Lawsuits Threaten to Derail Adult-Use Cannabis Rescheduling

Three separate lawsuits filed in federal court are putting the June 29, 2026, administrative hearing — the proceeding set to determine whether recreational cannabis follows medical cannabis out of Schedule I — under serious legal threat. State attorneys general, longstanding anti-legalization groups, and a pharmaceutical company that spent nearly a decade following federal rules now all want the hearing stopped, delayed, or restructured before it begins.

For adult-use operators, this is the proceeding that matters most. The order signed by Acting Attorney General Todd Blanche in late April 2026 moved state-licensed medical cannabis to Schedule III, but left recreational cannabis explicitly at Schedule I pending the outcome of the June 29 hearing. That hearing was supposed to settle the broader question. The accumulation of legal attacks is making the path forward considerably less certain.

Three Cases, Multiple Theories of Attack

The first challenge reached the U.S. Court of Appeals for the D.C. Circuit on May 22, 2026, when the attorneys general of Nebraska, Indiana, and Louisiana filed a petition arguing that the Blanche order exceeds the Attorney General’s authority, conflicts with U.S. obligations under international drug control treaties, and bypassed required administrative procedures. That case has since been consolidated with an earlier challenge brought by Smart Approaches to Marijuana and the National Drug and Alcohol Screening Association, represented by Torridon Law — the firm where former U.S. Attorney General William Barr is a partner.

A third coalition filed in the same court in late May with a broader set of targets. As MyCannabis has reported, those plaintiffs — including treatment service providers, an advocacy group for people harmed by cannabis industry expansion, two physicians, and biopharmaceutical company MMJ International Holdings — named President Trump, the DOJ, the DEA, Blanche, and DEA Administrator Terrance Cole as defendants. According to their filings, the order created a regulatory hybrid that Congress never authorized, failed to address documented health risks, and violated equal-protection principles by treating chemically identical products differently depending on whether they carry a state license or FDA approval. They are seeking a court order pausing the Blanche order and ultimately vacating it entirely.

The Pharma Pathway Problem

The third suit introduces an argument that cuts across conventional anti-legalization lines. MMJ International Holdings is not an advocacy group — it is a pharmaceutical company that has been developing FDA-authorized cannabinoid medicines since 2015. According to the company, it received an FDA orphan drug designation for a Huntington’s disease treatment in 2019, submitted a DEA bulk manufacturing authorization application in December 2018, and completed all required compliance steps, including DEA inspections. That application has reportedly remained unanswered for more than seven years.

The company’s legal position is that it followed the specific federal development pathway the government required of cannabinoid drug developers, at substantial cost, and is now watching state-market operators who bypassed that pathway receive immediate Schedule III relief ahead of them. MMJ has formally entered the June 29 proceeding as an “interested person,” filing six objections that include a constitutional challenge to the DEA’s ability to conduct valid rescheduling hearings at all. The company points to a string of recent Supreme Court decisions limiting federal agencies’ authority to serve simultaneously as rulemakers and adjudicators in their own proceedings — an argument that, if accepted, could halt the June 29 process before it produces a result.

“We followed the exact federal framework the government told cannabinoid developers was required,” said Duane Boise, MMJ’s chief executive. “Eight years later, the companies that complied with federal law are still waiting while the government increasingly rewards entities operating outside that same framework.”

Congress and the Tax Clock

Two additional pressures have landed on operators who were counting on rescheduling to deliver near-term relief.

Tax guidance on how the federal cannabis tax penalty applies to operators holding a single license that covers both medical and adult-use activity has not arrived, despite an announcement in April that it was forthcoming. On May 28, 2026, seven House Democrats led by Representatives Steven Horsford and Steve Cohen wrote to IRS CEO Frank Bisignano and Treasury Secretary Scott Bessent, calling for prompt guidance. As MyCannabis has reported, operators who overpaid taxes in prior years face a limited window to file refund claims — a deadline that runs on its own schedule regardless of when federal agencies issue clarification. Operators with dual-licensed facilities face the additional complication that the guidance’s absence leaves them unable to calculate their actual exposure under the new rules.

On Capitol Hill, the House Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies voted in late April to advance a fiscal-year 2027 spending bill containing language that would block federal officials from taking any further steps to reschedule cannabis. Similar riders have cleared committee before without becoming law, and the measure still faces the Senate. But alongside the active litigation — and the intra-GOP tension over how far the administration should go on rescheduling — it adds pressure to a process that is already moving through contested legal terrain.

The DEA hearing notice schedules proceedings through July 15, 2026, with a recess for the July 4th holiday. For adult-use operators, the relevant timeline now runs through the courts as much as through the DEA — and the number of parties positioned to seek a stay or challenge the outcome has grown substantially since April.