After President Trump’s executive order to expedite The cannabis industry has been plagued by questions about legal implications since the rescheduling of the drug in December, 2025.
While Acting Attorney The General Todd Blanche’s Order moving medical cannabis licensed by states to Schedule III was a successful move that pushed this long-awaited classification over the finish line. However, the order raised more legal questions than answers.
Now the non-partisan Congressional Research Service published a formal assessment of the Department of Justice’s rescheduling, which clarifies the legal limitations of that route and lays out the legislative pathway for both legislators.
The report highlights where Congress needs to step in, as the DOJ’s and President Bush’s legal authority ends.
Blanche’s Order: What it can and cannot Do
The order from last month, to put it simply, divided the rescheduling procedure into two separate parts. Schedule III now contains FDA-approved medical cannabis along with any products falling under a license issued by a state.
The adult-use marijuana, also known as products that are traded for commercial purposes for recreational use, is still classified under Schedule I. However, an upcoming hearing on June 29 will consider expanding Schedule III’s classification to include the remainder of the cannabis market.
The CRS says that there are several key issues that could delay and complicate this process. The political will required to overcome these barriers is not certain.
Adult-use cannabis cannot benefit from the treaty-based mechanisms that the DOJ uses to quickly move medical marijuana to Schedule III, without the usual notice and comment rulemaking.
The full administrative procedure is required in Phase 2, which exposes the client to an already intense legal opposition. It also exposes you to litigation.
Separately, pursuant to the Federal Food, Drug and Cosmetic Act, all drugs must be approved by FDA before they can be sold in interstate commerce. This is true regardless of cannabis’s Schedule I, Schedule III or any other classification. This barrier can only be removed by Congressional action, or a successful FDA approved process. Epidiolex from Jazz Pharmaceuticals is currently the only natural cannabis-derived drug that is FDA approved. There are no products on the cannabis state market near this approval.
The CRS confirms the mandatory minimum sentence for cannabis offenses, which is based solely on quantity and not CSA classification. These sentences would also remain in force even if adult use cannabis was moved to Schedule 3. CSA penalties for general criminal offences would decrease under Schedule III. However, the statutory minimum penalties are not affected by rescheduling.
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What can Congress do?
CRS has developed several options that can help achieve the goals of the industry in rescheduling.
Congress is free to reschedule or deschedule marijuana, and change the legal status, independent of the DEA’s administrative processes.
Alternatively, a legislative move to Schedule III could simultaneously amend the FD&C Act, thus removing the FDA-approval barrier that executive action cannot touch, while extending 280E relief to recreational operators. At the time this article was published, no such legislation had been passed.
Several of the proposals being considered by the 119th Congress go even further and remove cannabis completely from the CSA. Some move the other way, such as a bill currently being considered that amends Section 280E to specifically deny deductions from any cannabis businesses, no matter what schedule.
CRS reports that 26 House Republicans and more than 20 Republican Senators have asked the Administration to stop rescheduling.
Jeff Schultz of Foley Hoag notes that organized opposition is well resourced and strategically patient. Smart Approaches Marijuana hired former Attorney-General Bill Barr to fight any final action on rescheduling.
Blanche’s use of the treaty to avoid notice and comment rulemaking was legally grounded by DEA precedent, but it is expected to be challenged under Administrative Procedure Act. Some opponents might claim the use of treaty reasoning was a ploy to avoid scrutiny. It is clear from the order’s explicit severability clause that the DOJ expected a partial narrowing of the judicial scope and drafted the document accordingly.
What do all these changes mean to investors?
By any standard, investor sentiment prior to this announcement was sour. The ATB Cormark Capital Markets Spring 2026 Cannabis Investor Sentiment Survey, conducted 13–21 April, the day before rescheduling was first reported as imminent, found investors had assigned only a 55% probability to rescheduling occurring within 12 months, the second-lowest figure across six surveys since 2023.
ATB described the dynamic as ‘fatigue increasing as regulatory catalysts have yet to materialise.’ In the past six months, only 17.6% of respondents reported an increase in net exposure with multistate operators.
The MSOS ETF ended at US$5.11 in the 22nd of April. ATB found that 46.2% investors expected the MSOS ETF to hit US$10 after rescheduling. These projections were based on the full order, and not just a partial delivery.
ATB’s modeling suggests that full rescheduling would push the Tier 1 MSO EBITDA/EV multiple from its current average of 5,8x to 14.1x. Equity upsides could be as high as 240% for major operators.
Todd Harrison, CB1 Capital’s Founding Partner, Chief Investment Officer, and Chief Operating Officer, said that the fact that an order was only partially filled should not be interpreted as a failure.
Speaking to Bloomberg the day after the ruling, he described the April order as ‘a thoughtful surgical move’ and characterised it as the opening stage of a structured sequence.
The first step is “This”. “This is the first step. He said, “This mission is not complete.”
Harrison argued the industry has always required three things for full normalisation: ‘growth, regulatory parity, and tax clarity’, and that while the April order partially delivers on the latter two for the medical segment, the growth thesis depends on what the June hearings produce for adult-use operators.
After President Trump’s executive order to expedite The cannabis industry has been plagued by questions about legal implications since the re-scheduling of the drug in December 2025.
While Acting Attorney While General Todd Blanche’s decision to move state-licensed medicinal cannabis from Schedule II to Schedule III pushed through the long-awaited legal process, it also raised many questions.
The nonpartisan Congressional Research Service has now published a legal analysis of the Department of Justice’s rescheduling orders, clarifying the legal limits of this approach and laying the path for legislators on both sides of debate.
The report highlights the fact that Congress is required to go further in order to extend the authority of both the DOJ and the president.
Blanche’s Order: What it can and cannot Do
In a nutshell the order of last month divided rescheduling into two phases. Schedule III, the Controlled Substances Act, now includes medical cannabis as well as FDA-approved products.
A hearing is scheduled for the 29th of June, which will likely consider whether to extend Schedule III to all other cannabis products.
According to CRS, a number key issues could significantly slow down and delay this process. The political will required to overcome these barriers is not certain.
Adult-use cannabis cannot benefit from the treaty-based mechanisms that the DOJ uses to quickly move medical marijuana to Schedule III, without the usual notice and comment rulemaking.
The full administrative procedure is required in Phase 2, which exposes the client to a fiercely competitive legal environment. It also exposes you to litigation.
Under the Federal Food, Drug and Cosmetic Act, all drugs must be approved by FDA before they can enter the interstate market. This is true regardless of cannabis’s Schedule I, Schedule III or any other classification. This barrier can only be removed by Congressional action, or a successful FDA approved process. Epidiolex from Jazz Pharmaceuticals is currently the only natural cannabis-derived drug that is FDA approved. There are no products on the cannabis state market near this approval.
The CRS’s analysis confirms, too, that the quantity-based minimum sentences, written into law and not based on CSA classifying, will remain in effect even if cannabis for adult use is moved to schedule III. Schedule III would reduce some general CSA criminal punishments, but the statutory minimums will not be affected by rescheduling.
READ MORE…
What can Congress do?
CRS has developed several options that can help achieve the goals of the industry in rescheduling.
Congress is free to reschedule or deschedule marijuana, and change the legal status, independent of the administrative processes, fact-finding, and procedural requirements that bind DEA.
Alternatively, a legislative move to Schedule III could simultaneously amend the FD&C Act, thus removing the FDA-approval barrier that executive action cannot touch, while extending 280E relief to recreational operators. At the time this article was published, no such legislation had been passed.
Several of the proposals being considered by the current 119th Congress go even further and remove cannabis completely from the CSA. Other proposals move in the opposite directions, like a recent bill which would specifically amend Section 280E so that deductions are denied for cannabis businesses regardless of their schedule.
CRS reports that 26 House Republicans and more than 20 Republican Senators have asked the Administration to stop rescheduling.
Jeff Schultz of Foley Hoag notes that organized opposition is well resourced and strategically patient. Smart Approaches Marijuana hired former Attorney-General Bill Barr to fight any final action on rescheduling.
Blanche’s use of the treaty to avoid notice and comment rulemaking was legally grounded by DEA precedent, but it is expected to be challenged under Administrative Procedure Act. The opponents may claim that the rationale of treaty was used to escape scrutiny. It is clear from the order’s explicit severability clause that the DOJ expected a partial narrowing of the judicial scope and designed the document accordingly.
What do all these changes mean to investors?
By any standard, investor sentiment prior to this announcement was generally depleted. The ATB Cormark Capital Markets Spring 2026 Cannabis Investor Sentiment Survey, conducted 13–21 April, the day before rescheduling was first reported as imminent, found investors had assigned only a 55% probability to rescheduling occurring within 12 months, the second-lowest figure across six surveys since 2023.
ATB described the dynamic as ‘fatigue increasing as regulatory catalysts have yet to materialise.’ In the past six months, only 17.6% of respondents reported an increase in net exposure with multistate operators.
The MSOS ETF ended at US$5.11 in the 22nd of April. ATB found that 46.2% investors expected the MSOS ETF to hit US$10 after rescheduling. These projections were based on the full order, and not just a partial delivery.
ATB’s modelling indicates that full rescheduling may push Tier 1 MSOs EV/EBITDA multipliers from the current average 5.8x towards 14.1x. Potential equity gains could range between 240% and 240% among major operators.
Todd Harrison is the Founding Partner at CB1 Capital and the Chief Investment Officer. He argues that the nature of the partial order shouldn’t be misconstrued as failure.
Speaking to Bloomberg the day after the ruling, he described the April order as ‘a thoughtful surgical move’ and characterised it as the opening stage of a structured sequence.
The first step is “This”. “This is the first step. “This isn’t a mission completed,” said he.
Harrison argued the industry has always required three things for full normalisation: ‘growth, regulatory parity, and tax clarity’, and that while the April order partially delivers on the latter two for the medical segment, the growth thesis depends on what the June hearings produce for adult-use operators.
Cannabis Law Resources for Poland
Browse essential legal pages on cannabis sales and cultivation in Poland. You can use these resources to learn about the requirements for certification, permissions 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