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DEA Cannabis Rescheduling — Status & Implications

HHS recommended Schedule III classification for marijuana in August 2023. The DEA proposed a rescheduling rule in May 2024. President Trump signed Executive Order 14370 in December 2025 directing the Attorney General to complete rescheduling "expeditiously." As of April 2026, rulemaking has not been finalized and marijuana remains Schedule I. Here is what rescheduling would and would not change for veterans.

Where Things Stand

Marijuana remains Schedule I as of April 2026. HHS recommended Schedule III in 2023. DEA proposed rule in 2024. Trump's December 2025 EO 14370 directs completion "expeditiously." Rulemaking not finalized. Even if rescheduled, VA cannot prescribe dispensary cannabis (not FDA-approved), DOT rules will not automatically change, and the Veterans Equal Access Act remains necessary for VA provider recommendations.

The Timeline

August 2023 — HHS Recommendation

The Department of Health and Human Services (HHS) recommended to the DEA that marijuana be reclassified from Schedule I to Schedule III. HHS based its recommendation on:

  • Acknowledgment that cannabis has "currently accepted medical use" in the United States (most states have medical programs)
  • Assessment that cannabis has lower abuse potential than other Schedule I substances
  • Evidence from state-level medical cannabis programs and clinical research
  • The FDA's own scientific review of available cannabis research

This was a significant shift. HHS had previously deferred to the DEA on scheduling questions, and its 2023 recommendation represented the first time a federal scientific agency formally recommended reclassification.

May 2024 — DEA Proposed Rule

The DOJ/DEA issued a proposed rule to reschedule marijuana from Schedule I to Schedule III. The proposed rule was published in the Federal Register and opened for public comment. It received approximately 43,000 public comments, with over 90% supporting rescheduling or descheduling.

January 2025 — Hearings Stayed

Administrative hearings on the proposed rule were stayed in January 2025 due to allegations of DEA bias in the process. The stay delayed implementation timelines and raised questions about whether the process could proceed as originally planned.

December 18, 2025 — Executive Order 14370

President Trump signed Executive Order 14370, "Increasing Medical Marijuana and Cannabidiol Research." The EO:

  • Directs the Attorney General to complete rescheduling "in the most expeditious manner"
  • Instructs federal agencies to prioritize cannabis research
  • Does NOT itself reschedule marijuana
  • Does NOT override DOT, DoD, or other agency drug policies

April 2026 — Current Status

DEA rulemaking has not been finalized. Marijuana remains Schedule I. The timeline for final action remains uncertain.

What Rescheduling to Schedule III Would Change

Section 280E Tax Restrictions

Schedule I and II substances are subject to Section 280E of the IRS Code, which prohibits cannabis businesses from deducting ordinary business expenses. Schedule III substances are not subject to 280E. Rescheduling would:

  • Allow cannabis businesses to deduct ordinary expenses (rent, payroll, marketing)
  • Significantly improve profitability for licensed cannabis businesses
  • Reduce the financial pressure that pushes some operators toward tax avoidance or illicit-market strategies
  • Make veteran-owned cannabis businesses more viable

Research Access

Schedule III substances face significantly less friction for clinical research than Schedule I. Rescheduling would:

  • Ease DEA approval requirements for cannabis research
  • Reduce the ~12-month approval timelines that have plagued Schedule I research
  • Allow more research cannabis producers beyond the long-standing NIDA monopoly
  • Enable faster translation of research findings to clinical practice

Federal Acknowledgment of Medical Value

Rescheduling represents the first federal acknowledgment that cannabis has "currently accepted medical use in the United States." This would have symbolic and legal weight that could support future policy reforms in other areas (VA prescribing, federal employment, DOT).

What Rescheduling Would NOT Change

VA Prescribing

VA providers still could not recommend plant cannabis because it is not FDA-approved for any indication. Schedule III substances can only be prescribed when FDA-approved for specific uses. Plant cannabis would need to go through FDA drug approval to become prescribable, which has not happened and is unlikely to happen for the whole plant (though specific extracts or formulations could receive approval).

The Veterans Equal Access Act would still be necessary to authorize VA providers to recommend cannabis through state programs.

DOT Safety-Sensitive Positions

DOT has explicitly confirmed that marijuana remains "unacceptable for any safety-sensitive employee subject to drug testing" regardless of scheduling changes. Rescheduling would not automatically change DOT rules — DOT would need to issue new guidance, which has not happened and is not currently projected.

Federal Employment (EO 12564)

Executive Order 12564 prohibits federal employees from illegal drug use. Scheduling changes alone would not affect this EO, which would need to be amended or replaced to permit cannabis use by federal employees. No such action has been taken.

Security Clearances (SEAD 4)

SEAD 4 Guideline H treats cannabis use as a concern regardless of federal scheduling. State legalization does not change clearance rules, and neither would federal rescheduling without specific policy changes to SEAD 4.

UCMJ Article 112a

Article 112a of the UCMJ prohibits marijuana use by military members and does not depend on the Controlled Substances Act scheduling. Military members would still face UCMJ consequences for cannabis use regardless of rescheduling.

Federal Banking

Rescheduling alone would not solve cannabis industry banking problems. The SAFE Banking Act (or similar legislation) would still be needed to create safe harbor for financial institutions serving cannabis businesses.

Interstate Transport

Interstate cannabis transport would still violate federal law. Schedule III status would not legalize cross-state commerce.

Implementation Challenges

Even once rescheduling is finalized, implementation will face several challenges:

  • Federal agencies will need to update their internal rules and guidance
  • Banking relationships will not automatically change
  • State programs will continue to operate under state law, independent of federal scheduling
  • Employers will retain discretion to maintain drug-free workplace policies
  • Legal challenges to the rescheduling process are possible

What This Means for Veterans Right Now

  • Nothing has actually changed yet. Marijuana remains Schedule I as of April 2026.
  • Watch for finalization of DEA rulemaking. This is the immediate milestone that matters.
  • The Veterans Equal Access Act remains important. Rescheduling alone does not authorize VA providers to recommend cannabis.
  • Federal employment, clearances, DOT, and UCMJ rules will not automatically change. Separate actions are needed for each.
  • State programs will continue to be the practical pathway for legal access regardless of federal scheduling.

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