Politics
What Will Marijuana Rescheduling Mean For Hemp, Which Is Already Fully Descheduled? (Op-Ed)
“Increased acceptance and understanding could drive greater consumer demand and foster more mainstream integration of hemp-derived products into appropriate regulated frameworks.”
By Shawn Hauser, Vicente LLP
The Drug Enforcement Administration’s (DEA) pending reclassification of marijuana from Schedule I to Schedule III of the Controlled Substances Act (CSA) marks a historic and long-overdue milestone in U.S. cannabis policy. This shift acknowledges marijuana’s accepted medical use and relatively low potential for abuse, standing as a testament to decades of persistent advocacy and evolving scientific understanding
This reclassification also reveals a critical distinction in the federal cannabis landscape: marijuana is striving to reach a less restrictive status, while hemp has already achieved an unscheduled one. Similar commercial THC products are derived from both sources of cannabis, yet their regulatory frameworks and persistent federal challenges remain distinct.
To fully grasp the potential impacts of rescheduling, it is crucial to recognize that while both marijuana and hemp are derived from the Cannabis sativa L. plant, their federal legal statuses differ significantly—with marijuana currently completing the complex process to achieve a less restrictive scheduled status—while hemp is already federally unscheduled (a result of congressional action in the 2018 Farm Bill).
This means some cannabis “hemp” is already unscheduled and not subject to the restrictive provisions of the CSA at all. Rather, hemp operates under a fundamentally distinct legal framework established by the 2018 Farm Bill. This landmark law federally legalized hemp plants and their derivatives as an agricultural crop (rather than a controlled substance), defining hemp plants as cannabis with less than 0.3 percent delta-9 THC on a dry weight basis.
Does the DEA’s Marijuana Rescheduling Affect Hemp’s Legal Status?
The DEA’s proposed marijuana rescheduling rule expressly states that it will not affect hemp’s existing federal legal status under the 2018 Farm Bill. It also does not impact the legal status of THC-containing drugs already rescheduled out of Schedule I, such as Marinol or Syndros, nor does it impact the Schedule I status of “previously scheduled synthetic cannabinoids.”
In short, moving marijuana to Schedule III does not automatically alter the existing federal legal or regulatory framework for hemp. Hemp cultivation, processing, and sales will continue to be regulated by their own specific federal and state regulations, independent of marijuana’s new classification.
However, there are some direct and indirect impacts worth noting.
What Are the Direct Legal Differences Between Marijuana and Hemp Under Rescheduling?
1. Marijuana Remains Controlled by DEA, Hemp Remains Unscheduled
Despite a move to Schedule III, state-legal marijuana dispensaries and their products will remain federally illegal because Schedule III marijuana products still require Food and Drug Administration (FDA) approval for lawful interstate commerce. To date, FDA has approved only one cannabis-derived drug (Epidiolex) and three synthetic cannabinoid-based drugs for specific conditions.
Hemp, on the other hand, is already descheduled and commonly sold in interstate commerce as a legal agricultural commodity rather than a controlled substance. Despite their different CSA statuses, both hemp and marijuana THC products, even if rescheduled, face legal risk under the Federal Food, Drug, and Cosmetic Act (FDCA), which governs the sale of food, drugs, and cosmetics in interstate commerce.
The cannabis industry has largely operated under FDA’s implied risk-based enforcement policy for over a decade, under which FDA has not enforced the FDCA against state-compliant operators and has focused primarily on companies making “egregious medical claims” or posing severe public safety issues with unapproved products.
2. FDA Illegality for Marijuana and Hemp: Why Congressional Action Is Still Needed
The FDA has clearly indicated that its existing food and drug regulatory framework is not sufficient for comprehensive cannabinoid regulation and has consistently stated that it needs congressional action to appropriately regulate cannabis. For over a decade, the agency has shown a lack of intent to deploy its resources toward mass enforcement in the cannabis sector.
This reinforces that the immediate threat for both hemp and marijuana isn’t from the FDA shutting down state programs, but from the lack of a clear federal regulatory framework.
While a Congressional Research Service report emphasizes that hemp-derived CBD might be permitted as a tobacco additive if marijuana is rescheduled and a company pursued this pathway, such products would still be subject to FDA marketing authorization and public health assessments. The FDA is clear that it doesn’t believe its food and drug regulatory framework is sufficient for cannabinoid regulation, and has consistently indicated that it needs congressional action to appropriately regulate cannabis.
Some proposed federal regulatory frameworks consider the involvement of other agencies, such as the Alcohol and Tobacco Tax and Trade Bureau (TTB), in coordination with FDA, as the appropriate regulatory agency.
3. Synthetic THC remains a Schedule 1 Controlled Substance, but the Definition Remains Unclear.
The proposed rule clarifies that synthetically derived THCs (e.g., delta-10-tetrahydrocannabinol) are explicitly excluded from marijuana’s reclassification and remain Schedule I controlled substances. Although the law is clear, and DEA has repeatedly opined that certain synthetic cannabinoids not occurring naturally in the hemp plant are Schedule I substances, the definition of “synthetic” is not detailed in the CSA and is likely to continue to be debated and litigated.
The lack of a clear federal definition has forced states to implement their own “patchwork” of regulations and prohibitions, and many state laws are unclear. Establishing safe and regulated production of THC and other cannabinoids produced through synthesis and conversion is a fundamental issue that must be imminently addressed to ensure public safety.
4. Marijuana Extract Definition: A Potential Concern for Hemp Derivatives
The DEA’s proposed rule broadly defines “Marijuana Extract” as derived from “any plant of the genus Cannabis” containing greater than 0.3 percent delta-9 THC, “without explicitly exempting hemp-derived extracts.
This broad language could potentially bring hemp products that inevitably exceed the 0.3 percent limit during intermediate processing into the DEA’s purview, even if the final product is compliant. Clarifying legal protections for “Work in Progress” (WIP) materials remains a longstanding need.
What Are the Indirect Impacts of Marijuana Rescheduling on the Hemp Industry?
While the direct legal changes for hemp are minimal, marijuana rescheduling is expected to indirectly generate a positive impact and broader momentum for the entire cannabis sector. These could ultimately benefit the hemp industry and progress towards effective federal regulation for cannabinoid products.
Enhanced Legitimacy and Public Perception
By moving cannabis out of Schedule I, where it is ludicrously classified as one of the most dangerous and highly abused drugs without any medical use, the federal government officially recognizes its medical utility and lower potential for abuse. This legitimization could be transformative for the medical community and broader public opinion, chipping away at the stubborn stigma associated with all forms of cannabis.
The federal government’s acknowledgment of marijuana’s medical use is also reflected in recent congressional support for allowing physicians affiliated with the Department of Veterans Affairs to recommend medical cannabis to qualified patients in regulated jurisdictions.
Increased acceptance and understanding could drive greater consumer demand and foster more mainstream integration of hemp-derived products into appropriate regulated frameworks.
Increased Capital and Investment in Cannabis
The removal of Internal Revenue Code Section 280E for marijuana businesses will free up substantial capital and improve investor sentiment across the cannabis sector. This anticipated influx of investment and a favorable shift in risk analysis can indirectly benefit the hemp industry and empower a unified push for federal legalization. It can also empower investment in research.
Spurring Broader Federal Cannabis Policy and Guidance
Rescheduling will likely prompt additional federal policy development and guidance for the cannabis industry as a whole. This presents a critical opportunity for hemp and marijuana stakeholders to align and advocate for a clear, effective federal legal framework for all THC-containing products—foods, beverages, supplements, cosmetics and inhalables—while establishing a separate pathway for medical cannabis products intended for treating conditions.
Momentum for Comprehensive Cannabis Reform: Call for Congressional Action
Rescheduling is a massive incremental step toward the ultimate solution of descheduling marijuana and implementing appropriate regulations. This broader push for comprehensive cannabis reform can energize advocacy efforts to address the fundamental issues plaguing the hemp industry, such as federal finished product regulation and inconsistent regulatory oversight.
It strengthens the argument for sensible, science-based cannabis regulation across the board, drawing lessons from state-level experiments with marijuana and hemp oversight.
Rescheduling reinforces the imminent needed for congressional action to regulate both medical and adult use THC containing products appropriately for consumer safety. We are already seeing new energy supporting congressional frameworks like the Strengthening the Tenth Amendment Through Entrusting States (STATES) 2.0 Act and the Cannabinoid Safety and Regulation Act.
Comprehensive Cannabis Reform: The Case for Descheduling and Unified Regulation
While marijuana is taking a significant administrative step towards descheduling, hemp is already there. Both industries share the common challenge of navigating a fragmented federal-state regulatory landscape and FDA illegality that urgently requires dedicated congressional action to establish stable, responsible regulations.
Only Congress can address the full limitations of rescheduling and provide a comprehensive federal cannabis regulatory model.
The significant shift in federal perception and the anticipated injection of capital into the broader cannabis industry create a critical opportunity for the hemp and cannabis stakeholders to organize, engage and advocate for the necessary legislative change.
Shawn Hauser is a partner at Vicente LLP, where she co-leads the firm’s Hemp and Cannabinoids practice and advises companies, investors, and governments on the evolving cannabis regulatory landscape.
