Regulatory

Cannabis Rescheduling, July 2026: The Actual State of Play

July 12, 2026 · by Brendon Kennedy

I run a DTC hemp brand and I’m a vendor to a licensed cannabis company, so I read scheduling news the way other people read weather radar. The last ninety days produced more real movement on federal cannabis rescheduling than the prior three years combined — and also more confident misreporting in both directions. Here is the actual state of play as of July 12, 2026, with primary sources.

How we got here

The short version of a long timeline, per the Moritz College of Law tracker: President Biden ordered a scheduling review in October 2022. In August 2023, HHS recommended moving marijuana from Schedule I to Schedule III, concluding it met a two-part test for currently accepted medical use. On May 21, 2024, DOJ published the proposed rule — 89 FR 44597, Docket DEA-1362 — and drew more than 42,000 comments.

Then the process ate itself. DEA granted a hearing before its chief administrative law judge, John Mulrooney, with merits sessions set for January 21, 2025. In January 2025, after motions alleging improper communications between DEA and anti-rescheduling participants, Mulrooney certified an interlocutory appeal, canceled the hearing, and stayed the proceedings. They never restarted. Essentially all of 2025 passed in that posture.

The logjam broke on December 18, 2025, when President Trump signed Executive Order 14370, directing the Attorney General to complete the rescheduling rulemaking “in the most expeditious manner” consistent with federal law.

What the April 2026 order actually did

On April 23, 2026, Acting Attorney General Todd Blanche issued a final order — announced by DOJ, published April 28 at 91 FR 22714 and effective on publication — that immediately moved two narrow categories to Schedule III: (1) marijuana in FDA-approved drug products, and (2) marijuana subject to a qualifying state medical marijuana license. Per Gibson Dunn’s analysis, unlicensed crops, bulk marijuana, and derivatives outside those lanes stay in Schedule I. Adult-use cannabis — the majority of the regulated market in California — is still Schedule I today.

Two companion Federal Register documents matter as much as the order. DOJ withdrew the stalled 2024 hearing (91 FR 22778), terminating the Mulrooney-era proceedings, and simultaneously noticed a new expedited hearing (91 FR 22777) on the broader question of moving all marijuana to Schedule III.

The order also created obligations, not just relief. DEA opened a registration portal on April 29 for state medical licensees — Foley Hoag reports a $794 annual fee and a 60-day window (roughly June 27) in which applicants could keep operating under their state license while the application is pending. Schedule III is a federally regulated lane, with SOPs, security, and supplier documentation. That window has now closed; late filers should ask counsel where that leaves them.

What’s happening right now

The new hearing began June 29 at DEA headquarters before new Chief ALJ Derek C. Julius and is required to conclude by July 15, 2026. It has been running ahead of schedule, recessing July 9 after one designated party finished its case early. After it closes, Julius issues a recommended decision and DOJ finalizes the rule. I could not verify any published deadline for the recommended decision or the final rule — anyone quoting you a date is guessing.

Meanwhile, the April order is being challenged from multiple directions in the D.C. Circuit, with stay requests pending, per Ropes & Gray. Litigation risk sits on top of everything below.

What Schedule III changes — and what stays the same the morning after

280E: the real money. Section 280E denies ordinary deductions to businesses trafficking in Schedule I or II substances — it does not reach Schedule III. Treasury and IRS have said guidance is coming and that rescheduling generally removes the 280E bar for state-licensed medical operations, applying for the full taxable year that includes the effective date, with retrospective relief under consideration (Foley Hoag). Adult-use activity stays under 280E as long as it stays Schedule I. Dual-licensed California operators should expect messy apportionment questions until the guidance lands.

Banking: mostly unchanged. FinCEN’s 2014 guidance and its suspicious-activity-report regime are still in force and were not revised after the April order; rescheduling reduces institutional risk but creates no safe harbor (MMJDaily). The legislative fix is still legislative: a bipartisan cannabis banking bill was reintroduced in June 2026 after years of near misses.

Ad platforms: unchanged. Google and Meta prohibit THC product ads as private policy, not because of the CSA schedule. Nothing in an ALJ record forces Mountain View’s hand.

Federal legality: unchanged. Schedule III is not legalization. The 2024 proposed rule itself said existing federal prohibitions and Food, Drug, and Cosmetic Act restrictions would continue to apply. State-regulated adult-use commerce, and interstate commerce, remain federally prohibited the morning after any final rule.

Hemp: a different clock entirely. For hemp operators, the bigger deadline isn’t rescheduling — it’s November 12, 2026, when the redefinition of hemp enacted in the November 2025 appropriations law takes effect: a 0.3% total THC standard including THCA, plus a 0.4 mg total-THC-per-container cap on finished products (DLA Piper). EO 14370 also directs work with Congress on a full-spectrum CBD framework, so the statute could move again. Watch that lane separately.

What I’m doing about it as an operator

Nothing heroic. On the hemp side, I’m auditing product specs against the November 2026 total-THC definition now, not next fall, and staying close to the trade coverage in case Congress adjusts it. On the licensed-cannabis side, I’m flagging the 280E transition and DEA registration questions to the license holders I work with and their CPAs rather than acting on headlines. I’m keeping copies of the actual Federal Register documents, because summaries — including this one — decay fast. And I’m not building any plan that assumes a final Schedule III rule lands on a particular date, because the record here is a decade of missed expectations.

Not legal advice. I’m an operator writing about rules I have to live under, not a lawyer. Verify anything load-bearing with counsel and the primary sources below.

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