Rescheduling Cannabis: Legal Challenges and Potential Outcomes

Originally published in NJSBA’s June 2025 issue of New Jersey Lawyer.

At the New Jersey State Bar Association Annual Meeting on May 16, 2024, a panelist at the Cannabis Law Committee event made a surprising announcement that was greeted by cheers from the audience: the United States Justice Department would start the process to reschedule cannabis from Schedule I to Schedule III. The possibilities that rescheduling presented for the industry were exciting, including: a possible reduction in banking challenges, federal patent and trademark protection, and, the elimination of the applicability of 280E, a tax regulation prohibiting cannabis companies from taking certain tax deductions. The promise of rescheduling, however, has run into strong opposition from interested groups, and according to some in the know, the Drug Enforcement Agency (DEA). Those challenges and the change in administration in Washington, D.C., have resulted in doubts about how the rulemaking process and potential lawsuits may delay, or even end, the attempted rescheduling; and serious questions about what the practical consequences might be.

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