When is marijuana officially rescheduled? Schedule 3 timeline is unclear – and has risks

One day after President Donald Trump’s long-anticipated executive order directing federal authorities to reclassify cannabis as a less dangerous drug, the $32 billion legal U.S. cannabis industry is posing a central question: When?

Trump’s order instructs Attorney General Pam Bondi to reschedule marijuana “in the most expeditious manner in accordance” with federal law. But on the quickest realistic timeline, it could still be months before the promised benefits for research and tax relief appear, legal experts told MJBizDaily.

“I wish I could give you something like an exact number, but there’s just way too much discretion here,” said Matthew Cavedon, the director of the Project on Criminal Justice at the Cato Institute, a Washington, D.C.-based libertarian think tank.

“I can’t say exactly how long that will take because there is no deadline,” added Shane Pennington, a prominent administrative law expert and partner at Blank Rome.

Still, there is some idea at least of the bureaucratic and legal processes to be followed. And at least some credit is owed to former President Joe Biden, who launched the initial cannabis reform process that Trump moved along Thursday.

However, if any steps are skipped or corners cut, there are significant risks that could delay rescheduling entirely, legal experts warn.

“The issue is, they’re going to have a bureaucratic gauntlet to run,” Pennington said.

Pennington represented interested parties in the planned hearings before a U.S. Drug Enforcement Administration law judge that were paused on the eve of Trump’s inauguration – in part due to allegations that the DEA was tilting proceedings towards keeping cannabis Schedule 1.

Those hearings were the latest step in an administrative rescheduling process begun under Biden in October 2022.

In his executive order Thursday, Trump acknowledged the Biden effort and built on it by recognizing the August 2023 Health and Human Services finding that cannabis has a currently accepted medical use in the U.S.

However, Trump also went further. He directed the Justice Department to issue a final rule rescheduling cannabis, rather than restart or resume the process.

In theory, cannabis could be Schedule 3 – and plant-touching cannabis companies could see relief from Internal Revenue Service Code 280E – in as little as “five days – not business days,” Pennington said.

Bondi could cancel the hearings – rendering the interlocutory appeal of the hearings moot – and publish a final rule in the Federal Register reclassifying cannabis a Schedule 3 drug that quickly.

But once Bondi does that, there’s another hurdle to clear: the courts.

Supporters have long expected lawsuits challenging the final rule.

Smart Approaches to Marijuana, a prominent legalization foe that challenged the Biden administration process, has already retained former Attorney General Bill Barr to file such a suit, Kevin Sabet, the organization’s president and CEO, said in a video posted to X on Thursday.

“As we speak, we are preparing to file suit against the administration to block this rule, if it should ever become final,” Sabet said. And Barr, who led the Justice Department in Trump’s first term, “has assured me we have an excellent case,” he added.

The exact contours of SAM’s argument isn’t publicly known, but observers predict it is likely to challenge rescheduling on procedural grounds and allege that federal administrative law wasn’t obeyed.

That’s the process that dragged on all of last year, after the DEA fielded 43,000 comments from the public on the question, some of which – including SAM – requested the still-paused hearings.

If Bondi goes too far. too quickly, all it might take is one unfriendly judge in an obscure district to slap a stay on rescheduling – and delay 280E relief and everything else indefinitely, Cavedon said.

And there’s a worst-case scenario.

If a federal judge decides the process was bungled and marijuana rescheduling ends up mired in the lawsuits that legalization opponents have vowed to bring, it could be another two or three years before Schedule 3 is a reality, Cavedon added.

That’s why as fast as the industry may want rescheduling to happen, it may be preferable if it’s done carefully – and correctly.

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“You do want this to move fast and, frankly, after this many decades, it should,” Cavedon said.

“This shouldn’t be a hard thing, but you do not want to have DOJ make a hasty call and have this held up in court because some judge decided you didn’t do your homework.”

Chris Roberts can be reached at chris.roberts@mjbizdaily.com.