Apr. 25 at 3:50 PM
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Impact of Marijuana Rescheduling on California and New York Medical Cannabis Laws:
The April 23, 2026 DOJ order immediately placed state‑licensed medical cannabis in Schedule III of the Controlled Substances Act (CSA), while rescheduling all cannabis from Schedule I to Schedule III is under formal review. This change has significant but nuanced effects on California and New York’s medical cannabis programs.
Immediate Federal Effects:
End of Section 280E tax treatment: State‑licensed medical cannabis is no longer subject to the IRS’s 280E rule, which previously barred deductions for cannabis‑related expenses. This could allow operators to file amended returns or segregate deductible costs.
DEA registration: Operators can apply for DEA registration within 60 days to enable interstate transport between DEA‑registered facilities and research use.
Financial and operational benefits: Removal of 280E may improve creditworthiness, stock listing potential, and bankruptcy protection.
