Recommendations on the best travel weed gear are made by Leafly Picks editors after firsthand tests, extensive research, and internal debate. If you buy through links on this page, we may earn a small commission. Jetsetting. Galavanting. Roamin’ and ramblin’. Whatever you call getting from here to there, it’s better with weed, and we’re here […]
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Mother's Day and Memorial Day weekend fall back-to-back, which means you have two excellent excuses to shop for CBD, delta-9, and THCA.
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Since acting Attorney General Todd Blanch announced that state-legal medical marijuana would move to Schedule III, the commentary has been relentless — hot takes, doomsayers, and self-proclaimed experts flooding LinkedIn with conflicting interpretations. Much of it is speculative, overstated, and uneducated. This piece cuts through the noise and responds to the questions I have fielded the most about state medical programs.
The DOJ order shifts state-legal medical marijuana from Schedule I to Schedule III and establishes an optional DEA registration framework through which state-licensed operators may seek to participate. The confusion, on whether registration is mandatory, stems from confusion over two federal provisions: (1) 21 USC 811(d)(1)— a provision that suddenly everyone claims to understand, but few actually do; and (2) 26 USC 280E.
It largely didn’t for industry, until now. The industry spent years chasing legislative solutions, whether full legalization, SAFE Banking, or uplisting. This provision sat ignored, despite a handful of us arguing its importance. Legal and policy wonks like me were talking about 811(d)(1) to any operators and industry associations who would listen. All of them brushed us aside. Ironically, many operators who ignored us then are unlikely to obtain the maximum benefits from it now.
21 USC 811(d)(1) allows the Attorney General to “issue an order controlling such drug” if doing so is required by U.S. obligations under the Single Convention. There is an important distinction between that language and what actually occurred: that is, DEA didn’t reschedule a “drug”; instead, it rescheduled a program. Further, under U.S. law, what constitutes a “drug” is a determination to be made by FDA under the Food, Drug, & Cosmetic Act. These are likely two of the main arguments Smart Approaches to Marijuana (SAM) will make in its forthcoming litigation.
No, it does not. Tax code 280E prohibits deduction and credits for any trade or business trafficking in Schedule I or II substances. The order includes the following: “as a consequence of this rule, state licensees will no longer be subject to the deduction disallowance imposed by Section 280E.” Further, “[t]he final rule places in schedule III . . . marijuana subject to a state medical marijuana license.”
IRC 280E says nothing about DEA registration. The only qualification for schedule III placement, is that marijuana is subject to a state medical marijuana reprogram. Therefore, whether a state license operators is DEA registered is not a factor in whether it is operating with a schedule III substance. Only its state legality and license matters. For more information on the tax implications of this final rule, please read Vince Sliwoski’s blog post last week.
This question should be the first one operators ask , but surprisingly, it rarely is. If SAM, or anyone else challenging this rescheduling order prevails, all of this will be for naught. As noted above, there are substantial legal questions as to whether DEA exceeded its authority in issuing this order. I believe there is greater than a 50% chance that this order is stayed and ultimately overturned. It is not 100% certain, however, which is why I recently published a blog post calling DEA registration a “Calculated Risk.” If you already have a medical license and all that is required is $10,000–$15,000 to hire an attorney and apply for registration, you have much better odds than playing Powerball or going to Vegas.
This depends on who you ask. The U.S. has maintained for years that international drug treaty obligations do not apply to state-licensed programs. That position, vocalized by Patt Prugh at the 2024 CND (though the video has since been removed), has not been refuted under this administration. The U.S. position is that the international drug treaties “take a ‘highly respectful’ stance toward member states’ domestic policies,” and much of those obligations apply, subject to each member state’s constitutional limits.
Even with the recent rescheduling order, state-licensed medical operators without DEA registration remain federally illegal and fall outside treaty scope (though this is a heavily contested issue within the international treaty community). In the face of Canada and Uruguay legalizing recreational marijuana, the Netherlands’ coffee shop model, and the Dutch and Swiss scientific adult-use pilot programs, it is difficult to argue that applying the Single Convention’s constitutional limitation to state-legal, non-DEA-registered medical marijuana programs is inappropriate. Under the U.S.’ current position, only those operators that join the federal DEA registration apparatus would be required to comply with U.S. treaty obligations. Whether DEA will take this stance, however, is unknown. Under the rescheduling order’s wording, DEA could certainly apply those obligations to state-legal, but non-DEA-registered, operators. That said, enforcing these obligations would be a nightmare for DEA. Where will the funding and staffing come from?
Unevenly. Medical-only states stand to benefit most. Dual-license states, those with both medical and adult-use programs, face a harder path. The DEA application asks directly: “Will your firm be handling or dispensing recreational marijuana?” It would make sense if an honest “yes” results in denial. A fraudulent “no” would likely lead to worse.
There is no way DEA has the staff to personally review all applications, let alone implement the program commenced in the order. As such, it is likely DEA will take two steps to aid in review: (1) launch an initial AI review of all applications; and (2) deny as many applications as possible. Denying an application because the applicant also handles recreational marijuana seems obvious. That said, if you are a dual licensee, I still think it’s worth applying, just in case I am wrong.
Interstate transfers between DEA registrants are theoretically possible, but FDA has not clarified whether they are permissible under the Food, Drug, & Cosmetic Act. Until it does, such transfers carry legal risk. Enforcement discretion may fill the gap in practice, but operators should not rely on that.
Possibly. Internal transfers between a company’s own registered locations may not constitute a “sale” or “marketing” activity under the FDCA, potentially keeping federal food and drug law out of the picture. If so, state law governs what can ultimately be sold. Transfers between separately owned DEA registrations in different states, would remain subject to the FDC&A, so FDA guidance on this will be important. All of this remains unsettled, and operators should seek counsel before acting on that assumption.
State law controls DEA registration indirectly. Registration requires a valid state license. If a state enforces a ban on interstate transport through license suspension or revocation, federal authorization goes with it. Operators need to map their state-level exposure before pursuing DEA registration. If the importing state denies that transport, Dormant Commerce Clause implications would certainly follow. If the exporting state prohibits such transfers, however, it remains unclear whether the Dormant Commerce Clause would apply. What is clear is that in states where legislation has already legalized interstate transport, such transfers will likely carry far less legal uncertainty upon federal legality.
In limbo. The order does not clearly address tribal eligibility for DEA registration. The application references tribal law violations, but stops short of recognizing tribal licenses as a valid basis for registration. Tribal operators should consider applying while simultaneously pursuing advocacy. Waiting for clarity may mean waiting indefinitely.
21 CFR 1318 applies treaty obligations to DEA registrants operating with marijuana, so this section will certainly apply. The rescheduling order largely punts other requirements to state medical marijuana programs, leaving operators without a clear roadmap. DEA has promulgated an extensive body of regulations applicable to controlled substances and those who handle them (see 21 CFR 1300 et seq.) and it is not yet clear which of those regulations will be required of registered state-licensed operators, and which will be displaced by state law requirements.
What DEA has clarified, at least in part, is that holding a valid state license will allow registrants to bypass much of 21 CFR 1301, the section governing the registration process itself. Beyond that carve-out, however, the picture remains murky.
For now, operators pursuing registration are effectively agreeing to enter a federal regulatory framework without knowing its full contours. This is another dimension of the calculated risk that registration represents.
Presumably, state-legal medical operators have been filing taxes since inception, so responding to this question in the application will not suddenly make anything newly known to the federal government. Is it a risk? Yes. But is it more of a risk than what state-legal operators have already been doing? I don’t think so.
One thing all operators should do is ensure their employees (down to the budtenders) are comfortable with their names and Social Security numbers being provided to DEA. An operator can make this disclosure a condition of employment, but they should give employees advance notice and the option to leave if they prefer not to be disclosed. Disclosing without such notice could lead to legal liability.
Very little has changed. Medical marijuana patients remain federally illegal because the drug has not received FDA approval. Until further guidance is issued, patients should proceed as if the order does not exist: do not travel across state or international borders with marijuana, and understand that restrictions on housing and firearm ownership remain fully in effect.
I believe this order makes it less likely that Congress will pass an amendment or extend the effective date of the hemp ban. Many Republicans already oppose reversing the ban, and rescheduling has not helped. I believe many will stand firm in opposing any changes, simply as a stand against this rescheduling move by the Administration.
The bottom line: rescheduling is meaningful, but its practical impact is narrow, uneven, and still developing. Anyone telling you otherwise is getting ahead of the facts. If you are navigating these questions and want an objective, experienced perspective from practitioners who have been working through these issues for years — not weeks — we are happy to offer a free consultation. Reach out to our team anytime.
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Your May 2026 horoscopes arrive with intense, volatile energy, kicking off a month marked by emotional reactivity and deep introspection.
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For state-licensed medical marijuana operators, a narrow and potentially transformative window has opened–one that could position your business for future interstate and even global trade.
While the Acting Attorney General’s rescheduling order is likely to face legal challenges, the immediate reality is this: you have a 60-day opportunity to act. As of yesterday, April 28, state medical marijuana licensees may apply for DEA registration to manufacture (this includes cultivation and limited processing), to distribute, and to dispense medical marijuana.
The DEA dispensary application portal is already live, and applications for manufacturing and distribution are expected to follow the standard DEA Form 225 process.
We are not certain whether this framework will survive judicial review, and if so, to what extent. What is clear, however, is that only applicants who submit within this initial 60-day window are positioned for expedited review, which is to occur within six months of an applicant’s submission. The rescheduling order provides no guidance on future application rounds or timelines, leaving significant ambiguity for those who wait.
In practical terms, this creates a first-mover advantage. If DEA registration ultimately becomes the gateway to a federally recognized, and potentially global, medical cannabis market, early applicants will be best positioned to participate.
We describe this as a “lottery ticket” not because it is speculative, but because it requires an upfront investment with uncertain outcomes. Engaging experienced counsel and preparing a compliant application typically involves costs in the range of $10,000 to $15,000 (including the DEA fee), with additional costs depending on complexity, scope, and the number of DEA registrations sought. The bet is $10,000-$15,000 for a potential upside opportunity into the hundreds of thousands or millions of dollars.
For those prepared to move forward, we can help you navigate this process efficiently and strategically. Our team is one of very few that is experienced in DEA registrations. We can:
If you are considering pursuing DEA registration during this window, we encourage you to connect with our team to discuss your options. We are available to provide a complimentary consultation and help you evaluate whether this opportunity aligns with your business strategy.
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For recent posts on the rescheduling order, check out the following:
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The DOJ Final Order on marijuana rescheduling dropped last week. Acting Attorney General Todd Blanche ordered that “FDA-approved drug products containing marijuana, as well [as] marijuana in any form covered by a state medical marijuana licensing, be placed in Schedule III of the CSA.”
The Order went further than many of us anticipated. It also includes a short section on “Tax Implications.” Here is that section, in whole:
“The Acting Attorney General further notes that, as a consequence of this rule, state licensees will no longer be subject to the deduction disallowance imposed by Section 280E of the Internal Revenue Code, which applies only to businesses engaged in ‘trafficking in controlled substances . . . in a schedule I or II,’ 26 U.S.C. § 280E. Nothing in this rule constitutes a determination regarding federal tax liability, and qualifying state licensees should consult with tax counsel regarding the applicability of Section 280E to their specific circumstances.”
There is plenty to unpack in that paragraph.
The Order doesn’t define “state licensee.” However, “state medical marijuana license” is now defined at 21 CFR § 1300.01 as:
“a license issued by a state entity (or by a District of Columbia entity or a federal territorial entity) authorizing the licensee to manufacture, distribute, and/or dispense marijuana or products that contain marijuana for medical purposes.”
Taxpayers holding these licenses, presumably, are “state licensees.” Many of these medical marijuana sellers may finally escape the stifling grasp of Section 280E.
Reader, I said “may.”
In states that allow only medical marijuana (e.g. Florida, Oklahoma, Pennsylvania), things appear straightforward: that is, state-licensed operators have become 280E-exempt under the Order. The marijuana being produced, processed, transferred and sold in these states all goes to cardholders—at least theoretically—and all of that marijuana is now in schedule III.
In states with adult-use programs, the analysis could be complex. All states with adult-use marijuana programs also have medical marijuana programs. Most of these states have blended their programs to varying degrees. In some states, a plant may begin in the adult-use CTS, grown by a non-medical licensee, but evolve into a medical marijuana item somewhere along the supply chain. The resulting product may or may not be more potent, will likely be packaged differently, and may or may not be taxed. Invariably, though, it is transferred or sold to a medical marijuana cardholder. It has undergone a definitional transformation, if not a physical one.
The licensees in these mixed supply chains may be adult-use licensees, with “endorsements” or “registrations” or other permissions to create or handle medical marijuana products. At the grow level, the distinction is virtually meaningless—a marijuana plant is just a marijuana plant, after all. But, are these hybrid operators “state licensees” within the meaning of the Order? They handle medical marijuana, but they also traffic in non-medical marijuana. They may or may not segregate inputs; they may or may not segregate outputs. You can see where I’m going with this.
In this respect, DOJ stays in its lane. Further along, though, the Order repeats the paragraph on Section 280E that I quoted above, adding one striking sentence:
“The Administrator encourages the Secretary of the Treasury to consider providing retrospective relief from Section 280E liability for taxable years in which a state licensee operated under a state medical marijuana license.”
Retrospective relief from Section 280E would be the ultimate prize for many marijuana businesses, short of an entrée to interstate commerce. The possibility is utterly tantalizing. Could it actually happen?
It could, although the Treasury need not heed the “retrospective relief” suggestion. It operates independent of DOJ in the executive branch. That said, the IRS has granted retrospective relief to taxpayers on numerous occasions, most recently last month in relation to OBBA tax credits. OBBA was signed into law in July of 2025, yet the IRS will allow taxpayers to amend returns as far back as 2022 for purposes of making certain elections.
However the Service proceeds, marijuana taxpayers would be wise to heed the Order’s advice to consult with tax counsel. An exception involves tax counsel who argue that Section 280E doesn’t apply to any marijuana businesses whatsoever. In that case, please read this.
I’ll be watching three things.
First, I’ll be watching for Treasury guidance. On Thursday, April 23, the Treasury and IRS promptly announced such guidance is forthcoming. The press release forecasts “a transition rule providing that, for purposes of Section 280E, rescheduling generally will be considered to first apply for a business’s full taxable year that includes the effective date of the Final Order…”. For most marijuana businesses, that will be calendar year 2026.
Second, I’ll be watching for litigation. The Order will be litigated. The fundamental question is whether DOJ exceeded its authority in issuing the Order. Challengers will argue, inter alia, that 1) the Order undercut an ongoing rescheduling process, not yet withdrawn; 2) that the Order’s heavy reliance on international treaty compliance, and specifically, its permissive reading of a 2024 Office of Legal Counsel opinion on that issue, is flawed; and 3) that the bifurcation of marijuana into medical and non-medical channels by DOJ, outside of FDA purview, is statutorily incoherent.
Third, I’ll be watching for adult use rescheduling. In its press release announcing the Order, DOJ announced it would also “expedite the ongoing rulemaking process required to fully remove marijuana from Schedule I and place it in Schedule III under the Controlled Substances Act.” This rulemaking would apply to all marijuana, and not just medical marijuana. DOJ says DEA will “commence a new administrative hearing beginning June 26, 2026.” How that would work in an agency that no longer has any administrative law judges is a very good question. We’ll save that for another day.
For now, medical marijuana is in schedule III. State licensees should watch these further developments, but also focus on things that they can control. These include: 1) consulting with tax counsel; 2) revisiting accounting practices, especially where allocations to medical marijuana may be distinguishable from allocations to non-medical marijuana; and 3) recall that local tax laws still apply, including state laws limiting certain deductions for all marijuana businesses.
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The Acting Attorney General is getting the ball rolling on the rescheduling of cannabis from Schedule 1 to Schedule 3, earning praise from the cannabis industry.
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