As Rescheduling Inches Forward, Its Opponents Open a New Front in Court

As Rescheduling Inches Forward, Its Opponents Open a New Front in Court

The most consequential cannabis policy change in half a century is no longer a question of whether it happens, but of who can still stop it — and this week, its opponents made their boldest move yet. A drug-testing industry group and a cannabis-focused biopharmaceutical company asked a federal appeals court to block the Trump administration from proceeding with marijuana rescheduling, arguing in a filing reported June 11–12 that cannabis remains a "dangerous drug that destroys lives." The petition lands at a delicate moment: the DEA's expedited rescheduling hearing is set to begin June 29 in Arlington, Virginia, and the challengers want it paused before it starts.

For anyone trying to make sense of where federal cannabis law actually stands, it helps to separate two things that happened months apart. In April, the administration moved FDA-approved and state-licensed medical marijuana to Schedule III. The broader reclassification — the one that would reshape the entire industry's tax and banking picture — is what the June 29 hearing addresses, and it is precisely that proceeding this lawsuit aims to freeze. For operators, the stakes are concrete: Schedule III would lift the 280E tax penalty that currently bars cannabis businesses from deducting ordinary expenses. For consumers, the immediate effect at the dispensary counter is minimal in the short term, but a healthier, less heavily taxed industry tends to mean more stable pricing and more competition over time.

The opposition isn't confined to the courts. A coalition of anti-marijuana groups and a pharmaceutical company also appealed the dismissal of a separate lawsuit challenging a federal plan to cover hemp products under Medicare, taking that fight to the D.C. Circuit. Together the two filings reveal a coordinated rearguard strategy: with the political winds favoring reform, opponents are turning to litigation to slow or unwind it.

Congress, meanwhile, sent mixed signals. On the restrictive side, a House Appropriations subcommittee approved a provision blocking federal workers' compensation programs from covering medical cannabis — and pointedly wrote that the prohibition would apply "regardless of any change in the scheduling of marijuana," a clear attempt to wall off one corner of federal policy from the coming reclassification. The full Appropriations Committee subsequently advanced the bill. On the reform side, the House's federal legalization bill picked up another cosponsor to reach 73, and a companion measure to let cannabis businesses list on U.S. stock exchanges climbed to five cosponsors — modest momentum, but momentum nonetheless. New federal data also underscored how much enforcement priorities have shifted: marijuana trafficking prosecutions hit a record low, down 62% over five years.

The week's other federal flashpoint was hemp. The White House Office of Management and Budget urged Congress to preserve access to full-spectrum CBD products by amending a sweeping hemp-derived cannabinoid ban scheduled to take effect later this year. The OMB asked lawmakers to update the statutory definition to allow "appropriate full-spectrum CBD products" while restricting those that "pose serious health risks" — a nuanced position that pleases neither prohibitionists nor the freewheeling hemp-THC market. For the millions of consumers who buy CBD wellness products and the retailers who stock them, the looming ban and any last-minute carve-out will determine whether a whole product category survives into 2027.

States supplied the most kinetic drama. In Virginia, Gov. Abigail Spanberger — who previously vetoed a commercialization bill — touted "really productive" negotiations to legalize adult-use sales through the state budget due by July 1. Compromise terms under discussion include a July 1, 2027 sales launch and an excise tax rising from 6% to 8% after two years, though the deal is far from sealed. In Pennsylvania, the Senate narrowly rejected a bill to create a Cannabis Control Board by a 27–23 vote, then immediately passed a 29–21 motion to reconsider, keeping it alive; the bill's sponsor later blamed Gov. Josh Shapiro for whipping Democratic votes against it. Rhode Island's governor signed a fix to residency requirements that had stalled business licensing.

The counter-reform machinery was busy, too. Idaho lawmakers approved ballot language for a constitutional amendment that would permanently bar voters from legalizing marijuana by initiative, and anti-legalization petition campaigns in Maine and Massachusetts faced accusations of "fraudulent and misleading" tactics, with the Massachusetts campaign firing a signature gatherer over the conduct.

The through-line is unmistakable: reform is advancing on multiple fronts while a determined opposition fights a disciplined holding action in courtrooms, committee rooms, and ballot drives. The June 29 DEA hearing now looms as the pivot point — and this week made clear that whatever the agency decides, the lawyers are not done.