E.O. Directs AG to Complete Marijuana Schedule III Rescheduling

President Donald Trump signed an Executive Order on Thursday last week directing the Attorney General to expedite completion of marijuana rescheduling begun in October 2022 to facilitate medical research.  There was uncertainty whether President Trump, now in the White House, would support rescheduling.  Candidate Trump posted in September 2024, “As President, we will continue to focus on research to unlock the medical uses of marijuana to a Schedule 3 drug, and work with Congress to pass common sense laws, including safe banking for state authorized companies, and supporting states’ rights to pass marijuana laws, like in Florida.” Donald Trump (@realDonaldTrump), Truth Social (Sept. 8, 2024 at 23:18 ET).

In August 2023, the Department of Health and Human Services (“HHS”), after conducting the required Eight Factor Analysis under the Controlled Substances Act (“CSA”), recommended that the Drug Enforcement Administration (“DEA”) reschedule marijuana from schedule I to schedule III.  HHS found that 30,000 licensed healthcare practitioners were authorized to recommend marijuana for medical use to over six million patients to treat pain, anorexia related to certain medical condition, and nausea and vomiting from chemotherapy.  The Department of Justice conducted a separate Eight Factor Analysis and concurred with HHS’ rescheduling recommendation.  Then-Attorney General Merrick Garland signed a Notice of Proposed Rulemaking (“NPRM”) in May 2024 proposing to reschedule marijuana to schedule III that elicited over 43,500 public comments.  Last January, a public hearing on whether marijuana should be rescheduled was placed on hold pending an appeal by several parties.

The Executive Order’s stated purpose is to improve and facilitate medical research with marijuana and asserts that the “[f]ederal government’s long delay in recognizing the medical use of marijuana does not serve the Americans who report health benefits from the medical use of marijuana to ease chronic pain” and other ailments.  It opines that marijuana’s classification as a schedule I substance has actually “impeded research.”  The Executive Order also seeks to facilitate non-controlled cannabidiol (“CBD”) research for medical treatment.

The Executive Order directs Attorney General Pam Bondi to “take all necessary steps to complete the rulemaking process to reschedule marijuana to Schedule III of the CSA in the most expeditious manner” consistent with the Controlled Substances Act.  But how will the Attorney General bring rescheduling to a close?  Will DEA pick-up where the rescheduling hearing left off in January or will the agency simply issue a final order?

The Executive Order also mandates the Administration to work with Congress to update the statutory definition of hemp derived-CBD products for medical use of full spectrum CBD, while preserving congressional intent to restrict the sale of products posing serious health risks.  This would include developing guidance on upper THC limits.  The Executive Order further requires the responsible federal agencies to develop research methods and models utilizing “real-world evidence” to improve access to hemp-derived CBD products and inform standards of care.

The President’s action follows passage of the Medical Marijuana and Cannabidiol Research Expansion Act (Public Law 117-215) enacted in December 2022 to facilitate research of marijuana and its derivatives, including CBD, for development of approved medications.  The law requires DEA to ensure an adequate and uninterrupted supply for research.  It mandates that DEA streamline and accelerate registration application procedures for marijuana researchers and manufacturers of marijuana for research.  And it mandates HHS to assess, and with the National Institutes of Health report, on marijuana’s potential therapeutic and health effects.

The Executive Order directs finalizing rulemaking to reschedule marijuana from the most stringently regulated class of controlled substances, which includes heroin and LSD, to schedule III, the class with Tylenol with codeine, testosterone, buprenorphine, butalbital, and pentobarbital.  Reclassification to schedule III would acknowledge that marijuana, as with other drugs in that schedule, has a currently accepted medical use in the U.S., a potential for abuse less than drugs in schedule I and II, and a potential for abuse that may lead to moderate or low physical dependence or high psychological dependence.  21 U.S.C. § 812 (b)(3).  Rescheduling marijuana to schedule III would bring federal regulatory requirements into closer alignment with the forty states that authorize it for medical purposes.  It would not authorize marijuana for adult recreational use.

The May 2024 NPRM confirmed that if marijuana were rescheduled to schedule III, “regulatory controls applicable to schedule III controlled substances would apply, as appropriate, along with existing marijuana-specific requirements and any additional controls that might be implemented, including those that might be implemented to meet U.S. treaty obligations.”  Schedules of Controlled Substances: Rescheduling of Marijuana, 89 Fed. Reg. 44,597, 44,621 (May 21, 2024).

Rescheduling to schedule III would subject marijuana cultivators, producers, processors, distributors, importers, exporters, dispensers, and practitioners to specific regulatory requirements under the CSA and DEA regulations.  Requirements would vary depending on the registered business activity.

Rescheduling to the less restrictive schedule unless exemptions are established would still require marijuana businesses to obtain DEA registrations, take initial and biennial inventories of marijuana on-hand, maintain transaction records, file theft and significant loss reports, and label and secure products.  Dispensing marijuana to patients, as required for other schedule III substances, would require a prescription issued for legitimate medical purpose by a DEA-registered and state-licensed practitioner.  21 U.S.C. § 829(b).  Pharmacists have to exercise their corresponding responsibility to ensure that marijuana they dispense is prescribed for legitimate medical purpose.  21 C.F.R. § 1306.04(a).  Marijuana activities would be subject to CSA criminal prohibitions under 21 U.S.C. §§ 841-844.  89 Fed. Reg. at 44,621.  Marijuana would also remain subject to applicable provisions of the Federal Food, Drug, and Cosmetic Act. Id.

As we have advised during different steps in the marijuana rescheduling process, “buckle up.”