Medical Marijuana Rescheduled to Schedule III: What Hospitals and Health Care Facilities Need to Know Now

Executive Summary

The U.S. Department of Justice and the Drug Enforcement Administration issued a final rule on April 28, 2026, immediately rescheduling FDA-approved products containing marijuana and state-licensed medical marijuana from Schedule I to Schedule III of the Controlled Substances Act. This historic action – the culmination of a multiyear federal review process – fundamentally alters the legal landscape for medical cannabis and carries direct operational implications for every hospital and health care facility in the country.

However, the immediate effective date has created a significant regulatory gap: while rescheduling is now the law, critical implementing guidance from CMS, the DEA, the FDA, and state agencies has not yet been issued. Hospitals face the uncomfortable reality of operating under a new federal framework without clear rules on coverage, prescribing standards, formulary inclusion, or conditions of participation. This alert summarizes what we know, what remains unresolved, and what your organization should do now.

Key Takeaways

1. What Happened

On April 28, 2026, DOJ and DEA published a final rule, effective immediately, rescheduling the following to Schedule III:

• FDA-approved products containing marijuana;
• Products containing marijuana subject to a state medical marijuana license;
• Marijuana extracts as defined in 21 C.F.R. § 1308.11(d)(58); and
• Naturally derived delta-9-THC in FDA-approved products or subject to a state medical marijuana license.

Critically, this rule does not apply to recreational or adult-use cannabis, which remains classified as Schedule I. The distinction between medical and recreational cannabis is now a central compliance issue.

2. Why Hospitals Must Pay Attention

Schedule III reclassification has immediate and practical consequences for hospital operations:

• Patient Expectations. Patients holding state medical cannabis certifications will increasingly present at hospitals expecting their facility to accommodate – or at minimum not penalize – their medical cannabis use. Hospitals should anticipate a significant influx of patient inquiries and access requests.
   
• Operational Parallels. Schedule III classification places medical cannabis alongside substances hospitals already manage, including ketamine, anabolic steroids, and certain combination products containing codeine. Existing controlled substance infrastructure provides a framework but requires adaptation.
   
• Committee Preparedness. Credentialing committees, pharmacy and therapeutics (P&T) committees, and formulary committees must begin evaluating whether and how medical cannabis products may be integrated into institutional practice.
   
• Employment and Workplace Policies. Drug-free workplace policies, pre-employment screening protocols, and for-cause testing programs must be re-evaluated in light of the Schedule III classification for medical use.

3. The Immediate Regulatory Gap

Guidance is pending from the following agencies:

• CMS – Medicare and Medicaid coverage implications, conditions of participation, survey and certification standards, and reimbursement determinations.
   
• DEA – Registration requirements for hospital pharmacies, recordkeeping obligations under 21 C.F.R. Part 1304, prescription monitoring program integration, and storage/security standards.
   
• FDA – Approved products, labeling standards, clinical use guidelines, and any required Risk Evaluation and Mitigation Strategies (REMS).
   
• State Boards of Medical Examiners – Prescribing authority, scope of practice for Schedule III cannabis, physician certifications versus traditional prescriptions, and continuing education requirements.
   
• State Pharmacy Boards – Formulary inclusion, hospital pharmacy dispensing protocols, and inventory management requirements.

Until this guidance is issued, hospitals occupy an uncertain middle ground: the legal classification has changed, but the operational rules have not been fully articulated. We advise against making premature, material policy changes in advance of regulatory guidance.

4. Key Compliance Considerations for Hospitals

While awaiting formal guidance, hospitals should begin internal assessments in the following areas:

• Controlled Substance Policies. Review and identify provisions that may require revision to accommodate Schedule III medical cannabis products.
   
• Pharmacy Protocols. Evaluate whether existing pharmacy infrastructure – procurement, storage, dispensing, waste management – can accommodate medical cannabis products under Schedule III requirements.
   
• EHR Documentation. Assess electronic health record systems for capacity to document medical cannabis certifications, reconcile with medication lists, and flag potential drug interactions.
   
• Credentialing and Privileging. Determine which providers will be authorized to certify or prescribe medical cannabis, and how this will be reflected in credentialing files and delineation of privileges.
   
• Drug-Free Workplace Policies. Evaluate employee drug testing policies and accommodation obligations for employees with valid medical cannabis certifications, particularly in safety-sensitive positions.
   
• Patient Safety. Develop or update protocols addressing patient use of medical cannabis during inpatient stays, potential drug interactions, surgical considerations, and discharge planning.
   
• Formulary Committees. Begin preliminary discussions within P&T committees regarding criteria for potential formulary inclusion of specific medical cannabis products once FDA and state guidance is available.

5. Recommended Next Steps for Hospitals and Health Care Facilities

We recommend the following measured approach:

1. Form an Internal Task Force. Convene a cross-functional working group including general counsel, compliance, pharmacy, medical staff leadership, human resources, and nursing to coordinate your institution's response.
    
2. Conduct a Controlled Substance Policy Audit. Review all existing policies governing Schedule III controlled substances and identify provisions that will require modification once implementing guidance is issued.
    
3. Monitor Federal and State Guidance Actively. Establish a systematic process to monitor publications from CMS, DEA, FDA, and your state's boards of medicine and pharmacy. Consider subscribing to Federal Register alerts.
    
4. Engage Legal Counsel. Work with experienced health care regulatory counsel to interpret emerging guidance and assess your institution's specific risk profile.
    
5. Educate and Train Staff. Begin developing educational materials for clinical staff, pharmacy personnel, and patient-facing employees addressing the current state of the law and your organization's interim approach.
    
6. Prepare – But Do Not Prematurely Implement – Policy Changes. Draft potential policy revisions and operational workflows in anticipation of guidance, but do not implement material changes until the regulatory framework is sufficiently developed to ensure compliance.
    
7. Review Employment Policies. Evaluate drug-free workplace policies, pre-employment screening programs, and reasonable accommodation obligations in light of Schedule III reclassification.

Looking Ahead

The hearings on whether rescheduling should extend to the entire cannabis plant – including recreational and adult-use products – were held from June 29, 2026, through July 15, 2026, at the DEA Hearing Facility in Arlington, Virginia, with Chief Administrative Law Judge (ALJ) Derek Julius presiding. The DEA acted as the proponent of the proposed Schedule III rule, and seven anti-rescheduling parties were designated to participate. The hearings have concluded, but broader rescheduling is not yet final.

Designated parties must submit post-hearing briefs (written closing arguments) by August 17, 2026. After reviewing the briefs and hearing transcripts, ALJ Julius will draft and submit his official recommendation. There is no statutory deadline for that recommendation; legal observers expect it in late 2026, although it could take longer. The recommendation will be nonbinding, and the DEA and DOJ may follow it or decline to do so.

Once the recommendation is issued, designated parties will have 20 days to submit formal objections. After the objection period closes, the recommendation and the full hearing record will go to the DEA administrator, currently Terry Cole. The administrator will make the final determination: he could adopt the recommendation and place all cannabis in Schedule III, choose Schedule II instead, or maintain the Schedule I status quo for recreational cannabis.

Only after the DEA administrator issues a final rule and it is published in the Federal Register would broader rescheduling become law. Publication would begin a 30-day window for legal challenges. A final determination could come in late 2026 or early 2027, but litigation is virtually certain to follow any final rule. Until then, recreational and adult-use cannabis remains Schedule I.

We also anticipate that CMS, the DEA, the FDA, and state agencies will begin issuing formal guidance in the coming months. We will monitor these developments closely and provide updates as they become available.

For More Information

If you have questions about medical marijuana rescheduling, its implications for your hospital or health care facility, or need assistance developing compliance frameworks or internal policy responses, please contact Lisa Gora or Natalie E. Moszczynski.

The author acknowledges with appreciation the assistance and research from Baker Donelson Summer Associate Elliott Liebling.