SAM Files Lawsuit to Block Cannabis Rescheduling to Schedule III

What the SAM Cannabis Rescheduling Lawsuit Seeks

The lawsuit filed by SAM and NDASA targets the DOJ's April 23, 2026 rescheduling order, which moved state-legal medical cannabis and FDA-approved cannabis products from Schedule I to Schedule III of the Controlled Substances Act. This initial rescheduling was the first concrete regulatory action to come out of the broader rescheduling process that has been working its way through federal agencies since 2023.

SAM, a prominent anti-legalization organization founded by former congressman Patrick Kennedy, and NDASA, which represents drug testing companies and professionals, claim they are "aggrieved" parties under the reform. Their argument centers on the Administrative Procedure Act (APA), contending that the Trump administration bypassed required statutory steps in rushing the rescheduling order to completion.

The choice of the DC Circuit for this challenge is strategic. The court has long served as the premier venue for challenges to federal regulatory actions, and its judges have extensive experience with administrative law questions. A successful challenge here could not only halt the April 23 order but also throw the broader rescheduling timeline into chaos.

Former Attorney General William Barr's Role in the Challenge

The decision to bring on William Barr's law firm adds considerable weight to the legal challenge. Barr served as Attorney General under both President George H.W. Bush and President Donald Trump, giving him intimate knowledge of DOJ operations and the Controlled Substances Act's regulatory framework.

During his tenure as AG under Trump's first term, Barr was known for maintaining a cautious stance on cannabis policy, even as political momentum for reform grew across both parties. His firm's involvement signals that the challengers are treating this as a serious legal battle, not merely a protest filing.

The legal team is expected to argue that the DOJ did not follow the procedural requirements laid out in the Controlled Substances Act and the APA, which mandate specific findings, public comment periods, and interagency consultations before controlled substance schedules can be changed. Whether these arguments gain traction will depend on the specifics of how DOJ structured its rulemaking process.

The Administrative Procedure Act Challenge Explained

At the heart of the lawsuit is a claim that the rescheduling order violated the Administrative Procedure Act, the federal law that governs how agencies create and implement rules. The APA requires that agencies follow specific procedures including notice-and-comment rulemaking, adequate factual support for their decisions, and consideration of relevant factors.

SAM and NDASA allege that the Trump administration took shortcuts in the rescheduling process, bypassing required statutory steps in its push to complete the reform. The APA provides courts with authority to strike down agency actions that are "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law."

For the challengers, the argument is straightforward. They contend that rescheduling cannabis requires a thorough scientific and medical evaluation, proper interagency coordination between the DEA and HHS, and a full opportunity for public input. If they can convince the court that any of these steps were inadequately performed, the order could be vacated.

However, legal observers note that the DOJ has had years to build its rescheduling record, beginning with the HHS recommendation to reschedule in August 2023. The Trump administration's executive orders accelerated the timeline, but the underlying scientific review had been in progress for some time.

Current Status of Cannabis Rescheduling in 2026

The legal landscape around cannabis rescheduling is moving on multiple parallel tracks. The April 23, 2026 order that moved state-legal medical cannabis and FDA-approved cannabis products to Schedule III is the first completed action, but it represents only a partial rescheduling.

A broader rescheduling process covering all cannabis is still underway, with an expedited hearing scheduled to begin on June 29, 2026. This hearing will address whether cannabis as a whole should be moved from Schedule I, a category reserved for substances with high abuse potential and no accepted medical use, to Schedule III, which includes drugs like ketamine and testosterone that are regulated but legally prescribable.

The April 23 order remains in effect and carries real regulatory consequences unless the court grants emergency relief. The challengers have asked for such relief, but courts generally set a high bar for emergency stays of agency actions, requiring a showing that the challengers are likely to succeed on the merits and that they will suffer irreparable harm without immediate intervention.

For the cannabis industry, the order's continued enforcement means that qualifying medical cannabis operations and FDA-approved cannabis products are now subject to Schedule III regulations rather than Schedule I, affecting everything from tax treatment under Section 280E to research access and banking relationships.

What SAM and NDASA Stand to Lose From Rescheduling

Understanding why SAM and NDASA filed this lawsuit requires understanding what they stand to lose from successful rescheduling. SAM has built its organizational identity around opposing marijuana legalization and commercialization, arguing that loosening cannabis restrictions creates public health risks, particularly for young people.

Founded in 2013, SAM has been one of the most visible anti-legalization voices in Washington, lobbying against state ballot measures and federal reform bills alike. Rescheduling undercuts a central pillar of SAM's messaging by acknowledging that cannabis has accepted medical uses and a lower abuse potential than its Schedule I classification suggested.

NDASA's interests are more directly financial. The organization represents companies and professionals involved in workplace drug screening. Cannabis rescheduling could accelerate the already growing trend of employers removing marijuana from pre-employment and workplace drug testing panels. Several states have already passed laws prohibiting employers from testing for cannabis or from making employment decisions based on positive cannabis tests for off-duty use.

If rescheduling leads to broader workplace policy changes, the drug testing industry could see reduced demand for cannabis-specific screening, directly impacting NDASA's membership. The organizations' claim of being "aggrieved" by the reform stems from these organizational and commercial stakes.

Implications for Federal Cannabis Policy and Industry

The outcome of this lawsuit could shape federal cannabis policy for years to come. If the court grants emergency relief and stays the April 23 order, it would create immediate uncertainty for cannabis businesses that have begun operating under Schedule III expectations, particularly regarding tax obligations and banking access.

A full reversal of the rescheduling order would be an even more significant setback, potentially stalling the broader rescheduling process and forcing the DOJ to restart portions of its regulatory work. However, legal experts note that courts are generally reluctant to overturn completed agency rulemakings, particularly when the underlying scientific record supports the agency's decision.

The cannabis industry is watching this case closely. Trade organizations including the National Cannabis Industry Association and the U.S. Cannabis Council have indicated they will likely seek to intervene in the case on the side of the government, defending the rescheduling order. Their involvement could add additional legal resources and arguments to support the DOJ's position.

For investors and operators, the lawsuit introduces a new layer of uncertainty into an already complex regulatory environment. While the rescheduling order remains in effect for now, the possibility of judicial intervention means that businesses should be cautious about making irreversible decisions based solely on the current Schedule III classification.

What Happens Next in the Cannabis Rescheduling Legal Battle

The immediate next steps in this case will likely determine its trajectory. The challengers have requested expedited briefing and consideration, and the court will need to decide whether to grant emergency relief while the case proceeds on the merits.

Key dates to watch include the June 29 start of the expedited hearing on broader rescheduling, which could interact with the lawsuit in unpredictable ways. If the court stays the April 23 order but the broader rescheduling process continues on schedule, the result could be a fragmented regulatory landscape where different categories of cannabis products are subject to different scheduling rules.

The DC Circuit's decision could ultimately be appealed to the Supreme Court, though that would add months or years to the timeline. In the meantime, the cannabis industry finds itself in a familiar position of operating under legal uncertainty while hoping that the arc of federal policy continues to bend toward reform.

For consumers and patients who rely on state-legal medical cannabis, the practical impact of the lawsuit may be limited in the near term. State programs continue to operate under their own regulatory frameworks regardless of federal scheduling, and the rescheduling order's effects have primarily been felt in tax and financial services contexts rather than in direct patient access.

The case represents a significant test of whether opponents of cannabis reform can use the courts to slow or reverse regulatory changes that have been building political momentum for over a decade. The answer will have implications not only for cannabis policy but for the broader question of how quickly federal drug policy can evolve in response to changing scientific evidence and public opinion.

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