A newly published federal order from the Drug Enforcement Administration (DEA) makes a targeted shift in marijuana policy, placing FDA-approved marijuana drugs and certain state-licensed medical marijuana activities into Schedule III, while also suggesting that federal officials consider retroactive tax relief under IRS code 280E.
The order, issued by the Department of Justice and signed by Acting Attorney General Todd Blanche, took effect April 22, 2026. It outlines a rescheduling framework that applies specifically to FDA-approved marijuana products and regulated medical marijuana systems, while leaving the broader federal prohibition intact .
Under the rule, marijuana-based drugs approved by the U.S. Food and Drug Administration are now classified as Schedule III substances. This includes products containing marijuana extracts or delta-9 THC that meet federal approval standards. In addition, marijuana handled under state-issued medical marijuana licenses is incorporated into the Schedule III framework for certain regulatory purposes.
Despite the shift, the order makes clear that marijuana itself remains in Schedule I in most contexts, continuing to be treated as having a high potential for abuse and no accepted medical use under federal law. The change is narrow, applying primarily to pharmaceutical-grade products and tightly regulated medical programs.
The document frames the move as necessary to meet the United States’ obligations under international drug control treaties. Federal officials say the approach—keeping bulk marijuana in Schedule I while moving certain approved uses to Schedule III—allows compliance with the Single Convention on Narcotic Drugs without disrupting existing systems .
One of the most consequential aspects of the order involves federal tax policy. By shifting qualifying marijuana-related activities into Schedule III, some businesses may no longer be subject to Section 280E of the Internal Revenue Code, which blocks standard business deductions for companies involved with Schedule I or II substances.
The order also goes a step further, stating that the Attorney General encourages the Treasury Department to consider providing retroactive 280E relief for businesses that have operated under state medical marijuana licenses. However, the document does not mandate such relief, leaving any retroactive changes to future action by Treasury .
In addition to tax implications, the rule establishes a pathway for state-licensed medical marijuana businesses to obtain federal registration more easily. Companies operating legally at the state level can use their existing licenses as a basis for expedited approval to manufacture, distribute, or dispense marijuana products under the new framework.
The order also sets out detailed requirements for entities handling FDA-approved marijuana products. These include DEA registration, strict recordkeeping, labeling standards, security measures, and prescription-based dispensing, aligning these products with other Schedule III pharmaceuticals.
Notably, the rule does not apply to hemp or hemp-derived products that fall below the federal threshold of 0.3% delta-9 THC. Synthetic cannabinoids also remain outside the scope of this change.
Imports and exports of marijuana-related products will continue to require federal permits, even for substances placed in Schedule III, reflecting ongoing international treaty obligations and federal oversight.
Overall, the order represents a meaningful development in federal marijuana policy. It opens the door for recognized medical use in specific contexts and raises the possibility of tax relief for some businesses, while leaving the broader federal prohibition largely unchanged.
