The announcement of the rescheduling last week was a shock to most, including us at MEDCAN24.
We were reluctant to make the bet despite the reports from various sources that a major announcement would soon take place. Stock swings in the past two years, hollow or ambiguous promises, bureaucratic red-tape, and ambiguous statements made by multiple sources meant we had a lot of doubts.
The surprise was not just that it finally occurred, but perhaps because we had been naive to expect it.
The order by the Acting Attorney-General Todd Blanche to reschedule state-licensed medicinal cannabis is an important and durable legal change. However, reading comments from attorneys, compliance experts, analysts, etc. in recent days, it is clear that this battle is not over.
Already the clock has started to tick
A deadline which has been almost completely ignored in the first round of media coverage is what most state licensed medical operators are facing.
Operators that file for DEA Registration within 60 days after the Federal Register order is published, a period that ends around the 22nd of June, qualify for accelerated review and can continue to operate under the existing state licenses during the pending federal application.
The DEA committed to process early applications within 6 months. CRB Monitor’s Paul Cheveriat, an analyst with CRB Monitor, noted that 18444 licences for medical cannabis are active in the US.
Processing all of them within six months would be, as Cheveriat puts it, ‘a major feat.’
What’s more, not all state medical cannabis programmes are created equal, and it remains unclear whether the DEA will treat all state licensing regimes as meeting its standard for ‘robust protections against diversion, requirements for record-keeping and reporting, and safety and inspection measures.’
CRB Monitor’s research shows that just 32% of licenses in use are for medical purposes. By Thursday’s decision, the remaining 68% of licences, which cover operators in states that allow adult use, remain unchanged.
The IRS has yet to provide guidance on how these operators and large MSOs can separate their medical revenue from recreational income for 280E.
READ MORE…
No one talks about the compliance trap
Regular MEDCAN24 Deb Tharp, a contributor, highlights an issue of compliance that, until now, has been under-reported.
By validating state medical cannabis certifications at the federal level, Tharp argues, the order has simultaneously brought them under federal jurisdiction, and with that comes the ‘corresponding responsibility’ doctrine, the same enforcement mechanism the DEA used to dismantle telehealth platforms in the ADHD medication space.
Under Schedule III, a cannabis sale only has federal protection if it serves a ‘legitimate medical purpose.’ The order preserves the existing state recommendation model for now, but the DEA’s data pipeline, connecting federal registrant records, state seed-to-sale systems, and certification records, creates exactly the kind of audit infrastructure the agency has used previously to identify and prosecute what it considers ‘pill mills.’
“The ‘Wild West’ of medical recommendations is over,” Tharp writes. “The Federal Sheriff is here, and he uses your own data in order to track you.”
The coming months will be more of a sprint to compliance than anything else. This is especially true for dispensaries that have high volume telehealth platforms, practitioners who issue certifications in large numbers, and operators who claim 280E on revenue which may not pass scrutiny as being medical.
The data and the opinion of investors
The timing of the Thursday announcement created a unique natural experiment for investors. ATB Cormark Capital Markets Spring 2026 Cannabis Investors Sentiment survey, conducted from April 13-21 – the day prior to the first report of a rescheduling being imminent – provides an objective preannouncement benchmark against which market expectations can be measured.
In the survey, investors assigned a probability only of 55% for rescheduling to occur within the next 12 months. That’s down from 60% the prior survey. It is also the lowest recorded probability across all six surveys done since 2023.
Only 17.6% had increased the net exposure of their respondents to MSOs over the past six months. 35.3%, on other hand, had reduced it. The ATB analysts described this dynamic as ‘fatigue increasing as regulatory catalysts have yet to materialise.’
ATB suggests with full rescheduling that Tier 1 MSOs EV/EBITDA could move toward 14.1x, from the current average of 5.8x. Equity fair value modeling, using tax savings spanning 2026- 2030, and two percentage point discounts in discount rate, shows potential for upsides to market prices.
MSOS ETF finished Wednesday at $5.11. ATB surveyed investors and found that 46.2% expected the MSOS ETF to hit $10 after rescheduling. The projections, however, were for a complete rescheduling. What has actually been received is merely a partial rescheduling.
The markets are likely to be in turmoil as projections are revised based on recent events and market sentiment.
A picture of litigation
Foley Hoag‘s Jeff Schultz, whose analysis of the order is among the most rigorous published so far, notes that opposition has been organised and well-resourced.
More than 20 Republican senators and 26 House Republicans have formally urged the administration to abandon rescheduling before the December executive order, and Smart Approaches to Marijuana (SAM) has reportedly retained former Attorney General Bill Barr to litigate against any final rescheduling action.
Although legally backed by DEA precedents and Blanche’s treaty route to avoid notice-andcomment rulemaking is likely be challenged on Administrative Procedure Act basis,
The opponents may claim that either the evidence is not sufficient or the exception for treaties was invoked improperly. Injunctions and stays may be requested by the courts. Also, the severability of the order indicates that DOJ was anticipating partial challenges.
You should also consider the Congressional Review Act. There is 60 days after publication in the Federal Register before a ruling becomes final. Congress, however, could act during this period to prevent it from becoming effective.
The Phase 2 of the project and its potential
It is unclear what can be achieved by the 29th of June hearing for 68% industry members who are not currently covered under the Thursday order. Foley Hoag’s analysis shows that the answer depends, in part, on whether Phase 2 follows the rulemaking process or the treaty-based approach used during Phase 1.
Extending Schedule III to include recreational cannabis is outside the scope of what can be done by treaty mechanisms. The full administrative procedure would be required to create a second rule that covers adult-use marijuana, including all of the potential litigation.
If the DOJ sticks to its timeline, then a final regulation could be issued as early as 2020. The litigation could materially extend this horizon. The fight is not over for most US cannabis operators.
The announcement of the rescheduling last week was a shock to most, including us at MEDCAN24.
The last two years’ stock fluctuations, vague or hollow promises and red tape in the bureaucracy made us reluctant to bet on it.
The surprise was not just that it finally occurred, but perhaps because we had been naive to expect it.
The order by the Acting Attorney-General Todd Blanche to reschedule state-licensed medicinal cannabis is an important and durable legal change. However, reading comments from attorneys, compliance experts, analysts, etc. in recent days, it is clear that this battle is not over.
Already the clock has started to tick
A deadline which has been almost completely ignored in the initial reporting is the most pressing practical issue for all state licensed medical operators.
Operators filing for DEA registration in 60 days from the publication of the Federal Register Order, a time frame that expires on or around June 22 qualify for accelerated review and can continue working under existing state licensing while federal application is pending.
The DEA committed to process early applications within 6 months. CRB Monitor’s Paul Cheveriat, an analyst with CRB Monitor, noted that 18444 licences for medical cannabis are active in the US.
Processing all of them within six months would be, as Cheveriat puts it, ‘a major feat.’
What’s more, not all state medical cannabis programmes are created equal, and it remains unclear whether the DEA will treat all state licensing regimes as meeting its standard for ‘robust protections against diversion, requirements for record-keeping and reporting, and safety and inspection measures.’
CRB Monitor’s research shows that just 32% of licenses in use are for medical purposes. By Thursday’s decision, the remaining 68% of licences, which cover operators in states that allow adult use, remain unchanged.
The IRS has yet to provide guidance on how these operators and large MSOs can separate their medical revenue from recreational income for 280E.
READ MORE…
No one talks about the compliance trap
Regular MEDCAN24 Deb Tharp, a contributor, highlights an issue of compliance that, until now, has been under-reported.
By validating state medical cannabis certifications at the federal level, Tharp argues, the order has simultaneously brought them under federal jurisdiction, and with that comes the ‘corresponding responsibility’ doctrine, the same enforcement mechanism the DEA used to dismantle telehealth platforms in the ADHD medication space.
Under Schedule III, a cannabis sale only has federal protection if it serves a ‘legitimate medical purpose.’ The order preserves the existing state recommendation model for now, but the DEA’s data pipeline, connecting federal registrant records, state seed-to-sale systems, and certification records, creates exactly the kind of audit infrastructure the agency has used previously to identify and prosecute what it considers ‘pill mills.’
“The ‘Wild West’ of medical recommendations is over,” Tharp writes. The federal sheriff has arrived in town and is using your data to track you.
The coming months will be more of a sprint to compliance than anything else. This is especially true for dispensaries that have high volume telehealth platforms, practitioners who issue certifications in large numbers, and operators who claim 280E on revenue which may not pass scrutiny as being medical.
The data and the opinion of investors
The timing of the Thursday announcement created a unique natural experiment for investors. ATB Cormark Capital Markets’ Spring 2026 Cannabis Investors’ Sentiment Study, conducted on April 13-21 (the day before the first reports of rescheduling), provides a baseline for measuring market expectations.
Investors surveyed gave a probability of 55% that rescheduling would occur in the coming twelve months. This is down from the 60% recorded in the last survey, and represents the second lowest probability in six surveys since 2023.
Only 17.6% had increased the net exposure of their respondents to MSOs over the past six months. 35.3%, on other hand, had reduced it. The ATB analysts described this dynamic as ‘fatigue increasing as regulatory catalysts have yet to materialise.’
ATB suggests with full rescheduling that Tier 1 MSOs EV/EBITDA could move toward 14.1x, from the current average of 5x. Equity fair value modeling, using tax savings from 2030 to 2026, and two percentage points reductions in discount rate, shows potential upsides to market prices of 240% on average across major MSOs. Ascend & Verano show the most dramatic moves, given their depressed current multiples.
MSOS ETF finished Wednesday at $5.11. ATB’s research found 46.2% expected the MSOS ETF to hit $10 or higher upon rescheduling. These projections are based on a full rescheduling and the actual delivery is only partial.
We can expect to continue to experience market volatility as the projections and forecasts will be recalculated in light of the most recent developments.
A picture of litigation
Foley Hoag‘s Jeff Schultz, whose analysis of the order is among the most rigorous published so far, notes that opposition has been organised and well-resourced.
More than 20 Republican senators and 26 House Republicans have formally urged the administration to abandon rescheduling before the December executive order, and Smart Approaches to Marijuana (SAM) has reportedly retained former Attorney General Bill Barr to litigate against any final rescheduling action.
Although legally based in DEA precedents and a treaty-based approach, Blanche’s method of bypassing notice-andcomment rulemaking is likely face legal challenges based on Administrative Procedure Act.
The opponents may claim that either the evidence is not sufficient or the exception for treaties was invoked improperly. Injunctions and stays may be requested by the courts. Also, the order contains an express provision for severability that signals the DOJ’s anticipation of partial challenges.
You should also consider the Congressional Review Act. There is 60 days after publication of the final decision in Federal Register before it takes effect. Congress, however, could act during this period to prevent it from taking full effect, but that would take a majority in both chambers, as well a presidential sign-off.
The Phase 2 of the project and its potential
It is unclear what can be achieved by the 29th of June hearing for 68% industry members who are not currently covered under the Thursday order. Foley Hoag’s analysis shows clearly that the outcome depends upon whether or not the second phase of the process is a full rulemaking procedure rather than a treaty path used in Phase 1.
Extending Schedule III to include recreational cannabis is outside the scope of what can be done by treaty mechanisms. The full administrative procedure would be required to create a second rule that covers adult-use marijuana, including all of the potential litigation.
If the DOJ sticks to its timeline, then a final regulation could be issued as early as 2020. The litigation could materially extend this horizon. The battle for US cannabis producers is still far from being over.
Cannabis Law Resources for Poland
Discover essential legal information about the cultivation of cannabis, its sale, and regulations governing medical products in Poland. These guides will help you understand the legal requirements, such as certifications, permits, and compliance.
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Polish News Registration and Interests of Cannabis Businesses
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Permissions for Cannabis Sales in Poland
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Authorization for Importing or Manufacturing Medical Products
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Permission for Manufacturing or Importing Medical Products
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Certificate of Good Manufacturing Practices (GMP)
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Registration of Medical Products in Poland