Marijuana Rescheduling Begins: What Employers Need to Know About DOJ’s New Order

The US Department of Justice (DOJ) recently issued a final order (the Order) immediately rescheduling certain marijuana-related products from Schedule I to Schedule III, including (1) “drug products containing marijuana that have been approved by the Food and Drug Administration (FDA)” and (2) “marijuana subject to a state medical marijuana license.” The DOJ also announced an expedited hearing, beginning on June 29, 2026, to review the broader rescheduling of marijuana from Schedule I to Schedule III.

The Order follows President Donald Trump’s Executive Order 14370, Increasing Medical Marijuana and Cannabidiol Research. This change marks a departure from marijuana’s prior treatment under federal law.

Under the Controlled Substances Act (CSA), Schedule I drugs are those with “no currently accepted medical use and a high potential for abuse.” Schedule III drugs are those with “moderate to low potential for physical and psychological dependence” and include substances such as ketamine, anabolic steroids, and testosterone.

IMMEDIATE RESCHEDULING

Utilizing its authority under the Single Convention on Narcotic Drugs, the DOJ changed the schedule designation of “FDA approved marijuana as defined in the CSA, marijuana extracts, and delta-9-tetrahydrocannabinol and other compounds derived from the marijuana plant” as well as marijuana products “subject to a state-issued license to manufacture, distribute, and/or dispense marijuana or products containing marijuana for medical purposes.”

In effect, the Order legitimizes medical marijuana prescribed under state law and drugs containing marijuana approved by the FDA. The Order does not legalize marijuana for recreational purposes or affect the legal status of medical marijuana in states where it remains unlawful. Rather, the Order integrates existing state licensing schemes into a new comprehensive framework, calling it the “most effective and efficient means of achieving the CSA’s objectives with respect to medical marijuana.”

While the Order does not directly address workplace policies governing on- or off-duty marijuana use, it may still have meaningful implications for employers. In states where marijuana is legal but medical marijuana laws do not provide explicit workplace protections, this more permissive federal stance is likely to increase Americans with Disabilities Act (ADA) claims by applicants or employees who experience adverse employment actions due to their off-duty medicinal marijuana use. While some courts previously rejected such ADA claims on the grounds that marijuana was illegal under federal law, in states with existing legal medical marijuana schemes, this reasoning no longer applies.

IMPACT ON REGULATED AND NON-REGULATED EMPLOYERS

The impact of the new final order on other federal agencies is still unclear. For example, the US Department of Transportation (DOT) and other federal agencies that impose drug testing requirements have not yet announced changes to their existing drug testing regulations. Previously, in response to Executive Order 14703, the DOT announced it would not be changing any processes or regulations until the rescheduling process was complete. But because marijuana prescribed under state law is now rescheduled, this may change.

For non-regulated employers, the DOJ’s Order does not address drug testing and thus do not expressly prohibit employers from continuing to test applicants and employees for medical marijuana, nor does the Order prohibit employers from maintaining zero-tolerance policies regarding workplace possession of medical marijuana or on-the-job impairment by medical marijuana (policies that address recreational marijuana are not impacted by the Order).

However, the rescheduling of certain marijuana products reflects a shift in federal policy toward the drug and could result in increased scrutiny of workplace policies, particularly those pertaining to off-duty use of medical marijuana that would not result in on-the-job impairment or, possibly, on-the-job use that does not impact an employee’s ability to perform their job functions safely and proficiently. This will be an area to monitor closely, as it is unclear how the Order will impact the discretion employers currently have under federal law to test for medical marijuana and base adverse employment actions on tests that are positive for medical marijuana.

EXPEDITED HEARING

The DOJ’s expedited hearing seeks to reschedule marijuana in its entirety to Schedule III, which would have broader implications for employers. The new hearing is scheduled to begin on June 29, 2026, and end no later than July 15, 2026. This compressed timeline seems to reflect the administration’s priority of rescheduling marijuana as quickly as possible. Following the new, expedited hearing process, the DOJ could issue a final rule in the Federal Register as early as late July. The rule would need to be published for at least 30 days, or potentially up to 90 days if it is considered a “major rule” under the Congressional Review Act, which it likely would be, before it could take effect. Whether these efforts will be successful remains to be seen.

Anti-rescheduling parties have made their intention clear that they will attempt to block any Schedule III rule. Prior efforts by the Biden administration to reschedule marijuana were hamstrung by issues during the hearing process. DEA Administrator Terry Cole has stated that the agency is “expeditiously moving forward with the administrative hearing process—bringing consistency and oversight to an area that has lacked both.”

Some congressional leaders have also expressed their opposition to rescheduling. On April 29, 2026, the House Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies approved a funding bill containing a provision that, if enacted, would block the DOJ from using its funds to reschedule marijuana. Similar provisions have been introduced but have never been made into law.

Nevertheless, given the likelihood of challenge, it is unclear whether broader marijuana rescheduling efforts will proceed on the timeline anticipated by the administration.

We will continue to monitor developments related to marijuana rescheduling and provide updates as they emerge.