Cannabis Policy Developments 2026 — Federal and State Reform Updates

Executive Summary

Cannabis policy in 2026 represents a critical inflection point as federal rescheduling efforts collide with accelerating state-level legalization and evolving regulatory frameworks. As of May 2026, the United States stands at a crossroads where the Drug Enforcement Administration's proposed reclassification of cannabis from Schedule I to Schedule III under the Controlled Substances Act continues to work through administrative review, while individual states pursue independent pathways toward adult-use and medical cannabis programs. This dual-track evolution creates unprecedented complexity for operators, patients, and policymakers navigating a landscape where 38 states have legalized medical cannabis and 24 states permit adult-use sales, yet federal prohibition technically remains in effect.

The policy developments of 2026 carry profound implications for the $33 billion U.S. cannabis market. Federal rescheduling would fundamentally alter tax treatment under Internal Revenue Code Section 280E, potentially saving multi-state operators hundreds of millions in annual tax liability. Simultaneously, state legislatures from Kentucky to Nebraska are advancing legalization bills that could add tens of millions of new consumers to legal markets. Banking access, interstate commerce, research opportunities, and criminal justice reform all hinge on decisions being made in federal agencies and state capitols throughout this pivotal year.

Why This Matters

The cannabis policy landscape of 2026 directly impacts millions of patients, thousands of businesses, and the fundamental structure of American drug policy. For the estimated 6 million registered medical cannabis patients nationwide, federal rescheduling could expand research into therapeutic applications, improve insurance coverage prospects, and reduce stigma. For the more than 400,000 Americans employed in state-legal cannabis businesses, policy clarity determines job security and industry growth trajectories.

The financial stakes are extraordinary. Cannabis operators currently pay effective federal tax rates exceeding 70% due to Section 280E of the Internal Revenue Code, which prohibits businesses trafficking in Schedule I or II controlled substances from deducting ordinary business expenses. Rescheduling to Schedule III would eliminate this burden, potentially freeing $1.8 billion annually in capital for reinvestment, according to industry analysts. Multi-state operators including Curaleaf, Trulieve, and Green Thumb Industries have publicly stated that 280E relief represents their single most important policy priority.

Beyond economics, cannabis policy developments in 2026 carry profound social justice implications. An estimated 40,000 Americans remain incarcerated for cannabis offenses, with hundreds of thousands more carrying conviction records that impair employment and housing opportunities. State-level legalization efforts increasingly incorporate expungement provisions and social equity licensing programs designed to repair harms from decades of prohibition enforcement that disproportionately targeted communities of color.

The regulatory framework established in 2026 will shape industry structure for decades. Decisions about interstate commerce, potency limits, testing standards, and licensing caps determine whether cannabis markets consolidate under corporate control or maintain opportunities for small businesses and craft cultivators. Public health outcomes—from youth access prevention to impaired driving enforcement—depend on evidence-based policy design informed by data from early-adopter states.

Background and History: The Path to 2026

Cannabis policy in 2026 represents the culmination of nearly a century of federal prohibition punctuated by five decades of state-level reform. Understanding current developments requires examining the full arc from criminalization through the modern legalization movement.

Federal Prohibition Era (1937-1996)

The Marihuana Tax Act of 1937 established the first federal restrictions on cannabis, imposing prohibitive taxes and registration requirements. This framework gave way to outright criminalization with the Controlled Substances Act of 1970, which designated cannabis as a Schedule I substance—defined as having no accepted medical use and high potential for abuse. President Richard Nixon's administration established this classification over the objection of the Shafer Commission, which recommended decriminalization.

The 1970s and 1980s saw escalating enforcement under the War on Drugs. Annual cannabis arrests grew from approximately 100,000 in 1965 to more than 400,000 by 1990. Mandatory minimum sentences introduced through the Anti-Drug Abuse Act of 1986 resulted in decades-long federal prison terms for cultivation and distribution offenses. By 1996, the United States incarcerated more individuals for drug offenses than the entire prison population of 1980.

Medical Cannabis Movement (1996-2012)

California's Proposition 215, approved by voters in November 1996, created the first state-legal medical cannabis program in defiance of federal law. The Compassionate Use Act permitted patients with physician recommendations to possess and cultivate cannabis for conditions including cancer, AIDS, and chronic pain. Seven additional states enacted medical programs by 2000, establishing the state-federal conflict that persists today.

The federal response was aggressive. The Department of Justice under President Bill Clinton announced it would prosecute physicians who recommended cannabis and revoke their DEA registration to prescribe controlled substances. The Ninth Circuit Court of Appeals struck down this policy in Conant v. Walters (2002), ruling that physician recommendations constituted protected speech under the First Amendment.

The Supreme Court addressed federalism questions in Gonzales v. Raich (2005), ruling that the federal government retained authority under the Commerce Clause to prosecute individuals growing cannabis for personal medical use even in states where such activity was legal. Justice John Paul Stevens wrote for the 6-3 majority that homegrown cannabis substantially affected interstate commerce in the aggregate, bringing it within federal regulatory power under Wickard v. Filburn (1942).

Despite this legal setback, medical cannabis programs expanded. The Obama administration issued the Ogden Memo in 2009, directing federal prosecutors not to prioritize enforcement against individuals in "clear and unambiguous compliance" with state medical cannabis laws. By 2012, 18 states and the District of Columbia had enacted medical programs serving approximately 800,000 registered patients.

Adult-Use Legalization (2012-2020)

The modern adult-use era began on November 6, 2012, when voters in Colorado and Washington approved ballot initiatives legalizing cannabis for adults 21 and older. Colorado's Amendment 64 and Washington's Initiative 502 created the first regulated systems for cultivation, processing, and retail sales to any adult, not just medical patients.

The federal response evolved under President Barack Obama. Deputy Attorney General James Cole issued guidance in August 2013—known as the Cole Memo—establishing eight enforcement priorities including preventing distribution to minors, preventing revenue from going to criminal enterprises, and preventing drugged driving. The memo indicated that states with "strong and effective regulatory and enforcement systems" would not be federal enforcement priorities.

This détente enabled rapid expansion. Alaska, Oregon, and the District of Columbia legalized in 2014. California, Massachusetts, Maine, and Nevada followed in 2016. By January 2018, California—the world's fifth-largest economy—launched adult-use sales, creating the largest legal cannabis market on Earth with projected annual revenues exceeding $7 billion.

The policy landscape shifted abruptly when Attorney General Jeff Sessions rescinded the Cole Memo in January 2018, returning to a policy of full federal enforcement discretion. However, congressional appropriations riders—specifically the Rohrabacher-Farr Amendment, later renamed Rohrabacher-Blumenauer—prohibited the Department of Justice from using funds to interfere with state medical cannabis programs. These protections, renewed in successive appropriations bills, created a patchwork of federal tolerance.

By 2020, 15 states had legalized adult use and 36 states permitted medical cannabis. The legal market generated $17.5 billion in sales, employed more than 320,000 workers, and collected $3.1 billion in state and local tax revenue. Yet federal prohibition remained unchanged, creating banking access problems, tax inequities, and research restrictions.

Federal Rescheduling Process (2022-2026)

President Joe Biden initiated the current rescheduling effort on October 6, 2022, when he directed Secretary of Health and Human Services Xavier Becerra and Attorney General Merrick Garland to review cannabis scheduling "expeditiously." This marked the first time a sitting president formally requested administrative rescheduling under the Controlled Substances Act.

The Department of Health and Human Services completed its scientific review in August 2023, recommending that the DEA reclassify cannabis from Schedule I to Schedule III. The recommendation, based on an eight-factor analysis required by 21 U.S.C. § 811(c), concluded that cannabis has accepted medical use in treatment and lower abuse potential than Schedule I or II substances. HHS specifically cited FDA-approved cannabinoid medications, widespread state medical programs, and comparative harm data.

The DEA published a Notice of Proposed Rulemaking in the Federal Register on May 16, 2024, formally proposing to reschedule cannabis to Schedule III alongside substances like ketamine, anabolic steroids, and Tylenol with codeine. The NPRM opened a 60-day public comment period that generated more than 43,000 submissions—the largest response in DEA rulemaking history. Comments ranged from medical associations supporting rescheduling based on therapeutic evidence to law enforcement organizations opposing any relaxation of controls.

Following the comment period, the DEA convened administrative law judge hearings beginning in November 2024. These proceedings, required under the Administrative Procedure Act for significant rulemaking, allowed stakeholders to present evidence and cross-examine witnesses. Participants included the National Organization for the Reform of Marijuana Laws, Smart Approaches to Marijuana, the American Medical Association, and representatives from state regulatory agencies in Colorado, California, and Massachusetts.

As of May 2026, the rescheduling process remains in administrative review. The DEA must consider the ALJ's recommendations, finalize the rule, and publish it in the Federal Register before it takes effect. Legal challenges are anticipated regardless of the outcome, potentially extending the timeline by months or years as courts review the agency's decision under the arbitrary-and-capricious standard of the Administrative Procedure Act.

Key Players in 2026 Policy Developments

Drug Enforcement Administration

The DEA holds sole authority to reschedule controlled substances, making it the most critical federal actor in 2026 cannabis policy. Administrator Anne Milgram oversees the rescheduling review, balancing the HHS scientific recommendation against law enforcement concerns and international treaty obligations. The agency's decision will determine whether cannabis remains in Schedule I, moves to Schedule III as HHS recommended, or receives some alternative classification. DEA leadership has emphasized that rescheduling would not legalize cannabis but would acknowledge medical utility and adjust regulatory controls.

Department of Health and Human Services

HHS, through the Food and Drug Administration, conducted the scientific and medical evaluation that recommended Schedule III classification. FDA Commissioner Robert Califf has stated that the recommendation was based on rigorous analysis of clinical evidence, epidemiological data, and international scientific literature. The department's position carries significant weight in administrative proceedings, though the DEA is not legally bound to follow HHS recommendations. FDA continues to regulate cannabis-derived pharmaceuticals including Epidiolex, the CBD-based epilepsy medication approved in 2018.

Multi-State Operators

Publicly traded cannabis companies including Curaleaf Holdings, Trulieve Cannabis, Green Thumb Industries, and Verano Holdings represent the industry's corporate tier. These MSOs operate dozens of dispensaries across multiple states, generating combined annual revenues exceeding $8 billion. Their primary policy focus is Section 280E tax relief, which rescheduling to Schedule III would provide. According to Curaleaf's 2025 annual report, the company paid $187 million in federal taxes that would have been deductible absent 280E restrictions. MSOs have invested heavily in lobbying, contributing more than $4.2 million to federal candidates in the 2024 election cycle.

National Organization for the Reform of Marijuana Laws

NORML, founded in 1970, advocates for full federal legalization rather than rescheduling. The organization argues that Schedule III classification perpetuates criminal penalties, maintains federal prohibition, and fails to address social justice concerns. NORML supports the Cannabis Administration and Opportunity Act, legislation that would deschedule cannabis entirely and establish a federal regulatory framework similar to alcohol. The organization submitted detailed comments during the DEA rescheduling process emphasizing that half-measures preserve inequities.

State Regulatory Agencies

Cannabis control boards in California, Colorado, Washington, and other legalization states operate sophisticated regulatory systems governing everything from pesticide testing to packaging requirements. These agencies possess operational expertise that federal regulators lack. The California Department of Cannabis Control, which oversees the nation's largest legal market with more than 1,200 licensed retailers, has advocated for federal policies that preserve state regulatory authority and prevent preemption. Colorado's Marijuana Enforcement Division has operated since 2014, providing a decade of data on effective regulatory practices.

Smart Approaches to Marijuana

SAM, founded by former Representative Patrick Kennedy, opposes legalization and rescheduling based on public health concerns. The organization argues that increased cannabis potency—with THC concentrations in some products exceeding 90%—poses risks including cannabis use disorder, impaired driving, and mental health impacts particularly among adolescents. SAM advocates for maintaining Schedule I classification and strengthening enforcement. The organization submitted extensive comments during the DEA process citing studies linking high-potency cannabis to psychosis risk.

Legal and Regulatory Framework

Cannabis policy in 2026 operates within a complex web of federal statutes, international treaties, and state constitutional provisions that create jurisdictional conflicts and compliance challenges.

The Controlled Substances Act, codified at 21 U.S.C. § 801 et seq., establishes the federal scheduling system. Section 812 defines five schedules based on abuse potential, accepted medical use, and safety under medical supervision. Schedule I substances must have high abuse potential, no accepted medical use, and lack of accepted safety for use under medical supervision. Cannabis currently occupies Schedule I alongside heroin, LSD, and MDMA. Schedule III substances—the proposed new classification—have accepted medical uses and moderate-to-low physical dependence potential.

The rescheduling process follows procedures in 21 U.S.C. § 811, which requires the Attorney General (acting through the DEA) to consider eight factors including scientific evidence, history and current pattern of abuse, scope and significance of abuse, and risk to public health. The statute mandates that HHS's scientific and medical evaluation be binding on the DEA regarding scientific and medical matters. However, the DEA retains authority to consider law enforcement factors and international treaty obligations.

Section 280E of the Internal Revenue Code, enacted in 1982, prohibits businesses from deducting ordinary expenses if they traffic in Schedule I or II controlled substances. The provision, upheld in Olive v. Commissioner (2015) and numerous subsequent cases, requires cannabis businesses to calculate taxable income without deductions for rent, payroll, marketing, or other standard business expenses. Only cost of goods sold—direct cultivation and production costs—may be deducted. Rescheduling to Schedule III would eliminate 280E application, as the statute applies only to Schedule I and II substances.

The Single Convention on Narcotic Drugs of 1961, to which the United States is a signatory, requires parties to limit cannabis to medical and scientific purposes. The treaty's scheduling system places cannabis in Schedule I and Schedule IV—the most restrictive categories. The U.S. State Department has argued that domestic rescheduling to Schedule III remains consistent with treaty obligations, as the international and domestic scheduling systems operate independently. However, some legal scholars contend that state-legal adult-use programs violate treaty commitments regardless of domestic scheduling.

The Rohrabacher-Blumenauer Amendment, included in annual appropriations bills since 2014, prohibits the Department of Justice from using funds to prevent states from "implementing their own laws that authorize the use, distribution, possession, or cultivation of medical marijuana." Federal courts have interpreted this narrowly in United States v. McIntosh (2016), holding that it protects only individuals in strict compliance with state medical programs, not recreational markets or those violating state regulations.

The SAFE Banking Act, which has passed the House of Representatives multiple times but stalled in the Senate, would prohibit federal banking regulators from penalizing financial institutions that serve state-legal cannabis businesses. Without this protection, most banks refuse cannabis accounts due to concerns about money laundering charges under 18 U.S.C. § 1956, which defines proceeds from Schedule I drug trafficking as criminal proceeds. The legislation would create a safe harbor, enabling normal banking access for payroll, tax payments, and business operations.

State-by-State Policy Landscape

As of May 2026, cannabis policy varies dramatically across the 50 states, creating a patchwork of legal frameworks that operators and consumers must navigate.

California

California operates the nation's largest cannabis market under the Medicinal and Adult-Use Cannabis Regulation and Safety Act. The state permits adults 21 and older to possess up to one ounce of flower and eight grams of concentrate, and to cultivate six plants for personal use. The Department of Cannabis Control licenses approximately 1,200 retailers, 800 cultivators, and 400 manufacturers. The state collected $1.1 billion in cannabis tax revenue in fiscal year 2025, though black market sales continue to exceed legal sales by an estimated 2-to-1 ratio due to high taxes and regulatory costs.

New York

New York legalized adult use through the Marijuana Regulation and Taxation Act in March 2021, with retail sales beginning in December 2022. The state's licensing system prioritizes social equity applicants—individuals from communities disproportionately impacted by prohibition enforcement or those with prior cannabis convictions. As of May 2026, New York has issued approximately 300 retail licenses, with the Office of Cannabis Management projecting the market will reach $1.3 billion in annual sales by year-end. Possession limits are three ounces of flower and 24 grams of concentrate.

Texas

Texas maintains one of the nation's most restrictive medical programs, limited to patients with intractable epilepsy, terminal cancer, or PTSD. The Compassionate Use Program permits only low-THC cannabis products containing no more than 1% THC by weight. Possession of any amount of cannabis outside the medical program remains a criminal offense, with penalties ranging from Class B misdemeanor for under two ounces to felony charges for larger quantities. Legislative efforts to expand the medical program or decriminalize possession have repeatedly failed in the Republican-controlled legislature.

Florida

Florida operates a medical-only program serving more than 800,000 registered patients—the second-largest patient population nationally after California. The state's vertical integration requirement mandates that licensed operators control cultivation, processing, and retail, creating high barriers to entry. A constitutional amendment to legalize adult use appeared on the November 2024 ballot but failed to achieve the required 60% supermajority, receiving 57% support. Trulieve Cannabis, Florida's dominant operator with more than 150 dispensaries, spent $75 million supporting the initiative.

Ohio

Ohio voters approved adult-use legalization through Issue 2 in November 2023, with sales beginning in August 2024. The state permits adults 21 and older to possess up to 2.5 ounces and cultivate six plants (12 per household). The Division of Cannabis Control has issued approximately 130 dual-use licenses allowing existing medical dispensaries to serve adult-use customers. First-year adult-use sales exceeded $850 million, with the state collecting $127 million in excise tax revenue at the 10% rate established by the ballot measure.

Kentucky

Kentucky enacted medical cannabis legislation in March 2023, with the program scheduled to launch in January 2025. However, regulatory delays have pushed implementation into 2026. The program will permit patients with qualifying conditions including cancer, chronic pain, and PTSD to purchase cannabis from licensed dispensaries. The state will not permit home cultivation. Kentucky represents a significant shift in southern cannabis policy, as one of the first traditionally conservative states to embrace comprehensive medical access.

Nebraska

Nebraska voters will decide on medical cannabis legalization in November 2026 through a citizen-initiated ballot measure. The proposal would permit patients with debilitating medical conditions to possess up to five ounces and purchase from licensed dispensaries. Nebraska currently imposes criminal penalties for any cannabis possession, with first-offense possession of under one ounce classified as an infraction carrying a $300 fine. The state remains one of 12 without any legal cannabis access program.

Market and Business Implications

Federal rescheduling and state-level legalization in 2026 will reshape cannabis industry economics, capital access, and competitive dynamics.

Section 280E tax relief represents the most immediate financial impact of rescheduling. Cannabis operators currently pay effective federal tax rates of 70% or higher because they cannot deduct ordinary business expenses. A typical dispensary with $5 million in revenue, $3 million in cost of goods sold, and $1.5 million in operating expenses would owe federal tax on $2 million of income under current law (revenue minus COGS only). After rescheduling, taxable income would drop to $500,000 (revenue minus COGS and operating expenses), reducing federal tax liability by approximately $315,000 annually at the 21% corporate rate.

Aggregate industry savings could exceed $1.8 billion annually. Green Thumb Industries reported $1.1 billion in revenue for 2025 and estimated that 280E relief would improve EBITDA margins by 8-10 percentage points. Curaleaf projected that rescheduling would generate $150-200 million in annual tax savings that could fund expansion into new markets and capital improvements. Smaller operators face even higher effective tax rates due to limited ability to maximize COGS deductions, making relief particularly impactful for craft cultivators and independent retailers.

Banking access remains constrained despite policy evolution. Fewer than 800 of the nation's 4,800 federally insured banks and credit unions serve cannabis clients, according to Financial Crimes Enforcement Network data. Most operators rely on credit unions or small regional banks that charge premium fees—typically 2-3% of deposits—to offset compliance costs and perceived risk. Without SAFE Banking Act passage, rescheduling alone will not resolve banking access, as cannabis remains federally prohibited even in Schedule III.

Capital markets could see significant shifts. U.S. institutional investors including mutual funds and pension funds are largely prohibited from investing in companies that violate federal law, limiting cannabis operators to Canadian exchanges, over-the-counter markets, and private capital. Rescheduling may not immediately change this calculus, as cultivation and distribution would remain federally illegal even for Schedule III substances without proper DEA registration. However, reduced legal risk could attract institutional capital to ancillary businesses including real estate investment trusts, technology providers, and testing laboratories.

Interstate commerce remains prohibited under current law, forcing operators to establish cultivation and processing in each state where they operate. This creates inefficiencies and prevents economies of scale. Some legal scholars argue that rescheduling to Schedule III could enable interstate commerce in cannabis, as Schedule III substances may be distributed across state lines by DEA-registered entities. However, the DEA has indicated that state-legal cannabis businesses would not qualify for such registration, maintaining the state-by-state framework.

Wholesale pricing continues to compress in mature markets. In Colorado, wholesale flower prices declined from $1,800 per pound in 2015 to approximately $600 per pound in 2026, driven by oversupply and competition. California has seen similar trends, with outdoor-grown flower trading below $500 per pound—often below production costs for small farmers. This commoditization favors large-scale operators with vertical integration and economies of scale, while squeezing craft cultivators and independent processors.

What Experts Say

Medical researchers emphasize that rescheduling would facilitate clinical trials and expand the evidence base for therapeutic applications. According to the National Academies of Sciences, Engineering, and Medicine, current Schedule I classification creates regulatory barriers that limit research into cannabis effects on chronic pain, PTSD, and other conditions. Dr. Nora Volkow, director of the National Institute on Drug Abuse, has stated that rescheduling would simplify research protocols and enable larger-scale studies, though she has also emphasized the need for continued investigation into potential harms including cognitive impacts and addiction risk.

Tax policy experts note that 280E relief would level the playing field between legal and illicit markets. Pat Oglesby, a former tax counsel to the Senate Finance Committee who now studies cannabis taxation, has explained that excessive tax burdens drive consumers to unlicensed sellers who offer lower prices. He argues that federal tax normalization combined with state excise tax rates below 20% would optimize revenue collection while minimizing black market incentives.

Constitutional law scholars debate federalism implications. Professor Robert Mikos of Vanderbilt Law School, author of "Marijuana Law, Policy, and Authority," has written that the Controlled Substances Act permits federal enforcement regardless of state legalization, but that practical constraints limit DEA capacity to prosecute the millions of state-legal transactions occurring annually. He suggests that rescheduling represents incremental progress but that comprehensive reform requires congressional action to deschedule cannabis entirely or create a federal regulatory framework.

Social equity advocates stress that rescheduling alone does not address criminal justice reform. Maritza Perez, director of the Drug Policy Alliance's Office of National Affairs, has argued that policy changes must include expungement of prior convictions, release of incarcerated individuals, and reinvestment in communities harmed by prohibition. She notes that rescheduling benefits corporate operators through tax relief but does little for the estimated 40,000 people imprisoned for cannabis offenses or the hundreds of thousands with conviction records.

Industry analysts project continued market growth regardless of federal policy. Cowen & Company forecasts that U.S. cannabis sales will reach $45 billion by 2028, driven by state-level legalization in populous states and maturation of existing markets. However, analysts note that federal reform could accelerate growth by reducing capital costs, enabling institutional investment, and improving operational efficiency through interstate commerce and normalized banking.

What's Next: Key Decision Points and Scenarios

Cannabis policy in 2026 faces several critical decision points that will determine the trajectory of reform through the remainder of the decade.

The DEA rescheduling decision represents the most immediate catalyst. The agency must issue a final rule following completion of administrative law judge hearings and review of the record. Legal experts anticipate a decision by late 2026 or early 2027, though litigation could extend implementation. If the DEA adopts Schedule III classification as HHS recommended, the rule would take effect 30 days after Federal Register publication, immediately eliminating 280E tax burdens for the 2027 tax year.

Alternative scenarios include the DEA rejecting rescheduling and maintaining Schedule I classification, or adopting a compromise position such as Schedule II. Schedule II would acknowledge medical utility but maintain the highest restrictions on prescribing and distribution, similar to opioids and cocaine. This outcome would preserve some research barriers while still providing 280E relief. However, most observers consider Schedule III the most likely outcome given the strength of the HHS scientific recommendation.

Congressional action remains possible but uncertain. The Cannabis Administration and Opportunity Act, introduced by Senate Majority Leader Chuck Schumer, would deschedule cannabis entirely and establish a federal regulatory framework with a 10% excise tax. The legislation includes expungement provisions and social equity programs but faces opposition from Republicans and moderate Democrats concerned about public health impacts. Passage would require 60 votes in the Senate to overcome a filibuster—a threshold that appears unattainable in the current political environment.

The SAFE Banking Act represents a more achievable legislative goal. The bill has passed the House seven times with bipartisan support but stalled in the Senate due to demands from progressive Democrats that banking reform be paired with criminal justice provisions. A standalone banking bill could pass if leadership prioritizes it, though the legislative calendar for 2026 is crowded with appropriations, tax policy, and other priorities.

State-level legalization will continue regardless of federal action. Ballot initiatives for adult-use legalization are expected in Nebraska, North Dakota, and potentially Arkansas in November 2026. Legislative efforts are underway in Pennsylvania, Minnesota, and Wisconsin, though Republican opposition in state legislatures may prevent passage. By 2028, industry analysts project that 30 states will permit adult use, representing more than 75% of the U.S. population.

International developments may influence U.S. policy. Germany launched adult-use legalization in April 2024, creating the largest legal market in Europe. Canada, which legalized nationally in 2018, has generated more than $15 billion in cumulative sales and collected $4.5 billion in tax revenue. These international examples provide data on regulatory approaches, public health outcomes, and economic impacts that inform U.S. policy debates.

Research expansion will accelerate regardless of scheduling. The FDA approved additional cannabis-derived pharmaceuticals for clinical trials in 2025, including formulations targeting chronic pain and anxiety disorders. The National Institutes of Health allocated $180 million for cannabis research in fiscal year 2026, funding studies on therapeutic applications, addiction risk, and long-term health effects. This evidence base will inform future policy decisions at both federal and state levels.

Further Reading

• Drug Enforcement Administration Notice of Proposed Rulemaking on Cannabis Rescheduling: https://www.federalregister.gov/documents/2024/05/16/2024-10586/schedules-of-controlled-substances-rescheduling-of-marijuana
• Department of Health and Human Services Recommendation to DEA on Cannabis Scheduling: https://www.hhs.gov/about/news/2023/08/29/hhs-recommends-rescheduling-marijuana.html
• Controlled Substances Act, 21 U.S.C. § 801 et seq.: https://www.govinfo.gov/content/pkg/USCODE-2021-title21/pdf/USCODE-2021-title21-chap13.pdf
• Internal Revenue Code Section 280E: https://www.law.cornell.edu/uscode/text/26/280E
• National Conference of State Legislatures Cannabis Policy Overview: https://www.ncsl.org/health/state-medical-cannabis-laws
• Congressional Research Service Report on Federal Cannabis Policy: https://crsreports.congress.gov/product/pdf/R/R44782
• Marijuana Policy Project State-by-State Laws: https://www.mpp.org/states/
• NORML Legal Issues and Pending Legislation: https://norml.org/laws/
• Gonzales v. Raich, 545 U.S. 1 (2005): https://supreme.justia.com/cases/federal/us/545/1/
• National Academies Report on Health Effects of Cannabis and Cannabinoids: https://nap.nationalacademies.org/catalog/24625/the-health-effects-of-cannabis-and-cannabinoids