Cannabis Rescheduling Just Went Quiet. Here’s Why the Adult-Use Question Still Matters.

By Melissa Diaz, CPA

Here’s something worth sitting with. The DEA’s cannabis rescheduling hearing wrapped up in July, and a lot of operators treated it like the finish line. It isn’t. Honestly, it’s closer to halftime.

Let me back up.

Back in April, the Department of Justice moved state-licensed medical cannabis and FDA-approved products from Schedule I to Schedule III. That part is real, and it’s in effect now. But adult-use cannabis, the recreational side of the market, stayed put in Schedule I. And that is exactly what this summer’s hearing was about.

So the medical question got answered months ago. The adult-use question is still open. That’s the wildcard. If you run or fund an adult-use operation, you may be left wondering, what now?

As of today, the process is in a quiet stretch. Chief Administrative Law Judge Derek Julius set August 17 as the deadline for post-hearing briefs. These are the closing arguments nobody got to make in person. They’re capped at 50 pages, and each party gets one filing. After that, the judge writes his recommendation on whether adult-use cannabis should join medical products in Schedule III.

Here’s the part that’s frustrating: There’s no deadline for any of it.

No announced timeline for the recommendation. No announced timeline for the final decision. The best estimate right now puts the recommendation in late 2026, maybe early 2027. But that’s a projection, not a promise, so I’d treat any confident determination date you hear with a little skepticism.

Once the recommendation lands, participants get 20 days to file objections. Then the whole record goes to DEA Administrator Terry Cole for the final call.

And this is the detail I find important. The judge’s recommendation is not binding. Cole can accept it, change it, or set it aside. His final order is the real decision. Not the close of testimony. Not the judge’s write-up. Just his order.

Why does that matter so much? Because the final order is the only piece a court can review. Everything before it is process. So the case doesn’t end when Cole signs. It moves to a federal appeals court, because opponents have already promised to challenge whatever comes out. Litigation is close to guaranteed here, whichever way the decision goes.

So what should you do while the lawyers write their briefs?

Get your numbers ready. This waiting period is a gift, and I mean that. For operators selling under a state medical license, the 280E picture already shifted this spring. For everyone in adult-use, it hasn’t. Not yet. If you run both, you’re living in two tax worlds at once, and that split deserves a real plan, not a guess.

Model the scenarios now. What does your tax bill look like if adult-use moves to Schedule III? What does it look like if the decision stalls into 2027? What does a favorable order followed by two years of litigation do to your cash flow? What are your options to strategize for 280E without rescheduling relief? These are answerable questions. Answering them early is how you turn uncertainty into a plan instead of a scramble.

Here’s the thing. The operators who come out ahead aren’t the ones who guess the ruling right. They’re the ones who walk in with clean books, a clear read on their 280E exposure, and a tax strategy that flexes with the outcome. That’s boring work. It’s also the work that pays.

The hearing being over feels like a moment to relax. Reach out to High Rock Accounting today to prepare instead.

Melissa Diaz, CPA

Melissa Diaz is the principal at High Rock Accounting and leads the firm’s cannabis practice. She works with operators, lenders, and investors on 280E strategy, entity structuring, and fractional CFO services, translating shifting federal policy into plans a business can actually run on. High Rock Accounting helps cannabis companies build the financial infrastructure to move when the rules do.