On April 23, the U.S. Department of Justice announced a long-awaited change to federal marijuana policy that could have major impacts for federally funded health centers seeking to prescribe medical marijuana and for research institutions aiming to bolster their scientific research capability.

The shift would reschedule certain marijuana products from the highly restrictive Schedule I classification to the more flexible Schedule III classification under the Controlled Substances Act (CSA). The reclassification would apply to marijuana extracts and marijuana-derived compounds, like delta-9 THC, that are “included in an FDA-approved drug product or are subject to a state-issued license to manufacture, distribute, and/or dispense marijuana or products containing marijuana for medical purposes.”

Additional steps must occur before the reclassification takes effect, as the DOJ’s order, dated April 22, does not reschedule marijuana to a Schedule III drug—it only initiates the rescheduling process. The Drug Enforcement Agency (DEA) will hold an expedited June 29, 2026, hearing and likely will issue a proposed rule effectuating the order before the hearing.  Interested parties have 30 days to file their intention to participate in the hearing.

Existing Restrictions Have Hampered Grantees’ Prescribing and Research Efforts

Marijuana moving toward reclassification under Schedule III means researchers and clinicians will face reduced barriers to accessing marijuana for medical research, clinical trials, or patient prescriptions.

As federally-funded entities, health centers and research institutions must comply with federal law regarding controlled substances.  Because marijuana has been classified as a Schedule I drug, the CSA has prohibited its possession, manufacturing, and distribution—even for medical purposes. This means that health centers, as Section 330 grantees, have been bound by such prohibitions, even in instances where the possession, manufacturing, and/or distribution of marijuana have been legalized under state law and non-federally funded providers within the same street block have been able to prescribe to patients.

Under the CSA, Schedule I drugs—where marijuana is currently classified—are defined as drugs that have the potential for abuse and offer no medical benefits.  This includes substances such as heroin and LSD.  The Schedule I designation, therefore, has created considerable regulatory obstacles and severely curtailed research opportunities. In contrast, Schedule III drugs are defined as having a moderate to low potential for physical and psychological dependence with less potential for abuse.

Planning and Preparations for Federal Grantees

It is important for federally-funded entities to recognize that the April 23 order only initiates the rescheduling process—with the June 29 hearing serving as the next identifiable milestone in the process. The hearing is expected to last several weeks, and although the DOJ has emphasized an expedited timeline, it could take several additional months until the rescheduling process is complete.

But any eventual move to a Schedule III classification would not “legalize” marijuana. Marijuana will remain a controlled substance—albeit one with an “accepted medical use.” While Schedule III substances may have an accepted medical use, all prescription drugs containing Schedule III substances (i.e., marijuana or marijuana products) require FDA approval. To date, the FDA has not approved prescriptions containing marijuana or marijuana products. Thus, only those marijuana products that are FDA-approved will be covered by a reclassification.

To that end, the DOJ’s order noted that “any form of marijuana other than in an FDA-approved drug product or marijuana subject to a state medical marijuana license remains a schedule I controlled substance, and those who handle such material remain subject to the regulatory controls, and administrative, civil, and criminal sanctions.”

Health centers, research institutions, and other recipients of federal funding should continue monitoring developments, such as changes in this area that have the potential to expand medical research into clinical uses for marijuana, impact insurance coverage, or alter pharmacy availability. Further, federal grantees should review internal policies and procedures relating to prescribing practices in anticipation of the forthcoming change.

The Feldesman team will monitor developments in federal marijuana policy. If you have questions about how this may impact your organization, please contact Mindy B. Pava, Andrea C. Harris, or Kevin R. Lutes.