The Myth, and the Reality, of Cannabis Rescheduling

Carlos Hermida
Sep 20
4 min read

Over recent months in the United States, there has been a lot of talk — and confusion — about what rescheduling cannabis under federal law really means. Many of the claims spread in the media don’t quite align with how the laws and regulatory system work. As activists, advocates, and citizens concerned with sensible cannabis reform, it’s important we understand what could change — and what will not change — if cannabis is moved from Schedule I to Schedule III under the Controlled Substances Act (CSA).

Here’s a breakdown of myths vs realities, plus what reformers should watch out for.

What is the Controlled Substances Act (CSA)?

Passed in 1970, the CSA classifies drugs/substances into schedules (I through V) based on: accepted medical use, abuse potential, and dependence risk.
Schedule I is the most restrictive: these are substances considered to have no accepted medical use and a high potential for abuse.
Schedule II–V are substances with varying degrees of medical utility and abuse risk. Moving down a schedule implies recognition of medical use and somewhat lower risk.

Have there been past efforts to reschedule cannabis?

Yes. Several administrative petitions have been made over the years to remove or reduce the scheduling of cannabis. But what makes the current moment different is:

It’s the first time the White House / federal executive branch has initiated a rescheduling effort (rather than simply responding to petitions).
In 2023, the Department of Health and Human Services (HHS) reviewed the plant’s safety and efficacy, and recommended cannabis be moved from Schedule I to Schedule III.

What rescheduling to Schedule III would do

Here are the changes that are likely or guaranteed under rescheduling:

Federal recognition of medical use Moving to Schedule III would formally mean the federal government recognizes that cannabis has “currently accepted medical use in treatment in the United States.” This does not mean full FDA approval, but it is a legal acknowledgement.
Tax relief for cannabis businesses One big practical benefit would be relief under Section 280E of the Internal Revenue Code. Right now, cannabis businesses under Schedule I are severely limited in their ability to deduct expenses as any other business does. Rescheduling would likely allow state-licensed cannabis businesses to take traditional tax deductions.
Some easing of federal restrictions tied to Schedule I status For example, penalties that are specifically tied to “Schedule I” status — such as certain housing, firearm purchasing, or other collateral consequences — might no longer apply for cannabis if it is in Schedule III.
Possibility of improved banking and regulatory clarity While not guaranteed, rescheduling could make banks more willing to serve cannabis businesses, seeing less legal risk. Regulatory frameworks might become more aligned with medical standards.

What rescheduling wouldn’t do (the myths)

There’s also a lot of misunderstanding about what rescheduling cannot accomplish, unless further action is taken.

It would not fully legalize cannabis federally. States that still prohibit cannabis would not automatically change their laws just because the federal schedule shifts. Rescheduling doesn’t give states “alcohol/tobacco‐style” autonomy. That level of freedom requires descheduling (i.e. removing it from the CSA entirely).
It would not automatically make cannabis an FDA-approved medication or over-the-counter substance. Recognizing medical use under Schedule III is different from going through the full drug approval process by FDA, which involves controlled clinical trials, safety data, manufacturing standards etc.
Change in sentencing laws or criminal penalties is not automatic. Laws specifically relating to criminalization of possession or trafficking under Schedule I would still need Congressional action to change. Just shifting the schedule doesn’t rewrite all the statutes that invoke Schedule I in penalty terms.
Rescheduling alone doesn’t resolve the research bottleneck. Some barriers are rooted not just in scheduling but in other federal statutes and regulations that are specific to cannabis — e.g. where cannabis must be sourced for trials, or how protocols must be approved. Those would require additional regulatory or legislative reform.
Insurance coverage, interstate commerce, product labelling and other regulatory areas are still murky.* Even with rescheduling, many pieces of the puzzle remain unchanged without more policy work.

Why the process seems stalled

After HHS recommended rescheduling, the Drug Enforcement Administration (DEA) is required to follow procedural steps: notice, possibly a hearing, review of public comments, etc.
Over 43,000 public comments have been submitted in support of reform, many arguing for full descheduling. But as of the latest reports, the DEA has yet to set a clear timeline, hearing date, or finalized rulemaking.

What advocates should keep an eye on

To make sure rescheduling (if it happens) results in real reform, not just symbolism, we should:

Push for descheduling, not just rescheduling, so that federal law stops treating cannabis like a dangerous Schedule I drug.
Monitor how Congress acts: many of the limiting factors (tax penalties, criminal statutes, research restrictions) require legislative change.
Watch what funding and regulatory guidelines are issued (FDA, DEA) to ensure that business, research, patient access are meaningfully improved.
Hold agencies accountable for timelines in the rescheduling process. Delays without transparency benefit no one.

Why this matters for Australia & Suncoast NORML

Although this is a U.S. issue, there are lessons for cannabis reform movements everywhere:

Terminology matters: knowing exactly what “rescheduling”, “descheduling”, “legalization”, etc., mean helps avoid misleading promises.
Incremental reform is possible and can yield real, though partial, benefits. But it’s rarely enough unless accompanied by deeper structural changes.
Advocacy strategy: pushing both from scientific evidence, patient stories, economic arguments, and legal pathways helps build a stronger case.

Conclusion

A shift of cannabis from Schedule I to Schedule III would be a significant policy change: acknowledging medical use, easing some punitive federal restrictions, and offering tax and regulatory relief. But it is not a panacea. Rescheduling does not equal legalization, does not fix all problems, and does not guarantee that every state’s laws will align with this shift.

For reform to truly succeed, we need more: descheduling, legislative reform, regulatory change, and continued advocacy. As this debate unfolds in the U.S., there’s no reason for us to stay passive — both to learn and to engage in our own jurisdiction’s reform.