August 28, 2026
Post-hearing briefs in the federal marijuana rescheduling case were due August 17, and the most notable one came from the Drug Enforcement Administration itself. The agency told the judge that marijuana belongs in Schedule III, writing that its "abuse potential and dependency profile most align with those substances in Schedule III."
The record is closed. Chief Administrative Law Judge Derek Julius now writes a recommendation, and the cannabis rescheduling recommendation he produces decides the one piece the April order left alone: adult-use.
The Justice Department's final order effective April 28 moved two things to Schedule III: FDA-approved drug products containing marijuana, and marijuana sold under a qualifying state medical license. Everything else, including every adult-use gram sold in a recreational state, stayed in Schedule I.
That split is why Q2 earnings looked the way they did. Holders of state medical licenses stopped being subject to Section 280E, and Green Thumb's income tax line fell from $21.6 million to $12.5 million year over year. Operators with heavy adult-use mixes got a fraction of that.
The same order set the expedited hearing that ran June 29 through July 15 to decide whether the rest of the plant follows.
The government's brief leans on the 2023 HHS finding that marijuana has accepted medical use for chronic pain, anorexia, and chemotherapy-induced nausea and vomiting, then argues the abuse and dependence profile fits Schedule III better than Schedule I or II.
The opposition is a coalition of prohibition groups and state law enforcement. Smart Approaches to Marijuana filed alongside Idaho, Indiana, and Nebraska, arguing the government never carried its burden. The Tennessee Bureau of Investigation challenged the legality of the process. The National Drug and Alcohol Screening Association raised a narrower point worth noting: Schedule III could strip federal drug-testing authority for transportation workers.
None of those parties has to win outright. They only have to give a reviewing court something to work with later.
This is the part most coverage glosses. The regulations tell Julius to issue his recommended decision "as soon as practicable," which is not a deadline. Parties then get 20 days to file exceptions. No sooner than 25 days after issuing the report, he certifies the record to DEA Administrator Terrance Cole, who writes the final order. Cole is not bound by the recommendation.
So the earliest realistic sequence is a recommendation, roughly seven weeks of procedure, then an administrator's decision on no schedule at all. The corrected hearing transcript was ordered public by August 26, which is the only firm date on the calendar right now.
Anyone modeling a Q4 change should plan for a recommendation this fall and a final order that may land well into 2027.
Not the license, not the shelf, not the state rules. Rescheduling is a tax and research event, not a commercial one. A Schedule III finding for adult-use would end 280E for the remainder of an operator's revenue, which changes what those operators can spend, not what they are allowed to sell. Verano put the medical share already covered at roughly 60% of its retail revenue, so the exposed remainder is substantial and varies by state mix.
That matters for vendors in a specific way. Operators have spent a decade paying tax on gross profit, and the ones that survived did it by refusing to spend. A second tranche of 280E relief lands as free cash in businesses that have deferred equipment, software, and packaging decisions for years. The purchase orders follow the tax line by a quarter or two, not the same week.
The practical move is to know which of your accounts are medical-heavy and already have the relief, and which are adult-use-dependent and still waiting. Those two groups are on different buying timelines right now.
None of this is legal or tax advice. Operators sizing their own 280E exposure should confirm it with counsel, since the answer turns on license type and state mix rather than on the headline.
Is marijuana Schedule III now? Partly. FDA-approved marijuana products and state-licensed medical marijuana moved to Schedule III effective April 28, 2026. Adult-use marijuana remains in Schedule I pending this proceeding.
When will the judge issue the rescheduling recommendation? No deadline exists. The rules say "as soon as practicable." After it issues, parties have 20 days to file exceptions and the record goes to the DEA Administrator no sooner than 25 days out.
Who makes the final decision? DEA Administrator Terrance Cole issues the final order. The administrative law judge's recommendation is advisory.
Does rescheduling make cannabis federally legal? No. Schedule III keeps marijuana a controlled substance. It changes tax treatment under 280E and eases research restrictions. State licensing still governs who can sell.
Medical-heavy and adult-use-heavy operators are on different spending timelines this year, and the license type is in the record. See verified, owner-level contacts for licensed dispensaries across six states. There is a free preview at holdenleads.com.
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