The DEA Hearing Left Adult-Use Cannabis on Schedule I

Federal scientists told a DEA judge that cannabis causes fewer overdose deaths than alcohol, heroin, and six other drugs, in an 11-day hearing that closed July 15, 2026.

That record did not finish the job. State-licensed medical marijuana had already moved to Schedule III in April. Adult-use cannabis is still Schedule I, and the judge has not issued a recommendation.

State-Licensed Medical Marijuana Is Already Schedule III

On April 23, 2026, the Justice Department and the Drug Enforcement Administration announced an order placing state-licensed medical marijuana in Schedule III, along with FDA-approved drug products that contain marijuana. The order took effect April 28, 2026. Acting Attorney General Todd Blanche used his authority under the Single Convention on Narcotic Drugs, and he framed the move as recognition of state medical programs that have been running for years.

The Department of Justice is delivering on President Trump’s promise to expand Americans’ access to medical treatment options.

Todd Blanche, Acting Attorney General, Justice Department announcement

DEA Administrator Terry Cole said the agency was moving the hearing process forward under that direction, and that agents would keep targeting cartels and fentanyl. The same package withdrew the Biden-era hearing notice from August 29, 2024, and set a new evidentiary hearing for June 29, 2026, on whether the rest of marijuana should follow medical product into Schedule III. The original proposal to transfer marijuana had been published May 21, 2024.

The April order did not legalize adult-use sales, open interstate commerce, or create a federal prescription market for smoked cannabis. It drew a line through the plant. Medical product that sits under a qualifying state license, or under an FDA approval, is now a Schedule III substance. Everything else in the CSA definition of marijuana remained Schedule I when the summer hearing opened.

TWO FEDERAL TRACKS AFTER APRIL

Treasury and the IRS said they would issue tax guidance after the April order, including how mixed operators should apportion expenses between Schedule III medical activity and Schedule I adult-use activity. That split is the business story the opening-day science was asked to resolve, or to freeze.

FDA Scientists Compared Cannabis With Alcohol and Opioids

James J. Schwartz, an attorney in the DEA’s Diversion Section, told the room on June 29, 2026, that the agency was not only the proponent of the proposed transfer. It supports it. He tried to keep the hearing on one legal question under the Controlled Substances Act: whether marijuana has a currently accepted medical use. A substance with at least one accepted medical use cannot stay in Schedule I.

Dr. Dominic Chiapperino, director of the Controlled Substance Staff at the FDA’s Center for Drug Evaluation and Research, was the government’s first witness. He had led a 10-month review. His team used five data sources, including national surveys, peer-reviewed literature, state program data, and the approved dronabinol medicines. They found currently accepted medical use for three conditions: anorexia related to a medical condition, chemotherapy-induced nausea and vomiting, and pain.

FDA’S HEARING FIGURES

• Pain evidence: The agency reviewed 39 clinical trials, with the strongest findings around neuropathic pain.
• Three accepted uses: Anorexia related to a medical condition, chemotherapy-induced nausea and vomiting, and pain.
• Eight comparators: Heroin, fentanyl, oxycodone, hydrocodone, cocaine, ketamine, benzodiazepines, and alcohol.
• Overdose finding: Cannabis showed fewer overdose deaths than all eight; fatality reports usually pointed to accidents or self-harm, not direct toxicity.

On withdrawal, Chiapperino’s analysis put cannabis next to tobacco, with irritability and restlessness. Alcohol withdrawal can include seizures and death. That is the comparison that traveled. It is also the comparison that does not, by itself, change the tax line in the table above.

Opponents spent the first two days on a different fight: which medical-use test the government was allowed to use. For years DEA applied a five-part test that required, among other things, known and reproducible chemistry. A plant with many active compounds fails a test built for a single molecule. FDA used a two-part framework from a July 2023 letter by the assistant secretary of health, later backed by a 2024 Justice Department Office of Legal Counsel opinion that called the five-part test impermissibly narrow.

Under questioning by lawyers for Idaho, Indiana, and Nebraska, Chiapperino said cannabis would not have passed the old five-part test, and that the two-part framework reached his team about two months before the analysis was finished. Chief Administrative Law Judge Derek C. Julius had said the two-part test was not the hearing’s subject, then overruled a DEA objection and let that admission onto the record. David Evans, counsel for the National Drug and Alcohol Screening Association, ran more than an hour past his cross-examination time trying to pull the method apart.

Dr. Corey Burchman, a pain physician from New Hampshire, followed with a clinical pitch: cannabis as a way to cut opioid prescriptions. He called it extremely helpful for chronic pain, and said colleagues would avidly use it if it were available as a substitute.

Withdrawal from opioids is like a dumpster fire. Withdrawal from marijuana is more like a dying glowing ember of a campfire.

Dr. Corey Burchman, pain management physician, DEA hearing testimony

Only Opponents Sat at the Designated Table

The Administrator selected seven designated interested persons after a new round of notices. Every seat went to a party the agency treated as adversely affected by rescheduling. Pro-rescheduling groups, including NORML, were not seated. The hearing was not livestreamed. The public gallery held about 25 people.

WHO DEA SEATED

• National Drug and Alcohol Screening Association: Workplace-testing interests, with Evans on cross-examination.
• Tennessee Bureau of Investigation: A state crime-lab voice on the designated list.
• Smart Approaches to Marijuana: The leading national opponent group, with CEO Dr. Kevin A. Sabet in the fight.
• Nebraska, Idaho, Indiana, and Louisiana: Four states counted as one party for the proceeding.
• DUID Victim Voices: Impaired-driving advocates.
• Kenneth Finn, MD, and Phillip A. Drum, PharmD: Two clinicians seated in their own names.

Sabet called the opening “surreal” and said DEA was “arguing the opposite of what it’s been arguing for the last 50 years.” When testimony ended, SAM urged Julius to put public health first and recommend against the transfer. Sabet said a DEA official had admitted marijuana failed the test for currently accepted medical use, and that witnesses had described high abuse potential, psychosis, and schizophrenia. The government’s own FDA witness had already put three medical uses and the eight-drug safety comparison on the same record.

That seating choice did not produce a government retreat. It produced a record in which the United States argued for Schedule III against a table of critics, after it had already moved medical marijuana. The opponents’ best hours were spent on the five-part test, impaired driving, and youth harm, not on a showing that cannabis kills like the eight comparators Chiapperino named.

What 280E Still Costs Adult-Use Operators

Section 280E of the tax code blocks deductions and credits for trafficking in a Schedule I or II controlled substance. Schedule III is not in that sentence. Move an activity off I and II, and 280E stops reaching it. Leave it on Schedule I, and rent, payroll, and ordinary overhead still cannot be deducted, aside from cost of goods sold.

That is why the April medical order and the summer hearing are not the same event. A medical operator with a qualifying state license now has a federal schedule that sits outside 280E for that activity. An adult-use shelf in the same store does not. A company that holds both licenses has to split shared costs, which is the apportioning problem Treasury flagged. There is no IRS default formula on the public record for that split.

Banking does not flip with the schedule number. Cannabis activity that remains federally illegal still sits inside Bank Secrecy Act and anti-money-laundering rules. Schedule III can change how a credit union’s counsel writes a risk memo. It does not, by itself, force a national bank to open the account. Adult-use operators who planned as if a June hearing were a tax bill have the same 280E year they had in May, unless a later final rule moves the rest of the plant.

SAM and the attorneys general of Nebraska, Louisiana, and Indiana have a petition in the U.S. Court of Appeals for the D.C. Circuit against the April order. If that challenge lands, even the medical track is not a closed book. Operators who treat April 28 as permanent without watching that docket are guessing.

A 1972 Finding the White House Set Aside

In 1970 Congress put marijuana on Schedule I on a temporary basis and created a national commission to study it. Raymond P. Shafer, the former Pennsylvania governor, chaired it. On March 22, 1972, the commission delivered Marihuana: A Signal of Misunderstanding. It did not call the drug harmless. It said users were not a danger to public safety in the way the law implied, compared the problem with alcohol, and recommended that possession for personal use, and casual non-profit sharing, no longer be crimes.

President Richard Nixon declined to follow it. Marijuana stayed in Schedule I, the box for substances with no currently accepted medical use and a high potential for abuse. The 2024 HHS medical-use finding, the 2024 Office of Legal Counsel opinion, Chiapperino’s three conditions, and the eight-drug overdose comparison are a more formal version of a safety argument the government has heard before. The difference in 2026 is that part of the market has already been moved, and the leftover question is written as a scheduling rule rather than a decriminalization bill.

Julius Holds the Record With No Public Deadline

The hearing ran at the DEA Hearing Facility at 700 Army Navy Drive in Arlington, Virginia, from June 29, 2026, at 9 a.m. ET, and it was required to conclude no later than July 15, 2026. Julius sat for 11 days of testimony. Parties then filed post-hearing briefs in August 2026. The government asked him to recommend transferring remaining marijuana from Schedule I to Schedule III.

THE PATH AFTER TESTIMONY

1. December 18, 2025: President Trump issues a December 18, 2025 executive order directing the Attorney General to complete marijuana’s move to Schedule III as fast as federal law allows.
2. April 23, 2026: Justice Department announces the medical and FDA-product Schedule III order, withdraws the old hearing, and sets a new one.
3. April 28, 2026: The medical order takes effect, and the new notice of hearing is published.
4. June 29 to July 15, 2026: Julius hears 11 days of evidence on the remaining marijuana.
5. August 2026: Post-hearing briefs go in. The recommended decision is still unposted through September 24, 2026.

DEA rules tell the judge to act as soon as practicable. They do not publish a clock. Parties get a window to file exceptions after a recommendation appears. The DEA Administrator, not the judge, issues or withholds a final rule. Court challenges are expected on that rule too. A closed hearing is a stack of transcripts, not a new schedule.

State Officials Are Still Waiting on Guidance

The argument that followed the hearing has not been a rerun of the alcohol comparison. It has been about whether the April order works on the ground. California’s cannabis regulator said the state had received no formal updates from DEA headquarters on implementation guidance, even as the agency sought medical-market data. Gillian Schauer of the Cannabis Regulators Association said DEA has not meaningfully engaged state officials, though any broader rule would depend on state systems.

A Government Accountability Office review issued in September 2026 found gaps in how DEA and FDA document drug-scheduling procedures. One finding, quoted from the report in public discussion of the review, was that DEA does not have policies or procedures for how staff are to evaluate or schedule substances. That is a process critique. It is not a new scientific finding that overrules Chiapperino’s eight-drug table, and it is not a substitute for Julius’s recommendation.

WHAT WE KNOW

• Medical track: FDA-approved marijuana drugs and state-licensed medical marijuana are Schedule III as of April 28, 2026, unless a court knocks the order down.
• Hearing record: Testimony ended by July 15, 2026; briefs were in by August; the government asked for Schedule III on the rest.
• Adult-use track: Remaining marijuana is still Schedule I, so 280E still reaches that activity.

WHAT IS UNCONFIRMED

• Julius’s recommendation: No public recommended decision as of September 24, 2026, and no posted date for one.
• Final rule: The Administrator has not issued a rule moving adult-use marijuana, and no effective date exists to plan around.
• April order in court: The D.C. Circuit petitions are pending; the medical Schedule III line can still be contested.

The science the government put on the first two days is now part of an official record: fewer overdose deaths than eight comparators, withdrawal closer to tobacco than to alcohol, and accepted medical use for three conditions. Adult-use cannabis is still in the same box it occupied when the May 2024 proposal was filed. Medical operators already live under a different schedule, a different tax rule, and a registration portal DEA stood up for dispensaries. Until Julius writes, and until the Administrator signs, that is the federal market.

Disclaimer: This article is news reporting on federal scheduling, tax, and hearing developments, and it is for information only. It is not legal advice, tax advice, medical advice, or a recommendation to change a filing position, a license structure, or a treatment plan. Readers who operate in cannabis, hold inventory, or use cannabis as medicine should consult a qualified attorney, a CPA familiar with controlled-substance taxation, and a licensed clinician before acting on any schedule or 280E assumption. Figures, docket statuses, and agency positions reflect the Justice Department, DEA, Treasury, and hearing record described above and can change when the administrative law judge, the DEA Administrator, the courts, or the IRS issue later documents.