DEA June 29 Hearing Could Reschedule All Marijuana to Schedule III

The Next Big Step: Why June 29 Matters for Cannabis

The Department of Justice's April 23 order reclassifying state-licensed medical marijuana from Schedule I to Schedule III sent shockwaves through the cannabis industry. But the bigger battle is yet to come. On June 29, 2026, the Drug Enforcement Administration will convene an expedited evidentiary hearing that could determine whether all marijuana—including adult-use recreational cannabis—moves to Schedule III under the Controlled Substances Act.

This isn't just another bureaucratic proceeding. The outcome of this hearing could fundamentally reshape the American cannabis landscape, affecting everything from interstate commerce to banking access to how 40 million recreational consumers interact with the plant.

What the April 23 Order Actually Did

Acting Attorney General Todd Blanche's order immediately moved two categories of marijuana products from Schedule I to Schedule III: FDA-approved marijuana products and cannabis products regulated under a qualifying state-issued medical license. The reclassification places these products alongside drugs like ketamine, Tylenol with codeine, and anabolic steroids.

For medical cannabis operators, the impact was immediate. Section 280E of the Internal Revenue Code—which prevented cannabis businesses from deducting standard operating expenses—no longer applies to Schedule III substances. Effective tax rates that were running between 60 and 80 percent are expected to drop dramatically for medical-licensed operators.

But recreational cannabis? That remains in Schedule I—for now.

The June 29 Hearing: What's on the Table

The DOJ's two-phase approach separates the immediate medical reclassification from the broader question of all cannabis. The expedited hearing beginning June 29 is designed to conclude no later than July 15, 2026, making this one of the fastest rescheduling proceedings in DEA history.

The central question before the administrative law judge: should all marijuana, regardless of whether it's produced under a medical or recreational license, be moved to Schedule III?

Industry observers note that the compressed timeline suggests the administration wants resolution before the November midterm elections. The hearing will accept testimony from public health experts, law enforcement officials, cannabis researchers, and industry stakeholders.

What Full Rescheduling Would Mean

If the hearing results in a favorable ruling and the DEA moves all cannabis to Schedule III, the effects would cascade across the industry.

Tax Relief Across the Board

The most immediate impact would be extending 280E tax relief to all state-licensed cannabis businesses, not just medical operators. Multi-state operators like Curaleaf, Green Thumb Industries, and Trulieve—which serve both medical and recreational markets—would see their full operations benefit from standard business deductions.

Banking and Financial Services

While Schedule III classification doesn't automatically open the federal banking system to cannabis, it removes significant barriers. Financial institutions would face less regulatory risk in serving cannabis clients, potentially accelerating the SAFE Banking provisions that have stalled in Congress for years.

Research Expansion

Medical marijuana researchers would no longer need onerous Schedule I licenses to study cannabis. Full rescheduling would extend this benefit to researchers studying recreational use patterns, social impacts, and product safety—areas where data is desperately needed.

Interstate Commerce Questions

Perhaps the most complex question involves interstate trade. Cannabis remains federally illegal for recreational purposes even under Schedule III, and interstate commerce restrictions would likely remain intact. However, legal experts suggest that full rescheduling could create a pathway for eventual federal regulation of interstate cannabis commerce.

The Opposition Is Already Mobilizing

Smart Approaches to Marijuana (SAM), a prominent anti-legalization advocacy organization, announced immediately after the April 23 order that it would be "taking legal action immediately." The group argues that rescheduling bypasses proper legislative process and could accelerate youth access to cannabis.

Legal challenges are expected to focus on whether the executive branch has the authority to effectively decriminalize a substance through scheduling alone, or whether Congress must act. Constitutional scholars are divided on the question, with some arguing that the Controlled Substances Act grants the Attorney General broad discretion over scheduling decisions.

What Happens Between Now and June 29

The weeks leading up to the hearing will be critical. Interested parties must file notices of intent to participate, and the scope of acceptable testimony will be defined by the administrative law judge. Cannabis industry trade groups—including the National Cannabis Industry Association and the Cannabis Trade Federation—are expected to submit extensive documentation supporting rescheduling.

Meanwhile, states are watching closely. The nine states with cannabis reform ballot measures scheduled for November 3, 2026, may find their campaigns shaped by the hearing's outcome. A favorable ruling could bolster legalization efforts; an unfavorable one could energize opposition movements.

The Bigger Picture

The June 29 hearing represents the culmination of a decades-long shift in American attitudes toward cannabis. Gallup polling consistently shows over 70 percent of Americans favor legalization, and the BDSA market research firm predicts $47 billion in legal cannabis sales in 2026.

Whether the DEA hearing delivers full rescheduling or falls short, the direction of travel is clear. The question is no longer whether cannabis policy will change at the federal level, but how quickly and completely that change will come.

For the cannabis industry—and the millions of Americans who use cannabis—June 29 can't come soon enough.

Whatever the DEA decides on June 29, shoppers can already see which retailers carry compliant medical and recreational menus today on Budpedia's cannabis dispensary directory — 7,400+ verified dispensaries across every legal state.