DEA Pauses Broader Marijuana Rescheduling as Federal Review Process Comes Under Scrutiny
A new report from the U.S. Government Accountability Office (“GAO”), Congress’s independent auditing and oversight agency, has interrupted the broader Schedule III proceeding at a consequential stage while state-licensed cannabis businesses continue absorbing the costs and uncertainty of an already-active federal registration framework.
The federal government's broader cannabis rescheduling proceeding has been paused again. This time, the reason for the delay may matter more than another missed milestone in federal cannabis reform.
On September 29, 2026, DEA Chief Administrative Law Judge Derek Julius stayed the pending proceeding on whether marijuana that remains in Schedule I should be transferred to Schedule III. The stay follows a motion by three parties opposing broader rescheduling. They asked to add a newly released report from the U.S. Government Accountability Office ("GAO"), Congress's independent auditing and oversight agency, to the administrative record and to allow additional briefing on its significance.
Judge Julius has not ruled that the GAO report undermines Schedule III, and GAO has not concluded that marijuana belongs in Schedule I. What GAO identified are gaps in the written policies and procedures that DEA and the Food and Drug Administration ("FDA") use to evaluate and schedule controlled substances. The timing is notable because those findings arrived after an 11-day hearing in which the government's methodology and evaluation process were already central points of dispute.
What Has Actually Been Paused?
The September 29 stay does not undo the federal government's April 2026 decision placing certain medical marijuana in Schedule III.
On April 22, 2026, Acting Attorney General Todd Blanche signed a final order moving two categories of marijuana from Schedule I to Schedule III:
marijuana contained in FDA-approved drug products; and
marijuana subject to a qualifying state medical marijuana license.
The order was published in the Federal Register on April 28 (91 Fed. Reg. 22714). It also created a DEA registration pathway for state-licensed medical marijuana businesses.
Marijuana outside those categories remains in Schedule I. Alongside the April order, the Justice Department launched a separate, expedited hearing to consider whether all remaining marijuana should also move to Schedule III. That broader proceeding is what Judge Julius has now stayed.
The hearing began June 29, 2026, and ran 11 days. The parties then filed post-hearing briefs, and the government asked Judge Julius to recommend transferring the remaining marijuana to Schedule III. His recommendation would not itself be a final rule, because the final decision rests with agency leadership. Even so, the case had reached a relatively late stage when the GAO report was released.
What This Means for Cannabis Operators
For operators, the key point is this: the pause in the broader rescheduling case does not pause the federal registration framework that already exists.
Under the April order, state medical marijuana licensees had 60 days from publication to apply for DEA registration. Businesses that applied within that window may continue operating in compliance with state law while their applications are pending. The order also calls for DEA to process those applications within six months. Federal registration is tied to the scope and continuing validity of the underlying state license.
For Oklahoma's OMMA licensees, who operate under a medical-only program, this is not abstract. A problem with a state license, such as a lapse, a compliance issue, or an ownership question, can now carry federal consequences, because DEA registration depends on valid state authority.
The uncertainty around broader rescheduling should not be mistaken for uncertainty about whether existing requirements matter. They do.
All of this costs money. Operators are paying attorneys and compliance professionals, reviewing security and recordkeeping systems, fixing state licensing issues, and preparing for federal oversight. A large multistate operator may be able to absorb those expenses. For a smaller operator, they can represent a meaningful share of annual revenue.
That is why the timing is frustrating. The federal government can pause the broader proceeding while it examines questions about its own scheduling process. Regulated businesses get no corresponding pause from their compliance obligations or their expenses..
What Did GAO Find?
On September 23, GAO released Drug Scheduling: While DEA Decisions Have Aligned with Recent HHS Recommendations, Both Need Comprehensive Policies (GAO-26-108623). The report reviewed federal drug-scheduling decisions from 2020 through 2025.
GAO found that DEA considered the Department of Health and Human Services' ("HHS") evaluations and recommendations for all 95 substances where they were required. DEA had issued final rules for 84 of those substances by the end of 2025, and its final decision matched HHS's recommendation every time. In other words, GAO did not find a system in which DEA routinely disregards HHS. Its concern was with the process the agencies use to reach those decisions.
Specifically, GAO found that DEA lacks comprehensive written policies identifying roles, responsibilities, and procedures for evaluating and scheduling controlled substances, and that FDA has similar gaps. GAO made three recommendations:
DEA should formalize its procedures for collecting and evaluating data, conducting its scheduling analyses, and making scheduling determinations.
FDA should establish procedures for its own evaluations and recommendations.
FDA and the National Institutes of Health should update the decades-old agreement governing their roles.
DEA and FDA agreed with the recommendations.
The findings matter here because of how closely they overlap with issues already being argued in the rescheduling hearing.
Why the Government’s Marijuana Review Was Already Being Questioned
A central issue in the hearing was how the government concluded that marijuana has a "currently accepted medical use." That question matters because Schedule I status is tied, among other criteria, to the absence of a currently accepted medical use in treatment in the United States.
Historically, DEA used a five-part test to decide whether a substance without FDA approval nevertheless had an accepted medical use. The test looked at factors such as known and reproducible chemistry, adequate safety studies, well-controlled studies showing efficacy, acceptance among qualified experts, and widely available scientific evidence.
HHS used a newer two-part approach when it evaluated marijuana. It asked whether marijuana is widely used for medical purposes by licensed practitioners under state-authorized programs, and whether there is credible scientific support for at least one of those uses. HHS concluded that marijuana has a currently accepted medical use and recommended Schedule III.
Opponents argue that the government reached a different result largely because it changed the test. The government maintains that the newer framework is legally sufficient. The distinction carries particular weight for marijuana, because unlike a standardized pharmaceutical, marijuana products vary widely in cannabinoid content, formulation, method of consumption, and chemical composition. Those are the attributes the older test's reproducible-chemistry factor was designed to address.
DEA's own eight-factor analysis was also at issue. Federal law requires consideration of eight factors in scheduling decisions, including abuse potential, current scientific knowledge, risk to public health, and dependence liability. HHS completed an eight-factor evaluation before recommending Schedule III, but hearing testimony raised a separate question about DEA's own analysis.
As reported by Cannabis Business Times, DEA pharmacologist Dr. Luli Akinfiresoye, testifying under subpoena, said DEA did not complete its own eight-factor analysis before the proposed rescheduling rule was published in May 2024: "Ideally, when we publish an NPRM, we also publish an eight-factor analysis. In this case, that did not happen because one was not done." She testified that DEA staff later prepared an unofficial analysis after identifying what she described as "gaps in data" in the proposed rule.
Six days before the stay, GAO independently recommended that DEA formalize procedures for conducting its scheduling analyses. That sequence does not establish that the proposed rule was unlawful, and GAO made no such finding. It does explain why the opposing parties believe the report is relevant enough to be considered before Judge Julius issues his recommendation.
Why Did Judge Julius Stay the Case?
The moving parties asked Judge Julius to (1) add the GAO report to the administrative record, (2) allow additional briefing on its significance, and (3) hold his recommended decision while those issues are resolved.
Judge Julius did not rule on the merits. He found that "if the record were to be extended to also include the GAO Report, a stay would be warranted to await briefing on it," and that a stay was also appropriate while he decides whether to admit the report at all.
DEA must respond by October 13, 2026, in a filing of no more than 20 pages. Other parties may respond but are not required to. No new date has been set for completing the broader proceeding.
What Happens Next?
The GAO report does not mean Schedule III is dead. GAO did not determine marijuana's appropriate schedule, invalidate HHS's medical-use analysis, reject the scientific evidence supporting medical use, or conclude that DEA violated federal law. Judge Julius has made none of those findings either.
The date to watch is October 13. After DEA responds, Judge Julius will decide whether the GAO report becomes part of the record and whether additional briefing is warranted. If he declines, the case returns to the recommended-decision stage. If he grants the motion, another round of briefing comes first. Either way, his eventual recommendation will not be the final word. The parties may file exceptions, and agency leadership makes the final decision.
For now, the federal landscape remains split. State-licensed medical marijuana and FDA-approved products covered by the April order are in Schedule III. Everything else remains in Schedule I. The proceeding that could close that gap is on hold.
For operators, the takeaway is simpler. Federal cannabis policy is arriving in pieces, and businesses have to comply with the pieces that already exist. State authorization and federal registration should both be taken seriously, especially now that a problem at the state level can become a problem at the federal level.
The government may take additional time to sort out the broader scheduling question. Cannabis businesses are still paying, and still complying, while it does.
This article is provided for informational purposes only and does not constitute legal advice. Federal and state cannabis laws and regulations continue to evolve, and businesses should consult qualified counsel regarding their specific licensing and compliance obligations.
