Over the last year or so, two points of federal cannabis reform have been in the news: (1) shifts in Congressional policy around the federal treatment of hemp (see Collin’s earlier post here for more) and (2) the Executive Branch effort to move marijuana from Schedule I to Schedule III under the Controlled Substances Act (more details in my earlier post, as well as the subsequent December 2025 Executive Order and corresponding rulemaking). Both efforts have seen notable updates in the last several weeks.
Starting with hemp: Congress recently approved a one-month delay of federal hemp restrictions that had been scheduled to take effect in November. The legislation pushes implementation to December, giving lawmakers additional time to consider whether a broader regulatory framework should replace the restrictions enacted last year. For our clients in Minnesota, Wisconsin, and beyond, the delay is welcome news, if only temporary. The arrival of December without further change could result in a significant impact on the industry in Wisconsin, and though state regulation in Minnesota will allow producers to continue to produce hemp-derived products in Minnesota, the lack of federal permission would greatly limit Minnesota’s ability to sell its products outside of Minnesota.
Turning to the marijuana rescheduling, the process is moving, albeit slowly. As a callback to my earlier post, one of the big benefits from the potential rescheduling would be the opportunity for impacted marijuana businesses to claim the business expense tax write-offs available to more conventional businesses, which is a big driver in the interest around this situation. The DEA has been active in its efforts in the last several months. From the rulemaking in the link above, the DEA under the current administration halted the rulemaking initiated in 2024 and kicked off a new process. That new process included issuing a final rule that determined marijuana regulated under state-level medical license programs could be considered a Schedule III substance. The new process reached a subsequent milestone with an administrative hearing that took place over the summer. From that hearing, the DEA Administrator will determine whether to reschedule marijuana to Schedule III.
The fight over rescheduling is not just limited to inside of the DEA. Courts are also hearing disputes over whether the DEA followed the law in rolling out this new rule. The most recent challenge to this rulemaking was SAM, Inc. v. United States Department of Justice. In this case, the court declined to stay the DEA’s rescheduling while the lawsuit works its way through the courts. This does not mean that the court ruled on the actual merits of the case (whether the DEA followed the law in the rollout of the rules), but at least allowed the DEA to continue with the process while the fight continues in the courts. Even with the stay avoided, the fight is likely to continue look after this initial ruling.
Unfortunately, the common thread for both hemp and marijuana regulation at the federal level is uncertainty. Both situations suggest at least an extension of status quo. For operators in Minnesota, Wisconsin, and beyond, now is a good time to revisit compliance policies, reconsider growth plans, and check the assumptions underlying the direction of the industry. The upside to the uncertainty is that the course forward isn’t settled yet, and a variety of possible paths remain open. For those in the industry pondering their next step, now is the time to talk to your attorney. Strategic thinking today shouldn’t just consider where the rules are now, but where they might be headed.
Thanks for reading!