Trump’s Plan to Reschedule Marijuana Comes with Legal Perils

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September 01 2025

President Donald Trump is considering reclassifying marijuana, a move that has renewed the cannabis industry’s longstanding hope that some type of federal reform may actually happen.

But this may not be the cure-all cannabis companies think it is.If cannabis is rescheduled to Schedule III, the Department of Justice’s Office of Legal Counsel and the Drug Enforcement Administration believe the DEA must issue additional regulations, which would impose registration and manufacturing quotas on the cannabis industry. The quotas would limit cannabis production to the amount necessary for research and medically prescribed uses.

Further, under new and existing regulations, the DEA would be required to prosecute non-medical production, distribution, and use of cannabis in the event of rescheduling to Schedule III.

OLC’S Role

As part of the Biden administration’s unsuccessful effort to reschedule cannabis, the Office of Legal Counsel was asked to provide an opinion answering three questions.

The first question regarded the definition of the phrase “currently accepted medical use” in the Controlled Substances Act.

The second concerned the degree to which findings from the Department of Health and Human Services, with respect to drugs, binds the DEA or affects subsequent rulemaking proceedings.

The third question was whether either the Single Convention on Narcotic Drugs, an international treaty, or the federal CSA requires cannabis to be placed in Schedule I or Schedule II.

Since 1972, the OLC has held that cannabis must be in Schedule I or II to comply with the Single Convention. However, the OLC opinion issued in 2022 overturned that view, concluding that cannabis could be in Schedule III and adhere to the Single Convention—but only if the DEA issues regulations placing additional restrictions on the cannabis industry.The OLC opinion described the additional restrictions:

• DEA registration and licensing requirement for medical cannabis manufacturing, distribution, export, or import

  
  

• DEA-imposed quotas on cannabis manufacturing (only for medical use, non-medical manufacture is prohibited). The quota is the annual amount consumed for medical use only.

  
  

• Prohibit the possession of unauthorized (non-medical) cannabis

  
  

• Penalties for unauthorized possession

  
  

OLC concluded that the CSA authorizes the DEA to issue new regulations to ensure compliance with the Single Convention provisions. The DEA, in turn, is preparing to issue those regulations.

The agency, in a May 2024 proposed rulemaking notice, said the “DEA will consider the marijuana-specific controls that would be necessary to meet U.S. obligations under the Single Convention and the Convention on Psychotropic Substances in the event that marijuana is rescheduled to Schedule III,” and “will seek to finalize any such regulations as soon as possible.”

The “modest gap” between Schedule III restrictions and the Single Convention is because Schedule III permits only medically prescribed cannabis, not recreational use. Compliance with the Single Convention requires permitting only medically-prescribed use of cannabis.

For example, when Germany legalized adult-use cannabis in 2024, most observers concluded it had violated the Single Convention. The US could turn its back on the Single Convention as well (there are no real penalties for doing so), but that drastic course of action has yet to be discussed in connection with rescheduling.

DEA’S Role

Because cannabis is in Schedule I, the DEA currently can look the other way at non-medical use, and the DOJ can argue it’s complying more or less with the Single Convention.

But with Schedule III, the DOJ believes new mechanisms will be necessary to maintain treaty compliance, so the DEA would be compelled to enforce the new regulations, limiting production to medical use and even criminalizing non-medical sales and possession, as we’ve seen with ketamine, for example.

The DEA may also be reluctant to provide licenses for cannabis companies that are involved in non-medical cannabis commercial activities.With marijuana as Schedule I, cannabis industry advocates can claim there should be no federal criminal prosecution because cannabis has medical uses, the Schedule I classification was President Richard Nixon’s fault and was racist, and so forth.

But with cannabis rescheduled as Schedule III after the appropriate public rulemaking procedure, those arguments vanish. The Schedule III classification criteria are satisfied only by medically-prescribed cannabis, so sellers of cannabis products suitable only for the recreational market should be concerned.Cave felis quod optas—beware, cat, of what you wish for.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.