The State of Cannabis Rescheduling: Where Does It Stand? 

AAFCPAs would like to make cannabis clients aware that the public commentary period on cannabis rescheduling has ended, marking a key turning point in the ongoing debate over cannabis regulation. On July 22, the commentary period officially closed, with more than 43,000 comments submitted. The overwhelming majority of comments favored complete cannabis descheduling rather than rescheduling to Schedule III. 

While cannabis rescheduling to Schedule III would provide significant tax relief, especially in terms of the 280E provision, it would not resolve many of the legal conflicts between federal and state cannabis laws. A report from the Congressional Research Service emphasized that cannabis sales without a valid prescription would still be subject to federal criminal law, and recreational sales would remain illegal at the federal level. This underscores the limitations of rescheduling as opposed to full descheduling, which many stakeholders view as a more comprehensive solution. 

What Happens Now?

Now that the public commentary period has ended, the Drug Enforcement Administration (DEA) is tasked with reviewing and responding to the feedback. This process is crucial, as the DEA must consider all relevant materials presented during the comment period, including scientific data, expert opinions, and facts accumulated throughout the pre-rule and proposed rule stages. The DEA is required to address significant issues raised in the commentary and explain the rationale behind its final decisions. The final rule will only take effect once the DEA signs off and any necessary administrative hearings are conducted. 

How We Help

AAFCPAs’ Cannabis practice advises that clients stay vigilant and proactive when navigating the shifting regulatory landscape. While rescheduling may resolve some significant issues like 280E, it will not address all challenges facing the industry. AAFCPAs can provide counsel to operators on potential tax implications and can assist clients that are preparing for the changes rescheduling might bring. AAFCPAs continues to be a trusted advisor to cannabis operations nationwide, bringing the understanding they need in the industry and the broad resources to advise on tax planning, compliance, and strategic financial management. We will continue to monitor the landscape to keep you informed of future related rulings and legislation. 

If you have questions, please contact David McManus, CPA, CGMA, Tax Partner & Cannabis Practice Leader at 774.512.4014 or dmcmanus@nullaafcpa.com, Joshua England, LLM, Esq., Partner & Tax Attorney at 774.512.4109 or jengland@nullaafcpa.com—or your AAFCPAs Partner.