After Rescheduling: The Three Roads to Interstate Cannabis Commerce

For more than a decade, state-siloed markets have defined American cannabis law. Every legal adult use state, from Colorado and Washington in 2012 on, built a closed loop: cultivation, processing, distribution, and retail all confined within its own borders. Importing or exporting cannabis to other states has been treated as a bright legal line no operator could cross. 

That line was never drawn by Congress, nor required by the Controlled Substances Act (CSA) in so many words. It emerged as an industry-wide risk-management response to a specific federal posture that took shape starting in 2013, and with medical cannabis's move to Schedule III completed and adult use’s move now potentially underway, that posture is changing in ways operators and multistate businesses should watch closely. 

The 2013-2014 Cole Memorandum issued by the Obama Administration’s Justice Department set out federal enforcement priorities for legal states, including preventing diversion of product across state lines. It never technically banned interstate commerce, but no legislature was going to test that theory, so states built (constitutionally questionable) residency requirements, seed-to-sale tracking, and import/export bans into their statutes as federal goodwill insurance. 

Even after the Cole Memo was rescinded in 2018, the architecture stuck, and every constitutional “dormant commerce clause” (DCC) challenge to those restrictions ran into the same wall: because cannabis was Schedule I, with no federally recognized lawful channel, courts held that the Constitution's protections for interstate commerce simply didn't reach it. A state can't be forced to facilitate commerce in something federal law says has no lawful use at all. 

Rescheduling does not legalize interstate commerce, preempt state import/export bans, or resolve the operational differences between state programs. But it removes the legal premise nearly every court has relied on to reject DCC challenges: that cannabis is categorically illegal with no lawful federal channel. That premise is now on shakier ground. The DEA's April 2026 order already moved state-licensed medical cannabis and FDA-approved cannabis products to Schedule III, and an expedited administrative hearing that was just completed weighed whether to move all cannabis there. A recommendation from the presiding administrative law judge regarding rescheduling adult use cannabis is expected to follow, though a formal decision awaits post-hearing briefs, and the outcome, regardless of the decision, is all but certain to be contested further in court. 

The legal theory underlying maintaining state-siloed markets is weaker than it was eighteen months ago. Once cannabis sits in a schedule where Congress has expressly recognized a lawful medical channel, reinforced by a live DEA registration process, the argument that cannabis exists wholly outside the reach of the Commerce Clause becomes harder to sustain. Courts are already signaling as much. For example, in oral argument this June before the Ninth Circuit in Lamar Central Outdoor, LLC v. City of Perris, federal appellate judges pushed back on arguments premised on cannabis being categorically illegal under federal law. 

For those wondering when they will be able to ship product across state lines, there is not one mechanism to watch, but at least three. The first is state legislative reform: the legislatures that built the wallsprohibiting interstate activity can take them down. Newer medical-only states in particular may find it more attractive to import from mature markets than to wait years for in-state infrastructure. With this approach, expect an uneven, state-by-state rollout rather than a single national trigger. 

The second is DCC litigation. With the “categorically illegal” premise weakening, constitutional challenges to state import/export bans have a real chance of landing differently than in the past. States, however, will likely respond by leaning on public-health and testing-standard justifications, and courts will have to decide how much weight those deserve. This is probably the slowest pathway, since litigation moves through multiple court levels, but potentially the most sweeping if it succeeds. 

The third approach runs through interstate compacts. California's SB 1326, with counterparts in Oregon, Vermont, and Washington, authorizes the state to enter interstate agreements once triggers occur, including federal law changes on interstate commerce or DOJ guidance de-emphasizing prosecution of interstate commerce. This is the most incremental path: it doesn't require national consensus, just one willing partner state, and could move faster than the other two once triggered.  

One constraint gets less attention than it deserves but should not be ignored: the Food Drug and Cosmetic Act, separate from the CSA, generally bars interstate commerce in new drugs lacking FDA approval, a category that currently seems to include every state-legal cannabis product, except a few like Epidiolex that have been FDA-approved. The FDA has so far declined to enforce against state-licensed businesses, but operators building toward interstate distribution shouldn't assume that exposure disappears simply because the CSA schedule changes. 

None of this changes any operator's obligations today. Every existing state import/export ban remains fully enforceable, and product generally should not move across state lines under current law. Even with the DOJ advising that DEA-registered operators may import and export product (but have not specified the same as to interstate transfers), operators in any event must comply with laws of the state of both import and export, and none has yet authorized interstate activity. Multistate operators should map the regulatory gaps between their license states, since legal authorization and operational readiness for interstate sales are really two separate projects. The compact states are worth watching closely, since SB 1326-style triggers could activate faster than legislative reform or nationwide litigation resolves. The same is true for the D.C. Circuit litigation and the ALJ's post-hearing recommendation, both of which will shape how much weight the Dormant Commerce Clause argument ultimately carries. 

Will the move to cannabis interstate commerce truly commence in the months ahead? Much depends on the choices to be made by state officials and active litigants in the space. Stay tuned.  

This article was written by David Feldman and Magnolia Mullen; it is for general informational purposes and does not constitute legal advice. Cannabis remains a controlled substance under federal law, and interstate transport of cannabis products is currently prohibited under both federal and virtually all state law. Businesses should consult counsel before making any decisions based on the developments described above.