WASHINGTON — A group of congressional Republicans is preparing legislation that would deschedule marijuana nationwide — removing cannabis from the federal Controlled Substances Act entirely, rather than simply moving it to a lower schedule.
According to reporting from The Marijuana Herald, which cited two congressional staffers, the proposal is expected to be introduced in the House ahead of the midterm elections. It would closely track the Marijuana Opportunity Reinvestment and Expungement (MORE) Act in its core mechanism — full removal from the CSA — but would strip out the social equity provisions that have made Democratic descheduling bills a non-starter with most Republicans.
If it lands, it would be the first federal descheduling bill in history with Republican sponsorship. Every one of the MORE Act’s 75 current sponsors is a Democrat.
Descheduling vs. Rescheduling: Why the Difference Matters
This is the distinction that gets flattened in most coverage, and it’s the single most important thing to understand about federal marijuana policy right now.
Rescheduling moves marijuana from Schedule I to a lower tier — Schedule III, in the current proposal. It stays a federally controlled substance. It stays under DEA authority. It remains illegal to produce and sell outside of a federally sanctioned framework. What changes is the regulatory weight and, critically, the tax treatment.
Descheduling removes marijuana from the Controlled Substances Act altogether. Federal prohibition ends. States keep full authority to prohibit, permit, or regulate cannabis however they choose — Kentucky could keep its medical-only framework, Idaho could maintain total prohibition, Colorado could keep its adult-use market. The federal government simply stops treating cannabis as a scheduled drug.
The forthcoming Republican bill is descheduling. The DEA process currently underway is rescheduling. They are separate tracks moving at the same time, and they do not depend on each other.
Where the Existing Descheduling Bills Stand
Nearly 100 members of Congress are now sponsoring some form of descheduling legislation, spread across three main vehicles:
The MORE Act (H.R. 5068) — 75 House sponsors, all Democrats. It would remove marijuana and tetrahydrocannabinols from the federal schedules, create procedures to expunge certain federal marijuana convictions, allow resentencing for people currently serving federal marijuana sentences, and bar marijuana activity from being the sole basis for denying federal benefits, immigration protections, or security clearances. It would also open Small Business Administration programs to state-legal cannabis businesses and establish a federal excise tax funding community reinvestment.
The Cannabis Administration and Opportunity Act (CAOA) — reintroduced July 16, 2026 by Senators Cory Booker, Chuck Schumer, and Ron Wyden, joined by 14 additional Democratic senators for 17 total. It would deschedule cannabis and build a national regulatory and taxation framework on top, plus expungement and resentencing provisions.
The STATES 2.0 Act — the only bipartisan option, with eight House sponsors. It does not deschedule. Instead it amends the CSA to exempt state- and tribal-legal marijuana activity from most federal enforcement, effectively resolving the federal-state conflict without ending federal prohibition outright.
The pattern here is worth naming: descheduling has volume but no bipartisan support, while the bipartisan bill stops short of descheduling. A Republican-led descheduling bill without equity provisions is an attempt to break exactly that deadlock.
The Parallel Track: DEA’s Schedule III Hearing Just Closed
While Congress works the legislative angle, the executive branch has been running its own process.
President Trump issued an executive order on December 18, 2025 directing the Attorney General to expedite moving marijuana from Schedule I to Schedule III. On April 23, 2026, Acting Attorney General Todd Blanche issued an order that immediately placed FDA-approved marijuana-containing products and state-licensed medical marijuana products into Schedule III, and launched an expedited administrative hearing on broader rescheduling.
That hearing ran from June 29 to July 15, 2026 — 17 days of testimony before DEA Chief Administrative Law Judge Derek Julius. In an unusual configuration, the DEA itself argued for rescheduling, while all seven outside designated participants opposed or questioned it, including anti-drug organizations, the Tennessee Bureau of Investigation, and the states of Nebraska, Idaho, Indiana, and Louisiana.
Judge Julius set August 17, 2026 as the deadline for optional post-hearing briefs of up to 50 pages, along with proposed transcript corrections. After that, he issues a recommended decision, which goes to the DEA Administrator. There is no statutory deadline for a final ruling.
What Descheduling Would Change for Cannabis Businesses
The financial consequences are where descheduling separates itself most sharply from the status quo.
Taxes. Section 280E of the tax code bars businesses trafficking in Schedule I or II substances from deducting ordinary business expenses. Cannabis operators routinely pay effective tax rates that would be fatal in any other industry. Rescheduling to Schedule III eliminates 280E exposure. Descheduling eliminates it permanently and removes the underlying scheduling question entirely.
Banking and payments. This is the operational bottleneck most people underestimate. Because cannabis remains federally scheduled, the major card networks and mainstream payment processors will not touch plant-touching businesses. Dispensaries run cash-heavy, lean on cashless ATM workarounds of varying legality, and pay premium rates to specialty processors willing to carry the risk. Standard merchant services platforms — the ones ordinary small businesses use to accept a card and reconcile their books — decline these accounts outright. Descheduling would, over time, dissolve that barrier and let cannabis retail operate on the same rails as any other licensed storefront.
Interstate commerce and capital. Federal descheduling opens the door to interstate transport, normal bankruptcy protection, standard commercial lending, and institutional investment currently sitting on the sidelines.
What This Would Mean in Kentucky
Kentucky is a useful test case for why “states keep their own laws” is doing heavy lifting in every descheduling bill.
Governor Andy Beshear signed Senate Bill 47 on March 31, 2023, legalizing medical cannabis effective January 1, 2025 and making Kentucky the 38th state with a medical program. The framework is deliberately narrow: no home cultivation, no smoking of raw plant material — vaporization is permitted — and THC caps of 35% for flower, 70% for concentrate, and 10mg for edibles. Recreational cannabis remains illegal.
Rollout has been slow. As of May 2026, roughly a dozen dispensaries were open statewide with 469 practitioners certified to recommend. On June 2, 2026, Beshear issued an executive order adding 15 conditions to the qualifying list, bringing the total to 21 — drawing pushback from Republican legislative leaders. Meanwhile the 2026 session declined to grant hearings to HB 401 (home cultivation and smoking), HB 403 (employment protections), HB 198 (adult-use possession), or HB 199 (a constitutional amendment referral).
Separately, the conditional pardon that had shielded certain Kentuckians purchasing medical cannabis out of state was rescinded in mid-2026. Cardholders buying from out-of-state dispensaries now face potential law enforcement action.
Federal descheduling would not change any of that. Kentucky’s restrictions are Kentucky’s own. What it would change is the federal overlay — and for one group in particular, that overlay is significant.
The Veteran and Firearms Question
The ATF has warned Kentucky residents that participating in the state’s medical marijuana program makes them prohibited persons under federal law, barring them from purchasing or possessing firearms. That prohibition flows directly from marijuana’s status as a federally controlled substance.
In a state with a large veteran population and deep firearms culture, this is not an abstraction. It is a live choice between a state-legal medical treatment and a constitutional right — a tradeoff that exists solely because of federal scheduling. Rescheduling to Schedule III does not clearly resolve it. Descheduling would.
The Case Against
Opposition to descheduling is substantive and comes from more than one direction.
Law enforcement organizations and several state governments argued during the DEA proceeding that loosening federal controls increases impaired driving, youth access, and illicit-market activity operating under cover of legal markets. Prohibitionist groups point to rising THC potency in modern products as materially different from the cannabis that shaped older policy debates.
There is also a regulatory-vacuum argument that cuts across ideological lines. Descheduling removes marijuana from DEA authority without automatically creating a replacement framework — which is precisely why the CAOA pairs descheduling with a national regulatory and taxation system. Critics note that a bare descheduling bill risks a period with no coherent federal oversight of product safety, labeling, or potency at all. Congressional analysts have also flagged that relaxing federal controls could implicate U.S. obligations under international drug treaties.
And some cannabis policy observers question whether a Republican bill stripped of expungement and resentencing provisions addresses the enforcement history that made descheduling a priority for many of its earliest advocates.
What Happens Next
Watch three dates and one signal.
August 17 — post-hearing briefs due in the DEA rescheduling proceeding, after which Judge Julius prepares his recommendation.
Before the midterms — the expected introduction window for the Republican descheduling bill. Introduction is not passage; most cannabis bills die in committee. But the sponsor list will tell you whether this is a serious coalition or a messaging exercise.
The 2027 Kentucky session — where any expansion of the state’s program, home cultivation, smoking, or employment protections would have to originate, regardless of what Washington does.
The signal to watch: whether any sitting Republican signs onto a full descheduling bill. That single data point has never happened. If it does, the ceiling on federal cannabis reform moves for the first time in decades.
TEG Report covers federal and state policy developments affecting South Central Kentucky. Subscribe to the newsletter for ongoing coverage, submit a tip if you have information on this story, or learn more about TEG Report.
Sourcing: The Marijuana Herald, NORML, Congressional Research Service, DEA, Ohio State Moritz College of Law Drug Enforcement and Policy Center, Marijuana Policy Project, and the Kentucky Office of Medical Cannabis. This article is reporting and analysis, not legal advice.