The United States Department of Justice’s unprecedented move to reschedule state-authorized medical cannabis products to Schedule III has been widely welcomed across the industry—but its impact on Washington, D.C. is far less clear.
Under a final order issued by Acting Attorney General Todd Blanche, cannabis products authorized under state medical programs—including those in the District—are being reclassified from Schedule I to Schedule III under the Controlled Substances Act.
The order explicitly includes Washington, D.C. On page 27, it defines a “state medical marijuana license” as one issued by “a state entity (or by a District of Columbia entity or a federal territorial entity),” confirming that D.C.’s program is covered.
One of the most significant uncertainties lies in how the order addresses patient eligibility.
The DOJ specifies that medical cannabis certifications must be signed on the day of issuance and identify the issuing practitioner. That requirement may directly conflict with D.C.’s current system, which has allowed self-certification since 2022, eliminating the need for physician approval.
It remains unclear how this federal requirement will apply to D.C. patients who self-certify.
Meredith Kinner, a lawyer with cannabis law firm Kinner & McGowan, said she is not ready to characterize the order as a clear win for the District.
“It’s putting that barrier that D.C. knocked down to expand the program back up,” she said.
Despite regulatory uncertainty, the financial implications for licensed businesses are more straightforward.
By moving medical cannabis to Schedule III, D.C. operators are expected to no longer be subject to IRS 280E, which has long prevented cannabis businesses from deducting standard operating expenses.
John McGowan, also a lawyer with Kinner & McGowan, emphasized the importance of that change.
“The fact that they will be allowed to take deductions that 280E blocked is crucial and will also entice more investment in the industry,” he said.
Hearings scheduled for later this year are expected to address whether those tax benefits could be applied retroactively, a decision that could significantly impact operators’ finances.
The order also raises broader legal questions about how this new framework will function.
Morgan Fox of the National Organization for the Reform of Marijuana Laws (NORML) noted that rescheduling cannabis based on state licensure is an unprecedented approach and likely to face legal challenges.
“We’ve never seen anything like this, where these specific products are being put into a different schedule just based on their legal status within a given state,” Fox said.
He also stressed that the order does not change the underlying federal illegality of cannabis.
“Everybody that is supposedly now covered by a Schedule III for product-specific issues is still in violation of federal law,” Fox said.
Legal challenges are widely expected, and the Drug Enforcement Administration has scheduled additional administrative hearings beginning June 29, 2026, to consider broader rescheduling questions.
Fox still finds issue with the order though. “It’s unnecessarily complicated,” he said. “The easiest solution would be to remove cannabis from the schedule of controlled substances altogether.”
For now, D.C. remains in a uniquely complex position—benefiting from federal recognition of medical cannabis while facing new regulatory tensions that could reshape how its program operates.
* Please note that Kinner & McGowan are publishers of The Outlaw Report. However, they are separate from all editorial decisions.
