We asked Snoop three burning questions. Find out Snoop Dogg's favorite strain, and 2 more hot takes from the legend.
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Yesterday afternoon, the Washington Post and other sources reported that President Trump is expected to issue an executive order directing federal agencies to reclassify marijuana, to Schedule III. That’s some sexy reportage, although WaPo’s sources cautioned that “Trump could still change his mind” and “[a] White House official said no final decisions have been made on rescheduling of marijuana.”
Still, it’s a story with legs and I want to revisit some important considerations—beyond my usual refrain that marijuana shouldn’t be scheduled at all. Here are some critical things to understand about a potential Schedule III move.
The WaPo story reports that an executive order may be in the cards. Most likely—and depending on the order’s contents—this would make for a more direct, decisive approach than the formal “statement” and “request” issued by President Biden in October of 2022, which led to a stymied rescheduling process.
This August, when Trump told reporters that his administration was considering rescheduling marijuana, I laid out the following options:
I noted:
One thing to address at the outset, though, is the oft-repeated fiction that Trump could simply re- or deschedule marijuana on his own, via executive order. He cannot. He could, however, direct the process much like Biden did, when Biden issued a 2022 executive order directing HHS to revisit the control status of marijuana. Essentially, Trump could say what he’d like to see, and it will probably happen—especially given the strict fealty shown to him by DOJ.
To that point, my colleague Jason Adelstone has made a compelling argument for a fifth option, which is that Trump could lean on Attorney General Pam Bondi to reschedule marijuana on her own, even without rulemaking, pursuant to 21 U.S.C. § 811(d)(1). Jason concluded that “all it would take is a press release and a pen.”
Given the novelty of that approach, and given the novelty of Bondi’s prohibitionist record, that outcome would surprise me. In my previous post I advocated for option #3, which is the publication of a final rule by DOJ. I explained:
Marijuana could then go to Schedule III (or wherever) within 30 or 60 days of rule publication. People could litigate that rule, sure. Given the strength of the HHS findings, though, and the clear statutory authority behind DOJ, it seems like an uphill battle.
Hopefully, this is the chosen path and the administration learns from the numerous, foreseeable errors of former President Biden, the Merrick Garland DOJ and Anne Milgram’s DEA, as that administration made its half-assed foray into Schedule III.
Schedule III has been a holy grail of sorts for the cannabis industry, primarily because marijuana businesses would finally be taxed like other businesses. I’ve explained:
If marijuana goes to Schedule III, the margins-crushing statute known as IRC § 280E would not apply, and the cannabis industry would change forever. That said, state-level taxation of cannabis will not change. Or, it may change for the worse, as states feel emboldened to raise cannabis-related taxes in the absence of § 280E.
. . . .
Still, I cannot emphasize enough that removal of § 280E would change the industry forever. Having worked with cannabis businesses for 13 years, I view taxation as the largest affront to marijuana businesses—more than banking access, intellectual property coverage, lack of bankruptcy, you name it. This would be HUGE.
We like to remind people that marijuana on Schedule III is not a universal solve. Here are the five most persistent issues, in my view:
Criminal penalties for individuals. The possession, distribution and sale of non-FDA, non-hemp cannabis would still be criminal acts. State and local laws would not be preempted in any respect. We could see another 200,000 local arrests, annually, in a Schedule III milieu.
Business headaches. Like end users, state-licensed cannabis businesses wouldn’t be immunized from theoretical federal prosecution. In addition, they would remain embargoed from bankruptcy courts, they would continue to struggle with trademarks, they would still pay a premium for many general services, and the intensive, state-level regulation to which they are subject would hardly abate.
Research headaches. Contrary to popular belief, federal research will not become easier without significant Congressional and administrative intervention. That one is a real head-scratcher, but it’s our forecast.
Banking issues. Although banking isn’t the headache it once was, it’s still a pain. At Schedule III, marijuana would still be a controlled substance and state-licensed businesses would still be “trafficking” in that controlled substance, contrary to federal law. Banks would continue to struggle with this dynamic.
Hemp. The intoxicating hemp products industry took a huge kick in the shorts last month, when Congress passed P.L. 119-37. Most of these products won’t survive the new law. The state-legal marijuana industry stands to benefit from less competition, and if marijuana goes to Schedule III, those operators will be less inclined to work with the hemp crowd on a “universal solve” for federal cannabis policy.
I hope it happens, and Christmas comes early for all of our industry clients. That said, I’m cautious after watching and writing about marijuana rescheduling rumors for the better part of a decade.
If we do get confirmation on this WaPo reporting, though, rest assured— we’ll be all over it. In the meantime, check out the following posts:
The post Is Marijuana Rescheduling Finally Happening? What to Know, Now. appeared first on Harris Sliwoski LLP.
Last month, I gave my big-picture thoughts on the intoxicating hemp products ban under P.L. 119-37, concluding that enforcement was an open question. That question has started to pick up steam, particularly following a Congressional Research Service report published on December 3rd.
The CRS report provides:
…it remains unclear if and how federal law enforcement will enforce the new prohibitions when the new definition goes into effect. In marijuana’s case, the federal response has largely been to allow states to implement their own marijuana laws despite the fact that state-regulated activities may violate the CSA. If intoxicating hemp products persist on the market after the change to their legal status, it is possible they could be subject to the same criminal and collateral issues as marijuana. It also remains to be seen whether FDA will pursue additional options to remove these items from the market. Both FDA and DEA may lack the resources to broadly enforce the laws prohibiting intoxicating hemp products on the market.
It concludes:
Congress may choose to exercise oversight over federal enforcement priorities regarding state-regulated cannabis activities. FDA (under the FDCA) and DEA (under the CSA), in coordination with the Department of Justice, have a range of civil and criminal remedies they may use in efforts to exercise control over these activities.
I’ve promoted CRS reports in the past, and this one is certainly timely. Enforcement considerations are paramount now, just as they were in the early days of state-legal marijuana programs.
P.L. 119-37 doesn’t take effect until November 12, 2026, but its effects are already being felt. I’ve spoken with service providers to the cannabis industry — most notably financial institution clients — who are reigning in their offerings to the hemp industry in response to the new law. This follows on actual federal government programs, such as the Small Business Administration, which already views many hemp businesses as non grata.
But there is a disconnect between the outlook of service providers, in some cases, and what many seed sellers and vendors of intoxicating hemp products are saying. Many operators display high confidence that P.L. 119-37 will somehow be reversed prior to taking effect; or that if it isn’t, it won’t be enforced. It’s a ballsy gambit– one step further than exploiting the 2018 Farm Bill’s suspect “loophole.”
It’s true that the feds have generally let state-legal cannabis actors alone; and it’s true that the feds never really enforced the 2018 Farm Bill. That’s been the case in respect of purported “loophole” products, and also with hemp-CBD food and beverages— which FDA has maintained violate the FDCA Act since day one.
P.L. 119-37 is different in a few respects, though. First, unlike state-legal marijuana, many intoxicating hemp products are sold in states that do not expressly allow their sale. Sellers are simply operating in a “vacuum” of sorts, citing a federal law loophole, without state law prohibitions. Second, as to marijuana plant seeds, DEA had opined that sales were legal, because those seeds had not yet expressed THC and were still statutory “hemp.” That’s no longer the case.
Let’s consider a scenario (which is the mostly likely scenario, in my opinion) that P.L. 119-37 remains on the books come November 12, 2026. The $20 billion question, as I mentioned last month, is whether there will be enforcement. I think it’s possible at the state level, and also at the federal level.
At the federal level, I wouldn’t expect a coordinated crackdown by DEA and U.S. attorneys. That would be too expensive, too unwieldy. Instead, I think targeted enforcement of select larger players — perhaps including warning letters next summer — is the most likely path. In that scenario, the chilling effect I mentioned for service providers would be magnified, and it’s likely that many operators would also stand down.
I also think states will continue to get on the prohibition bandwagon, as I explained to MJ BizDaily last month. Some already are, but you’d see more of this in an environment where the feds throw their backs into it, enforcement-wise, and where de jure prohibition is not the whole picture.
Next November seems far away, but nearly a month has come and gone since P.L. 119-37 passed. For the next 11 months, enforcement is going to be the biggest question of all. That will be true whether or not P.L. 119-37 stays on the books as written, or whether the put-upon industry claws back some of its “loophole.” If so, it will need to overcome resistance from various sources: the state-legal marijuana industry, prohibitionists at large, and legislators who either don’t understand the issues, or are offended by ideas like sales of “gas station weed” and sales to minors.
One thing is for certain: 2026 will be another interesting year for cannabis.
For more on this topic, check out the following posts:
The post Will the Feds Enforce the Ban on Intoxicating Hemp Products, and Seed Sales? appeared first on Harris Sliwoski LLP.
This holiday season will be a cold one, but AmeriCannaRx is helping you and yours stay warm with hot deals all December long. They are offering a gigantic 60% off discount on select products throughout the end of the year, so you’ll have more than enough to stuff your stocking. They’ll even price match any […]
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Medical cannabis is available from Greenlight at locations all across West Virginia. Their locations all feature a wide selection of brands and knowledgeable staff. Patients with a medical card are welcome between 10:00 a.m. and 8:00 p.m. every day of the week. Do not operate a vehicle or machinery under the influence of this drug. […]
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We’re excited to announce that Harris Sliwoski attorney Jason Adelstone will speak at MJBizCon in Las Vegas this Wednesday, December 3, joining the industry’s largest global gathering of cannabis entrepreneurs, investors, operators, and policymakers.
Jason is widely regarded for his expertise in the complex interplay between international drug treaties and domestic cannabis legalization. At MJBizCon, he’ll serve as a panelist for Global Cannabis Outlook: Trends, Policy Shifts & Market Opportunities Around the World on December 3 at 2:50 PM.
This session brings together international experts to examine how regulatory frameworks, treaty interpretations, capital movement, and evolving laws are shaping the global cannabis economy. Jason will contribute his perspective on international compliance pathways, regulatory strategy, and how U.S. policy interacts with international law.
If you’ll be attending and would like to meet Jason during the conference, we’d love to hear from you. Feel free to reach out ahead of time and we’ll help coordinate.
Stay tuned — we’ll be sharing key takeaways from Jason’s MJBizCon presentation after the event.
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