Longtime Budding Trends readers know we try to lead each post with a bit of pop culture or witty turn of phrase. This is one of those posts where the hook took longer to find than the law. Turns out there isn’t a great classic rock anthem about assisted living facilities’ admissions policies. So, we’re doing this one without the needle drop.

Recent Developments in Marijuana Potentially Impacting Assisted Living Facilities

On April 23, 2026, the DOJ and DEA issued a final order moving two — and only two — categories of marijuana from Schedule I to Schedule III of the Controlled Substances Act: (1) FDA-approved substances containing marijuana, and (2) marijuana that is compliant with a state’s medical marijuana regime. That seismic change took effect April 22, 2026. Adult- use marijuana, often called “recreational,” remained in Schedule I. So did any product that isn’t tethered to an FDA approval or a state medical license. This was not, whatever the headlines implied, a blanket legalization of marijuana nationwide. Still, it was hugely consequential for reasons we’ll discuss below.

Separately, DEA conducted an expedited administrative hearing from June 29 through July 15, 2026, on whether to move all marijuana — adult use included — to Schedule III. That hearing recently concluded. The presiding judge gave the parties until August 17, 2026, to file final briefs, after which he’ll issue a nonbindingrecommendation. DEA and DOJ can adopt it, ignore it, or sit on it. We’ve seen this movie before — a 1980s-era cannabis rescheduling hearing ended with the ALJ recommending reclassification (two years post-hearing conclusion), the DEA administrator rejecting that recommendation, and the D.C. Circuit upholding the rejection. History doesn’t necessarily repeat, but in cannabis law it often rhymes.

We also have the D.C. Circuit litigation challenging the April 2026 final order. In that proceeding, the petitioners (led by NDASA, MMJ International Holdings, and Smart Approaches to Marijuana) seek a stay of the final order pending the court’s review on the merits. DOJ filed a brief opposing the stay, arguing petitioners don’t meet the required standard, and MMJ filed its own request to stay the order on July 15, 2026. MMJ and co-plaintiffs filed their reply in support of the stay request on July 16, meaning that motion is now fully briefed and awaiting a ruling from the D.C. Circuit.

In sum, as of today medical marijuana under a qualifying state license sits in Schedule III. Everything else — including the adult-use cannabis that a resident might have used for decades before moving into a facility — is still a Schedule I controlled substance under federal law. That distinction is the whole ballgame for assisted living operators, and it’s exactly the kind of nuance that gets lost when a compliance memo gets summarized in a hallway conversation.

Why This Actually Matters for Assisted Living

Assisted living facilities occupy an uncomfortable overlap because state-licensed healthcare providers are often federally financed or federally insured, while also housing a resident population with high rates of chronic pain, insomnia, and conditions for which medical cannabis is increasingly recommended by state-licensed physicians. Rescheduling doesn’t completely resolve that tension. It just moves the goalposts slightly, and only for the medical-licensed half of the field.

Before we get into specifics, you must understand that federally legal medical marijuana is in a class of its own. There is no controlled substance in the United States that occupies its current legal standing. Its legality is a function of state law, and operators of assisted living facilities must think of marijuana differently than any other controlled substance and adopt uniquely applicable policies accordingly.

We also want to emphasize that anyone operating an assisted living facility needs to engage a lawyer experienced in marijuana rules and regulations to help evaluate existing facility policies in light of the recent (and possible future) changes to marijuana law at the federal and state levels. Yeah, we are lawyers telling you to hire lawyers, but it doesn’t make us wrong. File this in the “ounce of prevention, pound of cure” category.

A few things worth considering when conducting this evaluation:

1. Around half of U.S. states have existing and/or pending laws and regulations directly addressing an assisted living facility’s obligations with respect to cannabis use onsite. The laws differ from state to state, with some requiring patient access, some permitting it, and others setting forth related guardrails for use. Know the requirements in your state(s) and comply.
2. Resident use policies need a hard look, not a rewrite. If your facility is in a state with a robust medical marijuana program, some residents almost certainly qualify under state law. Schedule III status for state-licensed medical marijuana changes some of the federal risk calculus. That calculus may soften for the medical-license category specifically. It has not softened for adult use, and your marijuana policy may need to be bifurcated between medical and adult use rather than treating “marijuana” as one undifferentiated category.
3. Federal funding strings are still attached. Facilities receiving Medicare or Medicaid reimbursement, or federally backed financing, need to watch for guidance from CMS or HHS following whatever comes out of the DEA’s administrative hearings and the DEA’s eventual response to it. We haven’t seen facility-specific guidance from CMS yet, but that’s a gap and not a green light.
4. Staffing and drug-testing policies deserve a second read. Policies built around a blanket “marijuana is a Schedule I controlled substance, full stop” premise are now only half right. Employment counsel should confirm whether your testing and disciplinary policies distinguish between adult use (still fully prohibited under federal law, and lawful under exactly zero federal statutes) and state-licensed medical use, which now sit in a different, albeit complicated, federal bucket.
5. Insurance and banking relationships need a conversation, not an assumption. If your carriers or lenders developed coverage or lending terms due to marijuana’s Schedule I status across the board, ask them directly whether the April order changes anything for residents’ state-licensed medical use on the premises. Don’t guess or assume silence means yes.
6. Watch August 17 and follow the D.C. Circuit litigation, and then watch whatever comes after that. The story won’t end with these events; rather, they commence the next chapter, and the DEA administrator’s eventual decision on the broader rescheduling question could take months or longer to materialize. Build your compliance calendar around checking in periodically, not around treating today’s rules as final.

The Bottom Line

If you operate an assisted living facility and you haven’t touched your marijuana-related policies since before April 2026, now is the time. Not because the world flipped overnight — it didn’t — but because the narrow slice of marijuana that moved to Schedule III is exactly the slice (state-licensed medical use, often for pain or sleep) most likely to show up in your resident population. Getting the medical-licensed/adult-use distinction right in your written policy, rather than papering over it, is the difference between a defensible position and a headache waiting for an auditor, a surveyor, or a plaintiff’s lawyer to find it.

We’ll keep watching the docket and post updates as they become available.

Thanks for stopping by.