In 2024, the Drug Enforcement Administration and the Justice Department took the furthest step yet toward moving cannabis out of Schedule I. The proposed rule landed in the Federal Register on May 21, 2024, the comment window closed on July 22, 2024, and the DEA's administrative hearing opened on December 2, 2024. No final rule came out of it. Cannabis is still Schedule I, and every state-licensed shop still operates under the same federal classification it had in 2023.
cannabis rescheduling status us
What the 2024 update actually amounts to
Rescheduling is a rulemaking, not a law. It runs through the Controlled Substances Act, which puts the DEA in charge of the final call after a recommendation from the Department of Health and Human Services. HHS sent its recommendation in August 2023, and the unredacted letter became public in January 2024. It said cannabis has accepted medical use in the United States and recommended Schedule III.
Schedule III is a real change in category: moderate to low physical dependence, accepted medical use, and a different set of rules for research, prescribing, and taxes. It is not legalization. Adult-use sales would remain federally illegal under the CSA even after a final rule, because Schedule III drugs are still controlled substances.
cannabis rescheduling dea hearing
Timeline of the rescheduling process
- August 2023: HHS recommends Schedule III in a letter to the DEA.
- January 2024: The unredacted HHS letter is released after a public records request.
- Spring 2024: The DEA sends the proposed rule to the Office of Management and Budget for review.
- May 21, 2024: DOJ and the DEA publish the notice of proposed rulemaking. The public gets 60 days to comment.
- July 22, 2024: Comments close with tens of thousands filed, including from state attorneys general, medical groups, and cannabis businesses.
- December 2, 2024: The DEA hearing begins before Administrative Law Judge John J. Mulrooney II.
- January 13, 2025: Judge Mulrooney issues a recommended ruling that the current record is incomplete and that the DEA Administrator should not lean on it as written.
Why convenience is where this gets decided
Talk to anyone who runs a dispensary and the conversation about rescheduling turns practical fast. Section 280E blocks businesses that traffic in Schedule I or II substances from deducting ordinary expenses, which is why a shop can pay rent, payroll, and security costs and still owe federal tax on gross profit. Moving to Schedule III removes that trap. Money that stays in the business tends to go toward the things customers notice: more delivery zones, curbside pickup, drive-thru windows, better online ordering, shorter waits.
Payments matter just as much. Card networks have kept cannabis merchants in a gray zone, so customers see cash-only counters, PIN debit workarounds, and cashless ATMs that feel like a step backward. Rescheduling does not force Visa or Mastercard to change their policies, but it does remove the federal scheduling excuse that banks and processors hide behind. Expect pressure to build on that front.
What rescheduling would not change
- No federal legal market for adult use. Schedule III drugs are not sold at retail.
- No automatic protection for state programs from federal enforcement. The DEA said in the proposal that it would still pursue diversion.
- No change to state licensing, local zoning, or the patchwork of rules that makes convenience vary so much by city.
- No free pass on testing, labeling, or FDA oversight. A Schedule III drug falls under FDA authority, and medical claims would get stricter, not looser.
Who showed up at the hearing
The December hearing drew state officials, medical cannabis patients, physicians, anti-drug groups, and a handful of attorneys general who opposed the change. The arguments split along familiar lines: whether the evidence supports medical use, how abuse potential compares to other Schedule III drugs like ketamine and anabolic steroids, and whether the DEA built a record strong enough to survive a court challenge. Judge Mulrooney's January ruling focused on that last point, calling the record incomplete and asking for more evidence. That is a procedural turn, not a rejection of Schedule III, but it slows the clock.
What to watch next
- A final rule from the DEA Administrator, which has no deadline.
- Litigation. Either side can sue over a final rule, and the process questions raised in January give opponents a foothold.
- Congress. Bills to deschedule cannabis, or to shield state programs, have stalled before. Banking legislation failed again in 2024.
- Tax planning. Operators and their accountants are already modeling what 280E relief would do to cash flow.
The bottom line for shoppers and shops
Nothing about your Tuesday pickup order changed in 2024. The classification did not move, prices did not move because of it, and state rules still decide where you can buy, how late, and whether someone brings it to your door. What did change is the direction of travel: a formal proposal, a public record, a hearing, and a recommended ruling, all on the path to Schedule III. Whether convenience keeps winning in cannabis will depend a lot on what happens to that rule, because payment rails, tax treatment, and delivery economics all sit downstream of one scheduling decision.