DEA grants licenses to over 900 medical marijuana dispensaries

The Drug Enforcement Administration issued federal licenses to more than 900 medical marijuana dispensaries on Friday. This marks the first time the agency has granted such registrations to these businesses. The Department of Justice announced the approval in a statement but did not name the specific companies that received the licenses.

The licensed dispensaries operate in Alabama, Florida, Mississippi, South Dakota, Texas, Virginia, and West Virginia. Attorney General Todd Blanche signed an order in April to change the federal status of state-licensed medical marijuana. He moved the substance from Schedule I to Schedule III. Schedule I includes drugs with no accepted medical use and a high potential for abuse, such as heroin. Schedule III has stricter regulation but allows for greater flexibility.

Blanche said in the statement that regulated distribution from these stores will help ensure broader access to chronic pain treatment. He also noted it improves the safety of the American public. The reclassification legitimizes medical marijuana programs in the 40 states that have adopted them. It also created an expedited system for state-licensed producers, manufacturers, and distributors to register with the DEA. Companies must pass a pre-registration investigation and meet security, record-keeping, and inventory control requirements.

The new federal status allows these businesses to claim standard business expense deductions on their federal tax returns. Previously, companies could not deduct costs like advertising, rent, or labor because they operated in an industry deemed illegal at the federal level. Industry members described that financial burden as devastating. The change could provide substantial tax benefits to the sector.

About 7,000 other cannabis dispensaries, manufacturers, and distributors across the country have also applied for registration. The DEA published a list of these applicants on Friday. Steph Sherer, founder of Americans for Safe Access, noted that the licenses were issued just days before California marked the 30th anniversary of being the first state to legalize medical marijuana.

Scherer stated in a release that the federal government is now recognizing dispensaries that patients fought to establish. She called the decision a major victory for patient access. She described it as an opportunity to build on three decades of progress. Chris Lindsey, vice president for state policy and advocacy at the American Cannabis and Hemp Trade Association, called the development a positive step. He noted that the industry is watching to see what specific operational requirements the DEA will impose next.

Questions remain about how the DEA will regulate these businesses compared to other Schedule III drug companies. State laws often allow people with certain criminal histories to run licensed marijuana businesses. It is unclear if the DEA will adopt that same approach. Many states have merged recreational and medical marijuana industries. The Trump administration has attempted to reclassify marijuana more broadly, but the treatment of adult-use cannabis businesses is still unclear. Twenty-four states plus Washington, D.C., have authorized recreational marijuana. Idaho and Kansas remain the only states that ban marijuana entirely.