Cannabis Rescheduling Tracker: Schedule III and 280E

Has cannabis been rescheduled, and does 280E still apply?

Only partly, and only for medical cannabis. State-licensed medical cannabis has been in Schedule III since April 28, 2026, although the order is being challenged in court. The DEA has registered only medical-only dispensaries so far, and the IRS has not said whether 280E relief depends on registration, so medical-only operators are in the clearest position and relief for dual-license operators is unresolved. Adult-use cannabis is still Schedule I, so 280E still applies to it.

Status as of November 5, 2026. We update this page when something moves. Each entry below links to the primary document or to the law-firm analysis we relied on.

Status at a glance

	Federal schedule	Section 280E	What is pending
Medical-only operators	Schedule III since April 28, 2026	Relief in effect for qualifying medical activity; IRS hasn’t said whether DEA registration is required	Court challenges to the order; IRS guidance on the 2026 transition
Dual-license operators (medical and adult-use)	Medical side Schedule III; DEA has registered none so far	Unresolved for the medical side; applies in full to adult-use	DEA decisions on dual-license applicants; IRS guidance on registration and on businesses with mixed activities
FDA-approved marijuana products	Schedule III since April 28, 2026	Not applicable	—
Adult-use cannabis	Schedule I	Still applies in full	DEA administrative law judge’s recommendation, then DEA final action
Unlicensed, bulk and non-approved extracts	Schedule I	Still applies	—

Medical cannabis: Schedule III since April 28, 2026

The Acting Attorney General signed the order on April 22, 2026, and announced it on April 23. It was published in the Federal Register and took effect on April 28, 2026 (91 FR 22714). It places marijuana in an FDA-approved product, or subject to a state medical marijuana license, in Schedule III. The order states that state licensees will no longer be subject to the 280E deduction disallowance, encourages Treasury to consider relief for past years, and makes no federal tax determination itself.

DEA registrations: medical-only so far

Medical licensees that manufacture, distribute or dispense need to register with the DEA under the new rules. The DEA’s first registrations, more than 900 dispensaries, all went to businesses in medical-only states: Alabama, Florida, Mississippi, South Dakota, Texas, Virginia and West Virginia. It has not registered any operator in a state with both medical and adult-use programs. In October 2026 it proposed denying a Minnesota dispensary’s application, citing that state’s dual-purpose license; that order is not final, and the DEA has not said what degree of separation, if any, would allow a dual-license operator to register.

The IRS has not said whether 280E relief depends on DEA registration. Until it does, registration is the strongest evidence a medical operator can have, and operators that cannot register yet should plan as if 280E may still apply.

The court challenge

Opponents of rescheduling, including a group of Republican-led states and several organizations, have challenged the order. On September 9, 2026, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit denied a motion to stay the order while the case proceeds, so it remains in effect. The challenges themselves are unresolved. If the order were overturned, medical cannabis would return to Schedule I.

Adult-use cannabis: still Schedule I

Broader rescheduling, which would move all marijuana including adult-use to Schedule III, is going through a formal DEA hearing. The evidentiary hearing ran from June 29 to July 15, 2026. In October, opponents asked to reopen it after a September Government Accountability Office report on drug-scheduling procedures. On October 22, 2026, the chief administrative law judge declined to reopen the hearing but admitted the report into the record and allowed short briefs on it, with replies due November 5, 2026.

No recommendation has been issued. After the judge recommends, the DEA must still issue a final rule before anything changes. Until then, adult-use activity remains fully subject to 280E.

The tax side: what the IRS has and hasn’t said

April 23, 2026: Treasury and the IRS announced they plan guidance on the order. They said a transition rule would treat rescheduling as first applying to the full taxable year that includes the effective date, and that guidance will explain how 280E applies to businesses with more than one activity, including how to apportion expenses.
September 29, 2026: Treasury and the IRS listed “Guidance under §280E” in their 2026–2027 Priority Guidance Plan.
As of today: that guidance has not been issued. There is no IRS ruling yet on prior-year refunds.

What this means for operators

Medical-only operators are in the clearest position to deduct ordinary business expenses on the federal return for qualifying medical activity, subject to the forthcoming IRS transition rule for 2026. Register with the DEA if you are eligible, and keep the documentation that ties your activity to your state medical license.
Dual-license operators should not assume relief yet. Adult-use activity is inside 280E, and the medical side is unresolved until the DEA and the IRS act. Keep records that separate revenue, inventory, payroll, rent and other shared costs by activity, with a documented allocation method, so you are ready either way, and plan estimated payments as if 280E still applies.
Adult-use-only operators should keep full 280E compliance, including careful cost of goods sold under IRC 471, and should not file on the assumption that broader rescheduling will be retroactive.
Everyone should revisit 2026 estimated tax payments and entity structure with the medical/adult-use split in mind. Our state tax guides cover how each state treats 280E on the state return.

Want us to look at how your books are set up for the split? Book a free 280E review.

Frequently asked questions

Does 280E still apply to my dispensary?

It depends on your licenses. Adult-use activity is still Schedule I and fully subject to 280E. A medical-only operator is in the clearest position to stop applying 280E to its medical activity, especially once registered with the DEA. If you hold both medical and adult-use licenses, relief for the medical side is unresolved: the DEA hasn't registered any dual-license operator, and the IRS hasn't said whether relief depends on registration. Keep the two separated in your books and plan as if 280E may still apply.

Do I need DEA registration to get 280E relief?

The IRS hasn't said. The statute turns on the drug's schedule, and some practitioners read that as not requiring registration, but registration would make a taxpayer's position much stronger. Until IRS guidance arrives, we treat DEA registration as an important part of documenting a medical operator's position.

Is all of 2026 covered for medical operators, or only the months after April 28?

Treasury and the IRS said on April 23, 2026 that they plan guidance treating rescheduling as applying to the full taxable year that includes the order's effective date. That guidance has not been issued yet, so we keep 2026 records dated and separated by activity, which supports either answer.

Can I amend prior years to get back taxes paid under 280E?

The order itself does not provide retroactive relief; it encourages Treasury to consider relief for past years. Whether a refund claim makes sense depends on your years, your filing positions and the statute of limitations, so we review that case by case with you and, where needed, your tax counsel.

What happens if the court overturns the medical order?

Medical cannabis would return to Schedule I and 280E would apply again from whatever date the court sets. That is why we document the medical position carefully and avoid structures that only work if the order survives.

When will adult-use cannabis move to Schedule III?

There is no date. The administrative law judge has not issued a recommendation, and after that the DEA still has to act before any change takes effect. Plan and file as if 280E applies to adult-use activity until a final rule is published.