The DEA Plans to Reschedule Marijuana: What Happens Next?

The US Drug Enforcement Agency (DEA) is moving forward with plans to move marijuana from a Schedule I to a Schedule III controlled substance under the Controlled Substance Act (CSA), the US Department of Justice officials announced this week. 

First reported by the Associated Press and since confirmed by Medscape Medical News through a US Department of Justice spokesperson, the news made international headlines. Despite the media splash, the final rule is still months away.

How did we get here? What happens next? What impact might rescheduling have on clinicians, patients, researchers, and the medical cannabis industry? 

Why Reschedule? Why Now? 

The DEA's decision is based on a 2023 determination from the US Food and Drug Administration (FDA) that marijuana has a legitimate medical use and should be moved to Schedule III. 

DEA defines Schedule I drugs as those with no currently accepted medical use and a high potential for abuse. That class includes heroin, LSD, and ecstasy. Schedule III drugs have a moderate to low potential for physical and psychological dependence and have a currently accepted medical use. This class includes ketamine, acetaminophen with codeine, and buprenorphine. 

Even though the manufacturing, distribution, sale, and use of marijuana has long violated federal law, 38 states and Washington, DC, have legalized medical cannabis, and 24 states and DC have legalized its recreational use. 

Congress has allowed states leeway for the distribution and use of medical marijuana, and current and previous presidential administrations have chosen not to aggressively pursue prosecution of state-allowed marijuana use, the Congressional Research Service (CRS) reports. 

Pressure to address the conflict between federal and state laws and an increasing interest in drug development of cannabis and cannabis-derived products probably contributed to the DEA's decision, said Stephen Strakowski, MD, professor, and vice chair of psychiatry at Indiana University in Indianapolis, and professor and associate vice president at University of Texas in Austin.

"The trend toward legalization is everywhere and even though nationally the feds in this instance are lagging the states, the pressure to legalize has been intense for 50 years and it's not surprising that the DEA is finally following that lead," Strakowski told Medscape Medical News. 

How Does Rescheduling Work? What's the Timeline?

The DEA will submit a formal rule proposing that marijuana be moved from Schedule I to Schedule III to the White House Office of Management and Budget. The timing of the submission is unclear. 

Once the proposed rule is posted to the Federal Register, there will be a public comment period, which usually lasts 30-60 days.

"This will likely generate a lot of public comment," Robert Mikos, JD, LaRoche Family Chair in Law at Vanderbilt University Law School in Nashville, told Medscape Medical News. "Then the agency has to go back and wade through those comments and decide if they want to proceed with the rule as proposed or modify it."

A final rule will probably be posted before the end of the current presidential term in January, Mikos said. While a lawsuit blocking its implementation is possible, there is a "low chance that a court would block this," he added.

How Will Rescheduling Affect Medical Marijuana?

For medical marijuana, changing the drug to a Schedule III means that it can legally be prescribed but only in states that have legalized medical cannabis, Mikos said. 

"If you're a patient in a state with a medical marijuana law and your physician gives you a prescription for medical marijuana and you possess it, you will no longer be guilty of a federal crime," he said.

Rescheduling could also benefit patients who receive care through the Veterans Administration (VA), Mikos said. For several years, the VA has had a policy that blocked clinicians from prescribing medical marijuana because as a Schedule I drug, it was determined to have no accepted medical use. 

"It's possible the VA may drop that policy once the drug gets rescheduled. If you're in a medical marijuana state, if you're a VA patient, and you don't want to spend the extra money to go outside that system, this will have meaningful impact on their lives," Mikos said.

But what about patients living in states that have not legalized medical cannabis? 

"You still wouldn't be committing a federal crime, but you could be violating state law," Mikos said. "That's a much more salient consideration because if you look at who goes after individuals who possess small amounts of drugs, the state handles 99% of those cases." 

The manufacture, distribution, and possession of recreational marijuana would remain illegal under federal law.

What Does It Mean for Medical Marijuana Dispensaries?

Though rescheduling makes it legal for clinicians to prescribe medical marijuana and for patients to use it, the actual sale of the drug will remain illegal under federal law because rescheduling only changes prescribing under the CSA, Mikos said.

"If you're a dispensary and you sell it, even if it's to somebody who's got a prescription, you're still probably violating the Food, Drug and Cosmetics Act. Rescheduling doesn't change that," he said. 

"Even assuming the DEA follows through with this and it doesn't come undone at some future date, the industry is still going struggle to comply with the Controlled Substances Act post-rescheduling because that statute is going to continue to impose a number of regulations on the industry," Mikos added.

However, rescheduling would change the tax status of the estimated 12,000-15,000 state-licensed cannabis dispensaries in the United States, allowing access to certain tax deductions that are unavailable to sales involving Schedule I controlled substances, James Daily, JD, MS, with Center for Empirical Research in the Law at Washington University School of Law in St. Louis, told Medscape Medical News.

"Many cannabis businesses do in fact pay federal taxes, but the inability to take any federal tax credits or deductions means that their effective tax rate is much higher than it would otherwise be," Daily said. 

Although new federal tax deductions would likely available to cannabis businesses if marijuana were rescheduled to Schedule III, "their business would still be in violation of federal law," Daily said. 

"This creates a further tension between state and federal law, which could be resolved by further legalization or it could be resolved by extending the prohibition on tax deductions to include cannabis and not just Schedule I and II drugs," he added.

Will Rescheduling Make It Easier to Conduct Cannabis-Related Research? 

Research on medical cannabis has been stymied by FDA and DEA regulations regarding the study of Schedule I controlled substances. Although rescheduling could lift that barrier, other challenges would remain.

"Schedule III drugs can be more easily researched, but it's unclear if, for example, a clinical trial could lawfully obtain the cannabis from a dispensary or if they would still have to go through the one legal federal supplier of cannabis," Daily said. 

The FDA reports having received more than 800 investigational new drug applications for and pre-investigational new drug applications related to cannabis and cannabis-derived products since the 1970s, the agency reports. To date, the FDA has not approved any marketing drug applications for cannabis for the treatment of any disease or condition. 

In January 2023, the agency published updated guidelines for researchers and sponsors interested in developing drugs containing cannabis or cannabis-derived compounds. 

It's unclear whether those guidelines would be updated if the rescheduling moves forward. 

Does Rescheduling Marijuana Pose Any Risk? 

In its report to the DEA that marijuana be rescheduled, the FDA was careful to note that the agency's recommendation is "not meant to imply that safety and effectiveness have been established for marijuana that would support FDA approval of a marijuana drug product for a particular indication."

That's a notation that clinicians and patients should take to heart, Strakowski said. 

"It's important to remind people that Schedule III drugs, by definition, have addiction and other side effect risks," he said. "The celebrity marketing that sits behind a lot of this is incompletely informed. It's portrayed as fun and harmless in almost every movie and conversation you see, and we know that's not true."

Previous studies have linked cannabis to increased risk for mania, anxiety disorders, and schizophrenia. 

"It is increasingly clear that marijuana use is linked to poor outcomes in people who struggle with mental illness," Strakowski said. "We have no evidence that it can help you but there is evidence that it can harm you."

Strakowski likens cannabis use to alcohol, which is a known depressant that is associated with worse outcomes in people with mental illness. 

"I think with cannabis, we don't know enough about it yet, but we do know that it does have some anxiety risks," he said. "The risks in people with mental illness are simply different than in people who don't have mental illness."

Strakowski, Mikos, and Daily report no relevant disclosures. 

Kelli Whitlock Burton is an assistant managing editor for Medscape who covers neurology and psychiatry.