What actually happens at the DEA's June 29 hearing.

The Justice Department already rescheduled medical cannabis. The June 29 hearing decides whether the rest of the market follows. A preview of the parties, the question in front of the judge, the timeline, and what each outcome does to operators.

The headline event in cannabis this spring has already happened. On April 23, 2026, Acting Attorney General Todd Blanche issued an order, effective April 28, that moved two categories of marijuana from Schedule I to Schedule III of the Controlled Substances Act: FDA-approved drug products containing marijuana, and marijuana regulated under a qualifying state medical license. Everything else, including all recreational cannabis sold under state adult-use licenses, stayed in Schedule I.

That order did not need a hearing. It rested on the Attorney General’s authority to reschedule substances to meet United States obligations under the Single Convention on Narcotic Drugs, a treaty-implementation route that sidestepped the administrative process entirely. The broader question, whether to move all marijuana to Schedule III, does need a hearing, and that hearing begins June 29. Understanding what it can and cannot do is the difference between reading the next two months correctly and reading them the way most coverage will.

How the process got here

The current proceeding is the second attempt at the same rulemaking. The Department of Health and Human Services recommended rescheduling marijuana to Schedule III in 2023, following President Biden’s October 2022 directive to review its status. The DEA published a Notice of Proposed Rulemaking on May 21, 2024, and set an administrative hearing to begin January 21, 2025. That hearing never happened. On January 13, 2025, the presiding administrative law judge, John Mulrooney, postponed it to resolve an interlocutory appeal brought by rescheduling proponents who challenged the DEA’s conduct in selecting witnesses. Mulrooney retired in August 2025, which left the DEA without an administrative law judge to hear the matter at all, and through early 2026 the proceeding sat still.

The December 18, 2025 executive order broke the stall by instructing the Attorney General to complete the rescheduling in the most expeditious manner allowed by law. The April 2026 order was the result: immediate rescheduling of the medical categories by treaty authority, withdrawal and termination of the stalled Biden-era proceedings, and a new, time-boxed hearing to decide the rest.

The mechanics of the hearing

The new hearing is docketed as DEA-1362. It begins at 9 a.m. Eastern on June 29, 2026, at the DEA Hearing Facility at 700 Army Navy Drive in Arlington, Virginia. The notice sets a firm end: the hearing will conclude no later than July 15, with a recess on July 3 and a resumption on July 6 around the Independence Day holiday. The presiding administrative law judge is to be designated by the Acting Attorney General, a notable detail given that the prior proceeding stalled in part over a judge’s handling of the process and that the agency had no sitting judge for the matter as recently as last year. Parties wishing to take part had to file a notice of intent to participate by May 28, 2026.

The participant list is where the substance will be. The hearing format allows interested persons to make their case: industry operators, anti-rescheduling advocacy organizations, research institutions, state regulators, and consumer groups. The National Organization for the Reform of Marijuana Laws has filed to participate as an interested person, arguing that consumers should be represented in a proceeding that has been dominated by industry and government. Who is granted standing, and who is excluded, shapes the record the judge builds.

What the hearing can and cannot do

The hearing can recommend moving all marijuana, recreational included, from Schedule I to Schedule III. That is its entire scope, and it is meaningful but limited. Schedule III is not legalization. It is the same status now held by the medical categories: federally controlled, available through approved channels, deductible for tax purposes, and open to research. A maximal outcome at the hearing still leaves marijuana a controlled substance.

What the hearing cannot do is deschedule. Removing marijuana from the Controlled Substances Act entirely, the thing most people mean by federal legalization, requires an act of Congress, through legislation such as the MORE Act or the Cannabis Administration and Opportunity Act, neither of which has passed. No administrative hearing can deliver that. So the ceiling on June 29 is Schedule III for the whole market, not legalization, and readers should discount any coverage that conflates the two.

What each outcome does to operators

The commercial stakes run through Section 280E of the tax code, which disallows ordinary business deductions for sellers of Schedule I and II substances. The April order already split the operating landscape into three groups. Operators working under a state medical license can now deduct ordinary expenses for that activity, moving their effective federal rate toward the standard corporate rate. Pure recreational operators under adult-use licenses cannot, and remain under the full 280E burden. Dual-license multi-state operators sit in between, facing a genuinely difficult problem of allocating shared expenses between their newly deductible medical lines and their still-disallowed recreational lines.

If the June 29 process ends in Schedule III for all marijuana, that three-way split collapses. The 280E relief now confined to medical activity would extend to adult-use operators, and the allocation problem for dual-license operators would dissolve because both sides of the business would be deductible. If the process stalls or produces a narrower outcome, the bifurcation persists, and the medical-versus-recreational distinction that the April order created becomes a durable feature of operator economics rather than a temporary one.

The realistic timeline

A hearing that concludes by mid-July produces a recommendation, not a rule. The administrative law judge issues findings, the DEA Administrator weighs them and moves toward a final rule, and a final rule of this consequence will almost certainly draw litigation. Legal challenges are also likely against the treaty-implementation theory the Acting Attorney General used to reschedule the medical categories in April, a theory that has not been tested in court at this scale. Schedule III for the entire market, in other words, is not a July event even if the hearing goes the industry’s way. It is the start of a rulemaking-and-litigation sequence that runs past 2026.

The clean way to hold all of this: the April order was the half of rescheduling that did not require a hearing, and it delivered real relief to a slice of the market. June 29 is the half that does require one, and it will be slower, contested, and capped at Schedule III. The two things worth watching as it opens are the participant list, which determines whose evidence reaches the record, and the challenges to the treaty authority, which could unsettle even the relief already granted.