Expert Q&A: Federal cannabis rescheduling 101

As the U.S. Drug Enforcement Administration (DEA) gears up for this month’s administrative hearing on the fate of federal marijuana legalization, we sat down with UNLV Cannabis Policy Institute (CPI) director Riana Durrett for the rundown on decades of debate surrounding the plant — and what giving the green light could mean for businesses, tourists, and residents in Las Vegas, the Silver State, and beyond.

On April 23, the U.S. Department of Justice reclassified medical cannabis from Schedule I to III, a tier of less dangerous drugs — loosening research restrictions and opening a pathway for stated-licensed medical marijuana businesses to operate legally under federal law.

Acting attorney general Todd Blanche’s order essentially created a two-tier system, leaving recreational cannabis on Schedule I (alongside drugs such as heroin and psilocybin) pending a June 29 hearing. It also raised questions about next steps. Industry observers await clarification on federal infrastructure surrounding DEA registration of medical cannabis businesses; how the order affects banking and taxation; state laws prohibiting cannabis sales near gaming properties or transport across state lines; and more.

“Until now, federal prohibition meant that individual states were making their own decisions about what is legal,” Durrett said. “This spring’s DOJ order was the federal government’s first step toward medical marijuana legalization.”

Read on for more on how past, current, and future perspectives on cannabis are converging.

What’s the latest with cannabis legislation updates?

This spring, two major federal moves entered the equation that could potentially impact the cannabis landscape in Nevada. 

Acting attorney general Todd Blanche’s 33-page Department of Justice order came just days after Nevada Congresswoman Dina Titus (D-NV), in collaboration with Rep. Ilhan Omar (D-MD), re-introduced the Higher Education Marijuana Act — which is brilliant timing because the federal order focuses on reclassifying medical marijuana and easing restrictions on research, while Congresswoman Titus’s bill focuses on putting efforts to research cannabis into action.

Support for marijuana research is a uniquely unifying issue. Both political parties agree, past and current presidents agree, and the science community agrees that we should be conducting research in this area. Even people opposed to marijuana legalization agree that we need more research.

Who are the various groups that stand to be impacted by the DOJ order?

The big takeaway of the rescheduling is that state-licensed medical marijuana operations will, for the first time, be able to operate legally in a manner that complies with federal law if they register with the DEA and follow certain rules. This is huge for businesses because it means they’ll qualify for relief from a tax penalty called 280E, which prohibits businesses that handle Schedule I or II controlled substances from deducting a variety of business expenses.

It’s also big for the medical cannabis community that’s for years pointed to various studies and evidence showing cannabis has numerous compounds that have health benefits and shouldn’t be placed within Schedule I alongside heroin and other substances that are considered highly addictive and without medical benefits.   

As far as research, going from Schedule I to Schedule III is helpful especially for those who have already gone through extensive protocols to actively work in this space. It relaxes restrictions and allows greater access for them. Under the new DOJ order, researchers will be able to obtain cannabis plants and products from the state-licensed market, such as at a local dispensary. That's a vast change from the long-established practice of getting specimens from about a handful of suppliers — which researchers say sometimes presents a barrier to obtaining product that’s similar to what people are actually consuming.

It is important to note, however, at this stage, attorneys, advocates, and scholars disagree about the full impacts of rescheduling and how far they expect the federal government to continue to go in their rescheduling efforts.

Are further steps needed to make the executive order official?

There are two primary documents. There’s President Trump’s executive order from December 2025 asking the DOJ to reschedule. Then in April, DOJ acting attorney general Todd Blanche issued the order to effectuate that. No other congressional actions or executive orders are needed — medical marijuana is now officially reclassified as Schedule III. 

Now, those interested are eagerly awaiting a June 29 administrative hearing scheduled to further address rescheduling mandated in the April DOJ order. Even if nothing consequential happens in the June hearing, much more clarification and guidance is needed to implement that infrastructure and formal mechanisms to effectuate the already ordered rescheduling. For example, medical cannabis operations can register with the DEA, as required under the order, but it’s unknown whether combined medical and recreational licenses will qualify for any protections afforded by this registration. 

Why now?

Others have posed this question to me and I can’t help but ask, “Why didn’t we do this 10, 40, or even 50 years ago?” Our policies in the United States relating to cannabis have been at odds with science and especially counter to our approach to alcohol legalization. 

President Trump said during his 2016 campaign that he supported medical marijuana. It’s just been truly difficult to get anything legalized because of how deeply the U.S. embedded itself in this legal hole that views cannabis as addictive as heroin and devoid of medical value. Additionally, the U.S. is a signatory to an international treaty called the United Nations Single Convention on Narcotic Drugs that requires us to have cannabis on a schedule. It’s taken a lot of legal work to find a way to remain in compliance leading up to today. And it’s taken a lot of pushing, a lot of political motivation, a lot of getting federal agencies on board, and a big shift in American attitudes toward cannabis. 

Now another facet to this: it’s really surprising and weird that now this plant is being treated differently for medical uses versus adult use. The schedules under the Controlled Substances Act don’t typically treat drugs that way. For example, we don’t have ketamine for medical use and ketamine for adult use. And usually what’s scheduled is compounds — not an entire plant. Cannabis contains many compounds that aren’t intoxicating. So, it’s both scientifically and legally very complicated, and that’s another reason it will continue to take years to figure out how to legalize and regulate within our current federal structures.

How might these federal changes impact Nevada?

A caveat for many states, including Nevada, is that we no longer have a distinct separation between the medical and recreational adult-use markets. Nevada moved to dual licenses so that businesses can simultaneously operate in both spaces.

When Nevada legalized cannabis in 2016, it was projected to become a $40 million industry. We’ve far surpassed that. We reached $1 billion in 2020 and now it’s down to about $750 million.

What’s driving the decline? 

A recent CPI report pointed out a dichotomy: When voters legalized, it was all over the campaign materials and news media that we have 42 million visitors a year and cannabis sales will bring in a lot of money for schools. But the state has gone to great lengths to keep cannabis away from gaming — and ultimately away from a lot of the tourists. Our report calls this the “1,500 foot wall,” which refers to a Nevada law mandating a separation of at least 1,500 feet between gaming establishments and cannabis establishments in large counties. 

It is possible for tourists to buy cannabis — they can go off gaming properties — but it’s not very convenient or accessible. So, we’re not serving that tourist market as well as we could and potentially there’s revenue that’s being left on the table. One economist, Robin Goldstein, has opined that these barriers to tourist access of cannabis prevents Nevada from realizing tax benefits on those sales, with no corresponding protection of public health or safety.

Moving medical marijuana to Schedule III doesn’t immediately change the way cannabis and gaming operations interact. But the DOJ order essentially legalizes medical cannabis — meaning that if a business is in compliance with Schedule III and the eventual apparatus surrounding this DOJ order, then they’re no longer a federally illegal business. So, I think it will be even more difficult for the state of Nevada to bar gaming licensees from co-locating these businesses, especially when the bar has always been based on the legal status of cannabis.

Does the DOJ order more closely align the U.S. with other countries' views of cannabis?

For the first time in U.S. history, this DOJ order is going to allow us to import and export cannabis from overseas. Previously, we were completely cut off from the rest of the world, some of which is far ahead of us on legalization. 

This will be a very interesting change because there are still many other countries signed onto this United Nations treaty and they’ve treated cannabis with the same restrictions as the U.S. 

But now the U.S. appears to be moving in the direction of other countries that have legalized. One really well-known example is Canada, which has had a federal regulatory structure for about 10 years. Uruguay, Morocco, and a lot of European countries have also legalized medical marijuana. So, it’s slowly gaining acceptance around the world.

If you had a crystal ball, what would be your predictions for the future cannabis landscape?

The U.S. has debated regulating marijuana similarly to alcohol since 2012 when Colorado legalized. So I maybe see a world where the federal government decides to stay out of restricting non-medical uses of cannabis. 

I also wonder whether this change to Schedule III will eventually lead to interstate commerce. When states legalized, in order to comply with federal guidance they limited cannabis sales, growing, transport, production, everything to within their state borders. The states are now the ones that maintain that law, and it appears that the federal government is no longer concerning itself with whether cannabis is crossing state lines.

Nevada’s — and the entire country’s — medical market might get a lot bigger because of this change. We likely will see states doing things to expand access in their medical market that still complies with this federal change.