The Department of Justice issued an order on April 22, 2026, immediately rescheduling FDA-approved marijuana products and state-licensed medical marijuana from Schedule I to Schedule III, which means that:
- The IRC §280E limitations on cannabis businesses no longer apply; and
- Taxpayers can now claim a medical expense deduction for marijuana.
The order is available at:
www.justice.gov/opa/media/1437441/dl
The order follows President Trump’s December 18, 2025, executive order directing expedited completion of the cannabis rescheduling.
It’s important to note that the DOJ’s order does not legalize recreational use at the federal level, override state laws, or end all restrictions. This order also does not reclassify recreational cannabis as a Schedule III drug, which means the IRC §280E limitations still apply and these items do not qualify for medical expense deductions.
However, the Department is expediting the ongoing rulemaking process to fully remove marijuana from Schedule I and place it into Schedule III and will hold an administrative hearing on this issue beginning June 29, 2026.
In the meantime, we assume that taxpayers will be able to begin claiming medical marijuana business expenses and medical expense deductions as of April 22, 2026, but we await IRS guidance to confirm. We will continue to update you as news develops.
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