By Josh Kasoff

Unlike the first five years of this decade, the second half of the 2020’s may prove to be a red-letter period for the American cannabis industry. While the first half of the decade did have several surprising states across America recreationally legalizing cannabis such as Arizona and Virginia, just about no cannabis reforms were implemented on the federal level.

Apart from sporadic pardons and clemencies issued by President Trump at the end of his first term and President Biden for cannabis-related charges on the federal level, no significant pieces of legislation that would result in major ripple effects for all cannabis businesses across the industry were passed or signed into law.

Regardless of what state market a cannabis business was operating in, they would still have to pay all Tax Code 280E-related taxes and would have all the same issues when it comes to proper banking and financial services. All the costly and cumbersome financial and legal issues associated with cannabis still being considered a Schedule I substance still apply despite the American cannabis industry being nearly a $30 billion industry as of 2026 that employs over 412,000 people.

Although, an order directed from originally the Biden administration towards the Department of Health and Human Services and the Department of Justice to potentially review and reschedule cannabis’ status as Schedule I could have far-reaching impacts for cannabis operators that extend far beyond just Capitol Hill and maybe the Maryland industry.

Following a recommendation in August 2023 from HHS to the DEA that cannabis be moved from Schedule I to III and many more years of tireless advocacy and lobbying, Trump signed an executive order in December 2025 to instruct the Attorney General to expedite the entire rescheduling process. In April 2026, Acting U.S. Attorney General Todd Blanche then issued that order, declaring that “state-licensed medical marijuana and FDA-approved cannabis products” would be immediately moved from Schedule I to III.

While this may seem like just one of many orders and legal changes that an Attorney General makes, such a sweeping change comes with all kinds of questions, challenges and uncertainties from cannabis industry professionals and experts.

“Typically, federal drug scheduling is governed by federal statute, but the United States is

also party to international treaties that give the federal government authority to modify

the scheduling of controlled substances.” explained Riana Durrett, Executive Director of UNLV’s Cannabis Policy Institute.

“The Attorney General has now moved medical marijuana to Schedule III, subject to compliance with state medical marijuana programs and other conditions set forth in the Final Order, or FDA approval. The constitutional questions surrounding that delegation of authority are a separate issue, but the practical question now is how the DEA will implement the new framework.”

One of the largest and most encompassing questions generated by this significant reform is what the DEA registration process will entail for medical cannabis producers and whether it would be more strict than state licensing and registration processes.

“The federal requirements for Schedule III registration are broadly set forth in the Attorney General’s Final Order, 91 Fed. Reg. 22,714, but many of the implementation details will ultimately be determined by the DEA.” Durrett explained. “The Order generally contemplates registration, seed-to-sale tracking, and physician recommendations, among other requirements. The important question is how the DEA will interpret and apply those requirements in practice.”

What’s worth noting though is that the DEA has begun doing their due diligence by inspecting and corresponding with facilities in states with medical-only cannabis markets.

“Until the DEA begins processing registrations here, however, we will not know exactly what the registration process will look like in Nevada. I think it’s a fairly safe prediction that the rules will not be more restrictive than the state regulations. Nevada is different because it has both medical and adult-use cannabis establishments.

Informal reports from those inspections indicate that DEA agents have been collaborative and interested in learning how state-regulated cannabis businesses operate. But those inspections have not yet occurred in Nevada, so we will have to see how the DEA approaches Nevada’s more complex regulatory structure.”

Durrett said that one of the most relevant questions that Nevada cannabis business owners have regarding DEA regulation is how they’ll view Nevada’s dual-license structure, where the same facility or dispensary can hold both a medical and recreational license simultaneously.

“There will likely be a number of hurdles and learning curves when the DEA begins processing registrations for Nevada licensees. Nevada already has extensive state requirements governing transportation, storage, security, seed-to-sale tracking, and other aspects of cannabis operations, and the DEA will need to understand how those systems interact with federal requirements.”

Another very valid concern that arises from such a tremendous change would be whether DEA-registered production facilities would be allowed to work with non-DEA but still state-licensed facilities and dispensaries.

“That could create a division within the market, with federally registered businesses operating under a different set of constraints than businesses that remain solely under state regulation. That could be particularly challenging for Nevada’s already struggling cannabis market.”

Although luckily, Durrett does hold optimism for Nevada production facilities whenever the DEA does begin inspecting and correspondence.

“I think the DEA will be pleasantly surprised by how secure, transparent, and well-run Nevada’s cannabis facilities are. There will undoubtedly be questions and some kinks to work out, but I expect the state and federal regulators will learn from each other as the process develops.”

While the DEA registration process may become arduous, Durrett admits that there are several potential benefits to becoming registered under Schedule III, such as substantial tax-related relief from the dreaded Tax Code 280E.

“The cannabis industry is already heavily regulated, so adding another layer of federal oversight could create additional costs and administrative burdens. But if the DEA gives state-regulated programs as much deference as appears to be contemplated by the Attorney General’s Order, the additional federal requirements may be manageable—particularly if they are offset by meaningful relief from 280E.”

For states like Nevada with such heavy gaming and tourism industries, a rescheduling and DEA registration may allow for better opportunities to appeal to tourists who are staying in hotels that prohibit cannabis deliveries and consumption.

“Nevada currently prohibits cannabis establishments from being located within 1,500 feet of gaming properties and prohibits cannabis deliveries to the Strip Corridor. If medical marijuana can operate lawfully under the federal framework when it complies with the Attorney General’s Order and state law, at least part of the federal-status rationale for maintaining those separations may change.

That could create an opportunity to reconsider the relationship between cannabis and Nevada’s tourism and gaming industries.”

As mentioned above, the benefits of relief from the decades-old Tax Code 280E for Nevada cannabis businesses by registering under Schedule III can’t be understated.

“Relief from 280E could be one of the most significant financial benefits of rescheduling for cannabis businesses. Cannabis businesses currently face a tax disadvantage because 280E prevents businesses trafficking in Schedule I or II controlled substances from deducting many ordinary business expenses.

Moving medical marijuana to Schedule III could potentially change that tax treatment for qualifying businesses. For Nevada businesses, the impact could be substantial. Whether those savings are used to expand operations, hire employees, invest in facilities, reduce debt, or simply improve profitability will depend on the individual business.

But for an industry operating on relatively thin margins, the ability to deduct ordinary business expenses could make a meaningful difference.”

However, another series of questions that have arisen from the partial rescheduling are surrounding the subject of interstate commerce.

“Each state has banned interstate commerce, which some attorneys have argued violates the dormant commerce clause, but the legal industry has not tested the interstate commerce waters. Now that medical marijuana (in compliance with state medical marijuana laws) is legal, some states or particular markets may be even more interested in commerce across state lines. Nevada is not necessarily going to benefit from interstate commerce, but it could eventually become a legal reality and operators should consider how that impacts their business.”

As Executive Director of UNLV’s Cannabis Policy Institute, Durrett believes that the rescheduling will reduce some of the barriers that universities still face when it comes to cannabis-related research and possibly lead to future educational opportunities at prestigious universities across the country.

“I think the federal government should be more focused on supporting the research. It doesn’t make sense to focus on increasing access to medical marijuana without supporting more research around guidance that should be provided to patients, consumers and public health officials.

I do think cannabis education will continue to grow and become a fixture at universities across the country. At UNLV, I look forward to continuing to expand cannabis courses, policy discussions, and research as the legal and regulatory landscape develops.”