What Does Cannabis Rescheduling Mean for Hemp Beverages?
On April 23, 2026, the Department of Justice placed FDA-approved marijuana products and marijuana products subject to qualifying state medical licenses into Schedule III of the Controlled Substances Act.
But the bigger hurdle- whether recreational marijuana should move from Schedule I to Schedule III- is still being decided.
The Drug Enforcement Administration wrapped up its administrative hearing on July 15, and the parties have now filed their final briefs. DEA itself is arguing that marijuana no longer meets the requirements for Schedule I and should be moved to Schedule III.
So what happens next? And perhaps more importantly for the hemp beverage industry, could Schedule III provide another path for THC beverages if Congress moves forward with its new restrictions on hemp?
The answer is more complicated than it might appear.
Where Rescheduling Stands Today
The current rescheduling process dates back to 2023, when the Department of Health and Human Services recommended moving marijuana from Schedule I to Schedule III after conducting a scientific and medical review.
The DOJ proposed moving forward with the change in May 2024, but the administrative process stalled.
President Trump revived the effort in December 2025 when he directed the attorney general to expedite rescheduling. The administration then took an unusual two-part approach in April.
First, DOJ immediately placed FDA-approved marijuana products and marijuana subject to qualifying state medical licenses into Schedule III.
At the same time, it restarted the administrative process that could eventually move all of marijuana into Schedule III.
DEA held hearings from June 29 through July 15. The agency and opponents of rescheduling have now submitted their final arguments.
In the DEA’s final brief, the agency argued that marijuana no longer qualifies for Schedule I because it has a currently accepted medical use in the United States and can be used safely under medical supervision.
What Happens Next?
Chief Administrative Law Judge Derek Julius is expected to review the hearing record and issue a recommended decision.
That recommendation is important, but it isn’t the final say.
The case then goes to DEA Administrator Terry Cole, who will ultimately determine how the agency proceeds. DEA could issue a final rule moving marijuana to Schedule III, keep it in Schedule I, or potentially take another approach supported by the administrative record.
Even a final Schedule III rule may not end the fight. Opponents have raised procedural and legal challenges throughout the proceeding, making federal litigation a real possibility.
There is no firm deadline for Julius to issue his recommendation or for DEA to publish a final rule.
What we do know is the testimony is finished, final briefs are in, and the DEA is now supporting the move to Schedule III.
Schedule III Is Not Federal Legalization
This is where the implications for hemp beverages come into play.
Moving marijuana to Schedule III would be a major federal cannabis policy change, but it would not legalize marijuana nationwide.
Schedule III substances remain controlled under the Controlled Substances Act. Manufacturing and distributing marijuana outside federally authorized channels would remain prohibited.
It also would not automatically authorize marijuana to be sold as an ingredient in conventional foods or beverages.
Congressional Research Service has previously noted that moving marijuana to Schedule III would not make marijuana-infused foods or dietary supplements federally legal. The Controlled Substances Act does not authorize recreational marijuana simply because the substance sits in Schedule III rather than Schedule I.
That leaves THC beverages in an interesting position.
Hemp and Marijuana Still Follow Different Legal Paths
Today’s hemp beverage market exists because Congress removed hemp from the Controlled Substances Act in the 2018 Farm Bill.
If a cannabis product meets the federal definition of hemp, it isn’t a controlled substance under the CSA, which has provided the loophole for hemp-derived THC beverages to exist “legally.”
Rescheduling marijuana does not change that.
Federal regulations implementing the April Schedule III order specifically exclude material that meets the legal definition of hemp from the marijuana and naturally derived delta-9 THC substances placed into Schedule III.
In other words, hemp doesn’t become Schedule III because marijuana does.
The November Hemp Changes Complicate the Picture
Under legislation enacted last November, the new definition uses total THC and establishes a limit of 0.4 milligrams of total THC per finished container. Once those changes take effect, the intoxicating hemp beverages currently on the market would no longer be legal hemp under federal law.
The Senate added language to the continuing resolution spending bill that would delay most of those changes from November 12 to December 11, although the House still needs to vote.
Unless Congress changes the underlying law, the industry could therefore find itself facing two developments at roughly the same time: marijuana moving toward Schedule III while many hemp-derived THC beverages lose their status as federally legal hemp.
What Rescheduling Could Change for Hemp Beverages
Some states are already moving hemp-derived THC beverages into regulated alcohol or cannabis distribution channels. If the hemp ban succeeds, these products will disappear, and the industry will have to decide whether it wants to continue the fight for a federally legal hemp pathway or transition into state cannabis systems.
A Bigger Role for the FDA
Schedule III could also bring more FDA involvement and make it easier to conduct the research regulators need to evaluate cannabis products.
More research could provide better data on dosing, impairment, pharmacokinetics, and safety. That information could eventually support pathways such as a Generally Recognized as Safe (GRAS) determination or food additive approval for cannabinoid ingredients used in beverages.
FDA involvement would not necessarily mean the agency would oversee every aspect of THC beverages. They have authority over ingredient safety and federal food law, while the Alcohol and Tobacco Tax and Trade Bureau (TTB) regulates areas such as alcohol beverage formulas and labeling. A future federal framework for THC beverages could similarly divide responsibility among agencies, although Congress has not yet established what that framework would look like.
Even if a federal pathway for THC as a beverage ingredient eventually emerges, getting those products into a national market presents another challenge.
The FDA pathway has its own limitations. An FDA-approved cannabinoid drug may be able to move through interstate commerce, but that is very different from allowing THC as an ingredient in a conventional beverage. Rescheduling does not resolve how a THC beverage would comply with federal food and drug law or what regulatory pathway would allow it to be sold nationally.
Cannabis attorney Kelly D. Fair, principal at Crestwood Strategies, said a beverage operating within a state cannabis program would still be subject to that state’s cannabis laws, including seed-to-sale tracking and restrictions on interstate marijuana sales. Creating a national market would require additional changes at the state level and potentially interstate compacts.
Dawson Hobbs, executive vice president of government affairs for the Wine & Spirits Wholesalers of America, said a federal TTB framework could include producer permits, manufacturing and bottling standards, label approvals and other requirements already familiar to the alcohol industry. He also cautioned that whichever agency is given oversight would need the funding and manpower to implement and enforce it.
Several questions remain: Who has primary regulatory authority over these products? What federal framework governs manufacturing and distribution? Can they move across state lines? What testing, labeling, and age-gating standards apply? And how does a conventional beverage containing a controlled substance fit within existing federal food and drug law?
The Last Mile
For the hemp beverage industry, the next few months require keeping an eye on two federal tracks.
On one side is the DEA, where the administrative law judge must issue his recommendation. The final decision then rests with the Attorney General, who has the authority to approve, modify, or reject the rescheduling determination.
On the other hand, Congress is deciding whether to delay, revise, or replace the hemp restrictions scheduled to take effect later this year.
Schedule III would be an important change in federal cannabis policy that could provide a potential fallback pathway for hemp beverage brands if the hemp ban is ultimately enacted. If the hemp ban succeeds, these products will disappear, and the industry will have to decide whether it wants to continue the fight for a federally legal hemp pathway or transition into state cannabis systems.
Kelly D. Fair said Schedule III would not automatically allow THC beverages to move across state lines. A beverage operating within a state cannabis program would still be subject to that state’s cannabis laws, including seed-to-sale tracking and restrictions on interstate marijuana sales. Creating a national market would require additional changes at the state level and potentially interstate compacts.
Despite the uncertainty, many industry leaders involved in discussions on Capitol Hill remain optimistic that the pieces are beginning to move in the right direction.
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