By Yolanda Clarke
May 28, 2026
As countless publications have now reported, April 2026 will undoubtedly mark a seismic shift in the federal government’s stance on cannabis.
In a Final Order (the “Order”) issued by the Department of Justice (“DOJ”), both FDA-approved marijuana products and state-regulated medical marijuana products have been moved to Schedule III of the Controlled Substances Act (“CSA”). Simultaneously, the DOJ formally terminated the previously stalled administrative hearing and initiated an expedited administrative hearing process to consider broader rescheduling of marijuana. The process will commence on June 29, 2026, and conclude no later than July 15, 2026.
Much attention has been paid to the big-ticket items impacting many operators: the tax relief medical cannabis businesses will now see in light of the inapplicability of 26 USC 280E and the ability for state-licensed medical cannabis businesses to pursue an expedited pathway for DEA registration.
However, impacts on Tribal cannabis programs are conspicuously absent from both the Order and the discussion on broader implications for the cannabis industry.
Whether striking out on their own to develop cannabis programs on their own Tribal land, such as the Eastern Band of Cherokee or the Omaha Tribe in Nebraska, or entering into compacts with state governments, such as the White Earth Nation in Minnesota or the Bay Mills Indian Community in Michigan, Tribal nations have continually asserted their sovereignty in the cannabis space. The lack of inclusion or reference to these efforts in the Order highlights the unsung work being undertaken by Tribal nations across the country. It will nonetheless have profound ramifications in the evolving cannabis economy.
DEA Registration for Tribal Cannabis: Risks and Opportunities
In moving medical cannabis to Schedule III, the Order specifically references “FDA-approved drug products containing marijuana and marijuana subject to state-issued licenses to Schedule III.” To justify its decision to permit state licensees to pursue DEA Registration, the Order notes:
The Attorney General has reviewed the operation of these state systems and finds that, taken as a whole, they demonstrate a sustained capacity to achieve the public-interest objectives that underlie the CSA’s registration framework, including protecting public health and safety and preventing the diversion of controlled substances into illicit channels.
Given the strong compliance framework of Tribal cannabis programs in line with the now-rescinded Wilkinson Memo, there is no reason for excluding Tribal cannabis programs from the Order’s reference to “state-issued licenses” or to pit state-licensed medical cannabis operators against Tribally-licensed medical cannabis operators. Indeed, in states with compacts in place such as Minnesota and Michigan, Tribal licensees are already authorized to engage with state licensees, making this new distinction more confounding.
Was this omission a simple oversight from the DOJ, or an intentional exclusion aimed at segmenting Tribal cannabis programs from their state-licensed counterparts? And how will this exclusion from the Order impact Tribal cannabis programs moving forward?
Preliminary inquiries with federal Tribal lobbyists indicate the failure to include Tribal-licensed medical cannabis programs from the Order was likely not nefarious, but rather the result of an oversight for a group grappling to conceptualize one of the largest changes to federal cannabis policy in recent decades.
Despite the unreasonable omission, this situation presents new opportunities for Tribal nations to expand their cannabis programs and influence the industry, encouraging Tribal operators to see potential for growth and innovation.
Closed-Loop DEA Registrant Supply Chain
Potentially one of the biggest hurdles and opportunities Tribal cannabis programs may face due to DOJ’s order pertains to DEA Registration.
While the Order creates an expedited pathway for state-licensed medical cannabis entities to obtain Federal DEA registration as manufacturers, distributors, and/or dispensers, that categorization is not without restrictions. Once registered with the DEA, registrants will be required to use the DEA as a wholesaler to comply with the United States’ treaty obligations under the United Nations Single Convention on Narcotic Drugs. This not only introduces a new monetary consideration (DEA wholesale pricing is currently set at $113/kilo) for operators but also restricts registrants to dealing with other DEA registrants rather than their wider state-licensed supply chain.
States with solely medical programs, such as Florida or Kentucky, are likely to see all operators register, lessening this impact. States with hybrid adult-use and medical licensing, however, may see more upheaval, as some licensees may register and others will not.
Tribal operators will be caught in this crossfire. Without the ability to register with the DEA, Tribal operators will be unable to interact with state-licensed medical operators who have completed registration, potentially limiting product sources for their own Tribal cannabis stores or purchasers for Tribally produced medical cannabis.
However, Tribal nations are nothing if not resourceful and can use this DEA registrant exclusion to their benefit. Especially in states with hybrid programs and compacting, there will be state operators who will choose not to register but who will still want purchasers for their medical cannabis products and/or will be seeking medical cannabis product sourcing for their retail storefronts. As non-DEA registrants, Tribal cannabis operators can be prepared to step into the void created by the removal of DEA registrants from the rest of the state’s supply chain.
Tribal Cannabis and Interstate Commerce
Another major implication of the Order, and for Tribal cannabis, involves interstate commerce.
To be clear, the Order does not immediately authorize interstate commerce for state-licensed cannabis operators. The new 21 CFR § 1301.13(k) repeatedly conditions a registrant’s authority on “the limitations of its state license.”
Whether interstate commerce will be permitted will depend on whether a state’s laws and regulations allow for it. Currently, some states contemplate the issue, but none explicitly allow interstate commerce.
Tribal nations may be well poised to take advantage of this opening. Individual Tribal communities may choose to update their Codes to allow Tribal licensees to engage with licensees from other Tribal nations, regardless of state jurisdictional boundaries, providing a fast-track for the first sanctioned interstate commerce of medical cannabis in the nation once DEA Registration is made available to Tribal nations.
Tax Implications and Increased Capital Availability for Tribal Cannabis Businesses
Moving medical cannabis to Schedule III means that state licensees will no longer be subject to the deduction disallowance imposed by Section 280E of the Internal Revenue Code. As long-time operators know, this disallowance means cannabis businesses pay a far higher total effective tax rate than other businesses, often as high as 70-80%.
It has long been established that Tribal governments and federally chartered Tribal corporations are exempt from federal income taxes. On December 15, 2025, the IRS officially published guidance confirming that wholly owned entities chartered under Tribal law likewise share the Tribal government’s tax status and therefore are not obliged to pay federal income taxes.
Tribal enterprises have frequently been used for Tribal cannabis entities, among many other business sectors. However, for tribes with state compacts, certain state-level taxes may be required, and many states have similar state-level 280E disallowances. Depending on the jurisdiction and the specific language of each tribe’s compact, tax burdens for engaging with state markets are likely to shift.
Tribal cannabis businesses should also be aware that state-licensed medical cannabis operators will now have a lower tax burden than in prior years and potentially with retroactive relief on the horizon. This capital influx may help facilitate larger purchase orders with Tribal entities or generate new interest in partnerships with Tribal nations.
The Continued Importance of the Wilkinson Memo for Tribal Cannabis Programs
Though rescinded during Trump’s first term, the priorities outlined by the Wilknson Memo remain the touchstone for compliant cannabis programs for Tribal nations.
The Order notes that state licensing systems have “developed robust infrastructure for preventing diversion, ensuring product safety, maintaining records, and conducting facility inspections – functions that fulfill the objectives of federal registration and recordkeeping requirements.”
It goes on to state that due to the substantive cannabis regimes at the state level, additional regulatory burdens on compliant state-licensed entities are intended to be minimal, and that “state-required records accepted to the maximum extent possible” and “registrants may rely on state-law labeling, packaging, disposal, and physical-security requirements in lieu of the otherwise-applicable federal requirements,” aside from a required statutory warning label.
The priorities listed in the Order, which they note demonstrate a robust regulatory system sufficient to provide DEA approval for registrations, mirror those listed in the Cole Memo.
As those familiar with Tribal cannabis are aware, the Cole Memo priorities are affirmed as priorities for Tribal cannabis programs in the Wilkinson Memo. Though both Memos were officially rescinded in 2018, the federal government’s policy continued to align with the goals laid out in those documents and is again echoed in the Order.
We have seen a substantial increase in the number of Tribal cannabis programs across the country in the past decade. Existing regulatory bodies should take this time to ensure their Tribal codes align with the Wilkinson Memo priorities, and those Tribal nations in the development phase should ensure that any new statutes or regulations passed likewise affirm the principles from that Memo.
Adherence to Wilkinson Memo priorities will not only help minimize the risk of federal enforcement against Tribal cannabis programs but also best position Tribal nations to be prepared for future inclusion in DEA registration and the potential for interstate commerce.
What’s Next for Tribal Cannabis Under Federal Rescheduling
While the Order is a huge step forward for the federal government’s stance on cannabis, the full impact of its issuance remains unknown. Additional guidance on the Order has already started to trickle out from state regulatory agencies, and more guidance at the federal level is also expected.
The impacts of this Order will continue to evolve, as will its ramifications on Tribal cannabis programs. This generational change in cannabis policy is ripe with new opportunities for Tribal cannabis programs. We look forward to working with our Tribal partners to strengthen existing programs and implement new regulatory systems to build economic security for Tribal nations and their members, now and for generations to come.
