s administrative law professionals are among the leading attorneys who have been and will continue to be in the rescheduling trenches and on the front line in court on behalf of its clients.
The increased federal legitimacy of the cannabis industry stands to create significant downstream impacts, opening the door to new business opportunities. Navigating the evolving landscape demands not only deep understanding of regulatory frameworks but also forward-thinking industry insight. As the leading full-service business and regulatory law firm to the cannabis industry, Blank Rome provides its clients with the resources, skills, and deep industry knowledge needed to stay ahead of competitors and seize emerging opportunities. As legal environments shift, it is essential for companies to stay informed and strategically positioned to anticipate and respond to emerging trends, challenges, and avenues for growth, including:
This final order represents a fundamental shift in federal marijuana policy and provides state-licensed medical marijuana businesses with opportunities that did not previously exist under federal law. However, adult use cannabis cannot be dropped by the wayside, and the industry must be aligned to prevent that from happening.
The legal and regulatory landscape remains dynamic. DEA and FDA implementation, Treasury guidance, the ongoing formal rescheduling proceeding, and inevitable federal litigation will all shape what comes next.
Businesses operating in the cannabis industry—particularly those in state medical marijuana programs—must immediately begin evaluating how DEA registration, tax treatment, compliance obligations, and strategic planning may impact their business and prepare to take advantage of such opportunities.
The practical consequences of this order will depend not only on what DOJ has written, but on how federal agencies and the courts respond in the months ahead.
Blank Rome’s Cannabis practice stands ready to assist its clients in successfully navigating these steps, including:
More Upcoming Events
Sign Up for any (or all) of our 25+ Newsletters
You are responsible for reading, understanding, and agreeing to the National Law Review’s (NLR’s) and the National Law Forum LLC’s Terms of Use and Privacy Policy before using the National Law Review website. The National Law Review is a free-to-use, no-log-in database of legal and business articles. The content and links on www.NatLawReview.com are intended for general information purposes only. Any legal analysis, legislative updates, or other content and links should not be construed as legal or professional advice or a substitute for such advice. No attorney-client or confidential relationship is formed by the transmission of information between you and the National Law Review website or any of the law firms, attorneys, or other professionals or organizations who include content on the National Law Review website. If you require legal or professional advice, kindly contact an attorney or other suitable professional advisor.
Some states have laws and ethical rules regarding solicitation and advertisement practices by attorneys and/or other professionals. The National Law Review is not a law firm nor is www.NatLawReview.com intended to be a referral service for attorneys and/or other professionals. The NLR does not wish, nor does it intend, to solicit the business of anyone or to refer anyone to an attorney or other professional. NLR does not answer legal questions nor will we refer you to an attorney or other professional if you request such information from us.
Under certain state laws, the following statements may be required on this website and we have included them in order to be in full compliance with these rules. The choice of a lawyer or other professional is an important decision and should not be based solely upon advertisements. Attorney Advertising Notice: Prior results do not guarantee a similar outcome. Statement in compliance with Texas Rules of Professional Conduct. Unless otherwise noted, attorneys are not certified by the Texas Board of Legal Specialization, nor can NLR attest to the accuracy of any notation of Legal Specialization or other Professional Credentials.
The National Law Review – National Law Forum LLC 2070 Green Bay Rd., Suite 178, Highland Park, IL 60035 Telephone (708) 357-3317 or toll-free (877) 357-3317. If you would like to contact us via email please click here.
Copyright ©2026 National Law Forum, LLC