The federal government’s treatment of cannabis has been under scrutiny for decades. Currently, cannabis is classified as a Schedule I substance under the Controlled Substances Act (CSA), a category reserved for drugs with no accepted medical use and a high potential for abuse. Policymakers are now considering two major shifts—rescheduling to Schedule III or removing cannabis from the CSA altogether (descheduling). Each path carries profound consequences for the balance of power between federal oversight and state authority.

Understanding the Federal Role

The CSA governs how controlled substances are classified and regulated. A drug’s schedule determines how it can be researched, prescribed, or sold:

• Schedule I: No medical use, strict criminal penalties, and near-total prohibition.
• Schedule III: Recognized medical use, prescriptions allowed, but still subject to federal regulation.
• Descheduling: Removal from the CSA, leaving regulation largely to states or new federal legislation.

The choice between rescheduling and descheduling is not merely symbolic. It determines whether cannabis remains under centralized federal control or becomes primarily a matter of state law.

Rescheduling: A Step Toward Medical Legitimacy

If cannabis moves to Schedule III, it would mark the first time federal law acknowledges its medical value. For states, however, this shift would raise complex challenges:

• Integration with Healthcare Systems: Doctors could prescribe cannabis like other Schedule III substances. States with independent medical cannabis programs might need to realign or phase out registries, as federal rules would prioritize prescriptions over state certifications.
• Pharmacies vs. Dispensaries: Traditional pharmacies, not state-licensed dispensaries, could become the main distribution channels. This raises questions about what happens to thousands of dispensaries currently operating under state law.
• Business and Tax Implications: By removing cannabis from IRS Section 280E restrictions, rescheduling would allow businesses to deduct operating expenses. States that tie their tax codes to federal law would see similar financial ripple effects.
• Recreational Market Conflicts: Rescheduling does not authorize adult-use cannabis. States with legal recreational markets would remain in tension with federal law, complicating compliance and enforcement.

In effect, rescheduling offers legitimacy for medical use but risks undermining the autonomy of existing state programs, especially in states that have gone beyond medical legalization.

Descheduling: States Take the Lead

Descheduling cannabis—removing it from the CSA entirely—would be a much more dramatic change. For states, this would largely shift authority away from Washington and into their own legislatures:

• Regulatory Independence: States would decide how to license growers, distributors, and retailers. Cannabis could be treated similarly to alcohol or tobacco, with wide variations in rules from state to state.
• Interstate Commerce Issues: Once federal prohibition ends, the question of interstate cannabis trade becomes unavoidable. States that prohibit cannabis may clash with neighbors that allow cross-border sales.
• Public Safety and Standards: Without a federal framework, states would carry the burden of developing testing, labeling, and potency standards. Regulatory gaps could widen disparities between states.
• Criminal Justice Reform: Descheduling would erase federal criminal penalties, but states with prohibition statutes would still need to decide whether to maintain or repeal their own laws.

While descheduling maximizes state power, it also exposes the risks of a fragmented national system without uniform safeguards.

Legal and Policy Implications

Ultimately, the debate over rescheduling and descheduling reflects broader questions of federalism. Rescheduling preserves federal authority but disrupts state markets, while descheduling empowers states but sacrifices consistency across jurisdictions. Policymakers must weigh whether cannabis should follow the model of pharmaceuticals—with federal oversight—or alcohol, where states take the lead.

The trajectory of cannabis reform is no longer just a question of legalization—it is a question of governance. Rescheduling integrates cannabis into existing medical law but leaves adult use unresolved. Descheduling opens the door for full state autonomy but invites interstate conflicts and regulatory patchwork. For lawmakers, regulators, and businesses alike, the implications will extend far beyond cannabis itself, reshaping how state and federal authority intersect in drug policy for years to come.