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by Richard Y. Cheng
Ritter Spencer Cheng PLLC

Interim Attorney General Todd Blanche signed an order on April 22, 2026, which reclassifies state-licensed medical marijuana and U.S. Food and Drug Administration (“FDA”) approved drugs containing marijuana be rescheduled as a Schedule III substance under the Controlled Substances Act (“CSA”), the same category as substances like ketamine. The order also applies to marijuana extracts as defined in 21 CFR 1308.11(d)(58) and naturally occurring delta-9-THC derived from the marijuana plant.

The order does not legalize adult-use marijuana, nor does it reschedule adult-use marijuana to a Schedule III. According to the Justice Department, the Drug Enforcement Agency (“DEA”) will hold hearings in June to consider broader rescheduling of marijuana, not just medical programs.

A primary goal for the Trump administration is to strengthen medical research, while preserving its authority and maintaining control. And the shift to Schedule III does mean that medical marijuana researchers would no longer have to go through the onerous process of obtaining a Schedule I license to do that work. That process has long been seen as intensely rigorous, including tight laboratory regulations to acquire and study marijuana. One noted feature of this order was Todd Blanche and the DEA giving credit to the Department of Health and Human Services (“HHS”) recommendation for rescheduling in 2023, further supporting its decision to reschedule marijuana.

Here is an overview of the order:

• Outlined Schedule III regulatory requirements for parties who handle exclusively FDA-approved marijuana drugs – i.) DEA registration for persons who handle FDA-approved marijuana drugs; ii.) Schedule III FDA-approved marijuana drugs must be disposed of in accordance with applicable state and federal requirements; iii.) entities that transfer marijuana to patients (e.g., dispensaries) must register with the DEA as practitioners; iv.) content-specific prescription must be provided prior to dispensing FDA-approved marijuana drugs; v.) DEA registrants must maintain and submit records for FDA-approved marijuana drugs and vi.) DEA registrants must comply with DEA security requirements, labeling and packaging, and inventory requirements.
• DEA provided a definition for “medicinal cannabis,” to exempt state legal medical marijuana from the requirement that medicinal cannabis be FDA-approved, while allowing it to market under the Federal Food, Drug, and Cosmetic Act (“FD&C Act”).
• State-licensed medical marijuana entities must register for a DEA license to manufacture, distribute, and dispense marijuana for medical purposes under federal law – applying for a DEA registration by state-licensed medical marijuana entities have historically been prohibited.
• Acknowledgment by the Attorney General that state-licensed medical marijuana programs have the proper infrastructure to meet the objectives of federal registration and recordkeeping requirements – in short, the federal medical marijuana program defers to and functions through state licensure programs.
• There is an expedited process whereby state licensees may submit their existing state credentials as conclusive evidence of state authorization to receive DEA registration for manufacturing, distribution, and dispensaries. The DEA must grant registration unless doing so would be inconsistent with the public interest or under the Single Convention.
• DEA regulations (21 CFR 1312.30) to add FDA-approved marijuana drugs and state-licensed medical marijuana to the list of Schedule III – Schedule V controlled substances that are subject to the import and export permit requirements.
• DEA registrants can apply for and receive import and export licenses – state licensees could potentially access the international market.
• DEA will be an industry business partner – DEA will purchase and sell the marijuana grown by state licensees as required by DEA’s regulations and the Single Convention. Registered manufacturers must store crops in DEA facilities and each registrant must provide DEA with information on the cultivation location.
• Researchers registered with the DEA are shielded from civil and criminal liability under the CSA if marijuana is ascertained from state licensees for scientific research.
• State medical licensees will no longer be subject to Internal Revenue Code 280E, but tax status determination is not provided and a tax expert is recommended to make such a tax determination – retrospective relief from Section 280E liability is being considered by the Secretary of Treasury.

It’s clear that rescheduling marijuana to a Schedule III by the Trump administration is aimed at state-licensed medical cannabis and FDA-approved marijuana drugs, so determining the scope of Schedule III application will be necessary. For example, synthetically derived tetrahydrocannabinol (“THC”) and hemp consumable products exceeding 0.4 mg of THC after November 12, 2026, would not fall within the scope of this order’s rescheduling effects. Also, there will likely be challenges and/or disputes over dual licenses that allow businesses to sell adult-use and medical marijuana, along with tracking 280E liabilities for dual licensees.

While rescheduling did not apply to all forms of marijuana (and by no means is this legalization in any way), this is still a step in the right direction. The hearing on June 29, 2026, will provide more clarity on the breadth of the Schedule III classification on marijuana. ♦

Richard Y. Cheng | 12-Year College Fellow

Richard Y. Cheng, a distinguished member of Ritter Spencer Cheng PLLC, brings a wealth of experience and expertise in corporate transactions, regulatory and compliance matters, and administrative appeals. His profound knowledge of healthcare and corporate M&A law has led him to represent a diverse range of investment platforms (e.g. private equity, family offices, venture capital funds) and healthcare providers ranging from post-acute care providers (e.g. skilled nursing facilities, assisted living facilities, hospices, and home health agencies), hospitals, physician groups, ancillary providers, behavioral health facilities, management service organizations, dental services organizations, NPHOs and veterinarians. Richard’s adeptness in navigating various healthcare regulations has solidified his reputation as a trusted legal advisor in healthcare law.

At Ritter Spencer Cheng PLLC, Richard leads the healthcare and corporate M&A practice, offering representation to a broad range of investors, healthcare organizations, and providers. His extensive background includes dealing with the Stark Law, the Anti-Kickback Statute, the False Claims Act, HIPAA, EKRA, CMP assessments, corporate practice of medicine and dentistry laws, and state related regulations. Prior to forming Ritter Spencer Cheng, PLLC, Richard was an equity partner at an Am Law 100 global law firm, where he was a member of the corporate practice group and the healthcare section, and he chaired the firm’s hemp/regulated products practice group.

In addition to his traditional healthcare practice, Richard developed a cannabis regulatory and corporate practice starting in late 2013. As a leading cannabis attorney, Richard served as outside general counsel to the Texas Cannabis Industry Association, co-authored an FDA primer in preparation for the 2019 FDA public hearing on CBD products, and has been named a top 250 cannabis legal expert by DataBird Research Journal. He represents a broad base of cannabis related clients, including private equity groups investing in the cannabis industry, physicians, medical marijuana dispensaries, seed developers, cultivators, processors, wholesalers, retailers, distribution centers, and ancillary providers (e.g., testing labs, biomass brokerage firms, etc.), and marketers. Richard created and taught the cannabis law course at the University of North Texas at Dallas College of Law, where he served as an adjunct faculty from 2020 to 2022.

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