Rescheduling Cannabis to Schedule III
Rescheduling cannabis has the potential to positively shift social attitudes, reduce stigma, and foster greater acceptance among medical professionals, employers, and policymakers. These changes could help normalize medical cannabis use and create a more supportive environment for patients. One of the few definitive outcomes of rescheduling—especially to Schedule III—is its potential to advance cannabis research. Easing the costs and regulatory burdens associated with handling, storage, and security under Schedule I could make research more accessible, expanding scientific knowledge about cannabis’ effects, safety, and therapeutic applications.
Rescheduling alone will not address the systemic challenges faced by patients or businesses in current state medical cannabis programs. This would require action from Congress.
STATUS QUO AFTER RESCHEDULING
Despite these benefits, rescheduling will not automatically integrate state medical cannabis programs into federally regulated frameworks. State program products would remain outside prescription-based protocols unless Congress provides clear guidance and establishes a formal registration process. Patients in state programs would not require prescriptions, and these products would remain ineligible for federally approved clinical trials focused on efficacy.
Furthermore, unregulated Schedule II or III substances would remain federally illegal. While simple possession charges are rarely enforced, activities such as cultivation, manufacturing, and distribution outside federal regulations would still be classified as trafficking, with severe penalties. For instance, trafficking Schedule III substances could result in penalties ranging from 10 years in prison and a $500,000 fine for individuals (first offense) to 20 years and a $1 million fine for subsequent offenses.
State medical cannabis programs are protected from federal interference under the CJS amendment. However, the enforcement of federal laws on adult use is ultimately determined by presidential directives. Rescheduling is also unlikely to alleviate tax burdens for cannabis businesses. While 280E explicitly applies to Schedule I and II substances, it is improbable that unregulated Schedule III cannabis products would qualify for business expense deductions, as federal law still considers manufacturing and distribution trafficking. Historically, the IRS has denied deductions for illegal business activities (Internal Revenue Code 162 (c)(2)), including racketeering, sports betting, and other activities violating federal or state law. Without changes to the tax code or federal legalization—both requiring Congressional action—cannabis businesses claiming deductions prematurely would likely find themselves in legal battles with the IRS.
IMPACT ON PATIENTS
Rescheduling is undeniably a victory for medical cannabis patients and advocates. By recognizing cannabis’ “currently accepted medical use in treatment in the United States,” the federal government has validated decades of patient-led advocacy and the role of state programs as “laboratories of democracy.” These programs, built with compassionate use in mind, were essential in overcoming barriers raised by HHS, DEA, and DOJ denials of rescheduling petitions over the past 50 years.
However, while rescheduling marks progress, it is not the comprehensive solution patients need. Schedule III does not legalize medical cannabis, improve state medical cannabis programs, or restore federal rights for patients. Instead, it shifts the conversation from debating cannabis’ medical value to exploring how patients can safely access it. However, this shift does little to address the structural barriers limiting patient access today.
RESURGENCE OF OPPOSITION
Surprisingly, patient-centered perspectives were largely absent from media coverage of rescheduling. Instead, much of the media amplified cannabis business press releases, focusing on how rescheduling might impact taxes for businesses or tying the move to President Biden’s re-election campaign. These narratives, though unfounded, shaped debates on Capitol Hill and diverted attention from patient concerns.
The much-awaited recognition of the “accepted medical use in the United States” did not galvanize support for patients; the most visible impact of rescheduling thus far has been a temporary surge in cannabis company stock prices and a resurgence of the anti-marijuana lobby in Washington, D.C. On July 9, the House Appropriations Committee passed a version of the Commerce, Justice, Science, and Related Agencies (CJS) appropriations bill that included language (Section 623) to block cannabis rescheduling efforts. Additionally, a proposed modification to the 2014 medical cannabis amendment (Section 531(b)) threatens to allow federal interference in state programs with harsher penalties. The very next day, 25 Republican Senators and Congressmen sent a letter to Attorney General Merrick Garland, condemning the rescheduling process as politically motivated and unsupported by science.
Unfortunately, the change in party leadership in the Senate means that many of the signatories of that letter will be in the very leadership positions that the President-elect would need to work with to move cannabis policy, including John Thune (R-SD), Shelley Moore Capito (R-WV)-GOP Policy Committee Chair, James Lankford (R-OK)- GOP Policy Committee Vice-Chair, Jerry Moran (R-KS)- Likely new chair for Approps, and CJS Subcommittee, Bill Hagerty (R-TN)- Likely new chair for Approps. AG subcommittee.
THE DOJ's PROPOSAL FOR SCHEDULING CANNABIS & CANNABINOIDS IS COMPLICATED
The proposed rule change is not black and white, and the upcoming road ahead to a final ruling promises twists and turns. While patients have not been the focus of much of the news coverage on the rescheduling process, they are at the center of the journey to this groundbreaking end to 50+ years of prohibition of cannabis.
THE PROPOSED RULE:
1. AMEND § 1308.11 SCHEDULE I.
(d) Hallucinogenic substances. Unless specifically excepted or unless listed in another schedule, anymaterial, compound, mixture, or preparation, which contains any quantity of the following hallucinogenic substances, or which contains any of its salts, isomers, and salts of isomers whenever the existence of such salts, isomers, and salts of isomers is possible within the specific chemical designation (for purposes of this paragraph only, the term “isomer” includes the optical, position and geometric isomers).
BY REMOVING
paragraph(d)(23)-(23) Marihuana 7360
AND
paragraph (d)(58)- (58) Marihuana Extract 7350 Meaning an extract containing one or more cannabinoids that has been derived from any plant of the genus Cannabis, containing greater than 0.3% delta-9-tetrahydrocannabinol on a dry weight basis, other than the separated resin (whether crude or purified) obtained from the plant.
CHANGING:
(redesignating paragraphs (d)(24) through (d)(104) as (d)(23) through (d)(102), respectively)
2. AMEND § 1308.11 BY REVISING THE RENUMBERED PARAGRAPH (D)(30) TO READ AS FOLLOWS:
(31) (30) Tetrahydrocannabinols 7370
(i) Meaning tetrahydrocannabinols, except as in paragraph (d)(31)(30)(ii) and (iii) of this section, naturally contained in a plant of the genus Cannabis (cannabis plant), as well as synthetic equivalents of the substances contained in the cannabis plant, or in the resinous extractives extracts of such plant, and/or synthetic substances, derivatives, and their isomers with similar chemical structure and pharmacological activity to those substances contained in the plant, such as the following: 1 cis or trans tetrahydrocannabinol, and their optical isomers 6 cis or trans tetrahydrocannabinol, and their optical isomers 3, 4 cis or trans tetrahydrocannabinol, and its optical isomers
(Since nomenclature of these substances is not internationally standardized, compounds of these structures, regardless of numerical designation of atomic positions covered.)
(ii) Tetrahydrocannabinols does not include any material, compound, mixture, or preparation that falls within the definition of hemp set forth in 7 U.S.C. 1639o.
(iii) Tetrahydrocannabinols does not include any substance that falls within the definition of marijuana set forth in 21 U.S.C. 802(16).
3. AMEND § 1308.13 BY ADDING NEW PARAGRAPHS (H), (I), AND (J) TO READ AS FOLLOWS:
1308.13 Schedule III.
(h) Marihuana Marijuana, as defined in 21 U.S.C. 802(16).
(i) Marihuana Marijuana Extract, meaning an extract containing one or more cannabinoids that has been derived from any plant of the genus Cannabis, containing greater than 0.3 percent delta-9- tetrahydrocannabinol on a dry weight basis, other than the separated resin (whether crude or purified) obtained from the plant.
(j) Naturally Derived Delta-9-Tetrahydrocannabinols.
Meaning those delta-9-tetrahydrocannabinols, except as in paragraphs (j)(ii) and (j)(iii) of this section, that are naturally contained in a plant of the genus Cannabis (cannabis plant).
Naturally derived delta-9-tetrahydrocannabinols do not include any material, compound, mixture, or preparation that falls within the definition of hemp set forth in 7 U.S.C. 1639o.
Naturally derived delta-9-tetrahydrocannabinols do not include any delta-9- tetrahydrocannabinols contained in substances excluded from the definition of marijuana as set forth in 21 U.S.C. 802(16)(B) (ii)
Referenced Citations:
7 U.S.C. §1639o. Definitions (1) Hemp- The term "hemp" means the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.
21 U.S.C. 802 (16)(A) Subject to subparagraph (B), the terms "marihuana" and "marijuana" mean all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin.
(B) The terms "marihuana" and "marijuana" do not include-
(i) hemp, as defined in section 1639o of title 7; or
(ii) the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted there from), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination.
Rescheduling cannabis will be both a victory and a challenge. Without Congressional action, Schedule III could become another decades-long holding pattern. Congress now has an opportunity to enact policies that fully support patient health, but this requires decisive action. Americans for Safe Access (ASA) has proposed the creation of a national medical cannabis program to address these challenges. This program would establish uniform regulations, restore federal rights for patients, ensure nationwide access to therapeutic use and research, and create a framework explicitly tailored to cannabis therapeutics. ASA also advocates for a unique schedule designed to reflect cannabis’ distinct medical and therapeutic applications.
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