In late April 2026, the U.S. Department of Justice, through the Drug Enforcement Administration (DEA), issued a final order placing certain categories of marijuana and related products in Schedule III of the Controlled Substances Act (CSA). The DEA also scheduled an administrative hearing, set to commence June 29, 2026, to receive evidence on whether to fully remove marijuana from Schedule I and place it into Schedule III. The April order and the upcoming administrative hearing may have consequential implications for the cannabis industry. Because marijuana has been classified as a Schedule I drug, cannabis-related businesses have faced significant barriers to capital markets access and financial services. As the DEA moves toward rescheduling, cannabis companies whose businesses are confined to covered Schedule III products and activities may have a path to a national securities exchange listing. For many companies, however, potential obstacles and risks may remain.
Key Takeaways
- The April rule is limited in scope. The DEA has placed FDA-approved marijuana products and marijuana subject to a qualifying state medical marijuana license on Schedule III. Other non-covered marijuana remains in Schedule I. Hemp is outside the CSA definition of marijuana and was not rescheduled by the rule.
- The DEA is undertaking a rulemaking process to determine whether to fully move marijuana to Schedule III, which may alleviate a core listing barrier for certain cannabis companies. Because marijuana has been a Schedule I drug for more than 55 years, exchanges have generally not listed cannabis-related companies because of federal law compliance concerns. To the extent marijuana is fully rescheduled to Schedule III following the upcoming DEA hearing and administrative review process, that key barrier may be removed, at least for cannabis companies whose current and planned operations are directed to Schedule III-compliant products and activities.
- More than approval by a national exchange is required for listing. While satisfaction of the listing standards is a necessary prerequisite for access to national securities exchanges, a broader shift among capital markets participants must also occur before cannabis-sector companies can list. In particular, underwriters, broker-dealers, custodians, and banks must each independently be prepared to support registrants. Legislation such as the Capital Lending and Investment for Marijuana Businesses (CLIMB) Act, if enacted, could provide a clearer path for capital markets access than rescheduling alone.
- Cannabis companies seeking to take advantage of an open window should get IPO-ready now. The first movers in any rescheduling- or legislation-driven window are likely to be companies that can act quickly. Cannabis companies should assess IPO readiness now, including PCAOB audits, public-company financial statements, a complete data room, disclosure drafting, corporate governance, controls, and transaction structuring with particular focus on tax efficiency, so they are prepared to act rather than react if the window opens.
What the April final rule changes and what it does not—and other potential changes ahead
Under the CSA, Schedule I is reserved for substances with no currently accepted medical use in treatment in the United States, a high potential for abuse, and no accepted safety for use under medical supervision. Schedule I substances include heroin and ecstasy. Schedule III substances, by contrast, have a currently accepted medical use, lower abuse potential than Schedule I or II substances, and a risk profile associated with moderate or low physical dependence or high psychological dependence.[1] Schedule III substances include ketamine and Tylenol with codeine.
The April final rule places two principal categories of marijuana and related products in Schedule III: (1) FDA-approved drug products containing marijuana; and (2) marijuana in any form covered by a state-issued medical marijuana license. The rule also creates an expedited DEA registration pathway for qualifying state medical marijuana licensees and preserves import/export permit requirements for covered products.
Although the rule marks an important change in federal marijuana policy, it is limited in several respects. Marijuana outside an FDA-approved product or a state medical marijuana license remains Schedule I. The rule thus does not authorize non-medical manufacture or distribution. And in moving covered products to Schedule III, the rule does not create an unrestricted market. Those products must comply with DEA registration and controlled-substance requirements applicable to Schedule III drugs. Moreover, synthetically derived tetrahydrocannabinol (known as synthetic THC) remains Schedule I, and hemp remains excluded from the CSA's definition of marijuana.
In issuing the April rule, the DEA also announced that an administrative hearing would be convened on June 29, 2026 to consider fully moving all marijuana and related products from Schedule I to Schedule III.[2] If, at the conclusion of the hearing and any further administrative process, the agency reschedules marijuana to Schedule III, the market implications could be far more significant than the more targeted April rule. At the same time, as with the April rule, rescheduling would not broadly legalize marijuana use and sale at the federal level or result in an unrestricted market.
Capital Markets Implications
A national securities exchange listing requires compliance with the exchange listing standards, which generally necessitates that the current or planned activities of the issuer are not in violation of U.S. federal law.[3] Because marijuana has been classified as a Schedule I drug, cannabis-focused companies with U.S. marijuana operations have generally not been able to list on national exchanges. To the extent marijuana is rescheduled to Schedule III, that should improve the pathway for listing, given that Schedule III drugs have accepted medical uses and may lawfully be dispensed under certain conditions.
Importantly, however, the immediate impact of these changes may be limited. Exchanges may be willing to list only companies that can establish their businesses are directed solely to Schedule III-compliant activities. For example, under the April rule, exchanges may be willing to list a cannabis company whose business is solely focused on state-licensed medical marijuana. Many cannabis-related companies, however, may have dispensaries, production facilities, and revenue tied to adult recreational use, which is the much larger portion of the U.S. cannabis industry at the state-legalized level.
These difficulties are likely compounded because a national securities exchange listing also requires the involvement of other market participants, each of which is subject to its own regulations. Depending on the type of transaction, a company may require support from underwriters, placement agents, financial advisors, auditors, transfer agents, clearing agencies, custodians, and broker-dealers. Those participants may have their own assessment of risk with respect to U.S. cannabis-related businesses.
How regulators react, if at all, to rescheduling may have a significant impact. For instance, FinCEN, a bureau of the U.S. Department of the Treasury, initially issued guidance in 2014 about its expectations for financial institutions seeking to provide services to cannabis-related businesses, which has remained an important reference point for institutions conducting customer due diligence, monitoring, and suspicious activity reporting. In light of the April rule, or if marijuana is rescheduled more broadly, regulators may publish new guidance about how they interpret federal regulatory requirements and their enforcement priorities for cannabis-related businesses, which may further inform whether, and the circumstances under which, exchanges and other entities are willing to engage with those businesses.
In addition, Congress is considering legislative changes. For example, the CLIMB Act was reintroduced in March 2026. If enacted, the law would create a safe harbor for exchanges and market participants facilitating cannabis company listings, which would significantly alleviate regulatory uncertainty. We are continuing to monitor these regulatory and legislative developments.
Exchange Listing Readiness
For cannabis companies seeking to capitalize on a rescheduling-driven listing window (or a listing window spurred by other regulatory changes), it is important to begin preparations now. Once the window opens, the market will be crowded.
Listing readiness in this context means being able to move quickly once exchanges, banks, auditors, and investors are all ready to engage. The issuers, therefore, should map out a realistic preparation timeline, determine the type of listing transaction they plan to pursue, and address prerequisite elements for that transaction. Non-reporting issuers will typically need to address at least the following items:
Financial statements and auditors. Engage a PCAOB-registered auditor early; determine whether two or three years of audited financial statements will be required; identify interim financial statement needs; assess acquired-company financials and pro forma requirements; and resolve key accounting matters.
Corporate and capital-structure cleanup. Simplify the cap table; identify investor consent rights, redemption rights, registration rights, convertibles, warrants, options, preferred equity, anti-dilution provisions, debt covenants, change-of-control restrictions, and affiliate arrangements that may potentially impede a listing transaction.
Data room and diligence preparation. Build a complete data room covering licenses, permits, regulatory correspondence, material contracts, real estate, IP, technology, supply chain, tax filings, litigation, employment, environmental matters, insurance, financing documents, governance, and compliance policies.
Disclosure draft. Begin drafting the business description, risk factors, MD&A, executive compensation, related-party transactions, regulatory overview, tax discussion, legal proceedings, and contemplated industry-specific disclosures. The goal is to identify and, ideally, address the most challenging disclosure questions before the market window opens.
Controls and public company infrastructure. Develop disclosure controls and procedures, internal controls over financial reporting, segregation of duties, cash controls, inventory controls, board and committee processes, insider-trading policies, Regulation FD protocols, related-party transaction procedures, whistleblower channels, and D&O insurance planning.
Looking Ahead
The cannabis capital markets landscape is evolving rapidly. The April final rule represents a meaningful step, but for most issuers, it does not resolve all barriers to national exchange listing. Broader regulatory or legislative changes may be on the horizon, and the scope and timing of those changes will inform whether—and how quickly—the path to national exchange listings may open for the cannabis industry. Cannabis companies that intend to move quickly should use this period to set strategic priorities, assess listing-readiness based on the contemplated listing transaction, and resolve the workstreams that take the longest to complete. In a fast-moving market, the issuers that are proactive rather than reactive will be best positioned to capitalize on the opportunities ahead.
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If you have any questions about these developments or would like to discuss how cannabis companies can prepare for a potential U.S. exchange-listing window, please contact Megan Barbero, Matthew Portnoff, Courtney Dixon, Kirill Nikonov, or your regular Venable contact.
[1] For more details, see DEA drug scheduling guidance.
[2] For more details, see Notice of hearing on proposed rulemaking.
[3] See Nasdaq FAQ 1474. NYSE and NYSE American adhere to identical policies.