Federal Schedule III — Implications for North Dakota

Legal Disclaimer: This information reflects North Dakota cannabis law as of June 2026 and is for educational purposes only. It is not legal advice. Laws and regulations change — always verify current rules with the North Dakota Department of Health and Human Services (NDDHHS) Division of Medical Marijuana or a qualified attorney. Cannabis remains illegal under federal law.

Last verified: May 2026

The December 2025 Trump Executive Order

In December 2025, President Trump issued an executive order directing federal agencies to advance Schedule III rescheduling for state-licensed medical cannabis and FDA-approved marijuana products. The executive order built on the August 2024 DEA Notice of Proposed Rulemaking from the Biden administration; the rescheduling process had been pending federal-court challenges throughout 2024-2025.

The April 28, 2026 DOJ Order

On April 23, 2026, Acting U.S. Attorney General Todd Blanche issued an order downgrading state-licensed medical cannabis and FDA-approved marijuana products from Schedule I to Schedule III of the federal Controlled Substances Act, published at 91 Fed. Reg. 22714 on April 28, 2026. The DOJ press release stated: "The Department of Justice is delivering on President Trump’s promise to expand Americans’ access to medical treatment options."

Gov. Armstrong’s Public Posture

Gov. Kelly Armstrong publicly noted the policy "gets complicated really quick" without endorsing or opposing. Armstrong has stated federal rescheduling would not change ND state law. His posture reflects both policy caution and recognition that ND’s Compassionate Care Act framework operates independently of federal scheduling.

What Schedule III Rescheduling Would Change

Federal Criminal Exposure (Some Reduction)

State-licensed medical cannabis operations would face reduced federal criminal exposure. Schedule III substances (codeine combinations, ketamine, anabolic steroids) are legal under federal law with appropriate prescribing authority. State-licensed cannabis operations would presumably fit within the rescheduled framework.

IRS § 280E Relief

IRS § 280E denies normal business deductions for businesses trafficking in Schedule I or Schedule II substances. Schedule III rescheduling would allow state-licensed cannabis businesses to claim normal business deductions, substantially reducing effective tax rates. For Pure Dakota and Curaleaf-affiliated Grassroots Cannabis in ND, this would be a meaningful financial improvement.

Banking

Federal banking restrictions on cannabis-business accounts would substantially ease. Major banks could service state-licensed cannabis businesses without the same federal-regulatory risk.

Research

Federal cannabis research would be substantially eased. Schedule III status permits more flexible research protocols compared to Schedule I.

What Schedule III Rescheduling Would NOT Change

ND State Law

Per Armstrong: federal rescheduling would not change ND state law. The Compassionate Care Act (N.D.C.C. ch. 19-24.1) operates as state-law authorization within the medical framework. Recreational cannabis would remain illegal under N.D.C.C. ch. 19-03.1. Concentrate Class C felony at any weight would persist. Cultivation felony would persist.

Federal-Employee Drug Testing

The April 28, 2026 Schedule III rescheduling order does not modify federal-employee drug-testing rules or security-clearance adjudication. Executive Order 12564 (Drug-Free Federal Workplace), Drug-Free Workplace Act of 1988, SF-86 disclosure, Adjudicative Guideline H, and Personnel Reliability Program frameworks remain in force. A federal employee, contractor, or clearance-holder testing positive for cannabis — even with valid ND patient recommendation — faces the same career-ending consequences as before.

FMCSA Part 382 (CDL)

Federal Motor Carrier Safety Administration Part 382 drug testing for CDL drivers continues unchanged. Cannabis use disqualifies regardless of state recommendation or federal Schedule III status.

FRA Part 219 (Railroad)

Federal Railroad Administration Part 219 drug testing for safety-sensitive railroad employees continues unchanged.

CBP Border Enforcement

Customs and Border Protection cannabis policy at the U.S.-Canada border continues unchanged. Crossing with cannabis remains federal trafficking exposure regardless of Schedule III status. See Manitoba/Canada page.

Implementation Status as of May 2026

April 28, 2026 DOJ Schedule III order published (91 Fed. Reg. 22714).
Implementation challenged in federal court by various opposition parties.
Status of any final rule remains in flux.
State-licensed medical cannabis operations are watching court rulings closely.

Implications for ND Reform

Federal Schedule III rescheduling, if upheld, could:

Normalize cannabis politically, softening ND voter coalition opposition for 2028 ballot measure.
Reduce ND state-licensed operator (Pure Dakota, Grassroots Cannabis) tax burden.
Ease banking access for ND cannabis operations.
Provide federal-research support that could inform ND policy debates.
Reduce some federal-installation drug-testing concerns in opposition framing (though not change formal rules).

Federal Schedule III rescheduling does not, however, eliminate the federal-installation drug-testing reality, the Bakken oil-patch drug-testing reality, the CBP border reality, or the ND state-law structure that opposed three consecutive recreational ballot measures.

The Burgum Connection

Former ND Gov. Doug Burgum serves as U.S. Secretary of the Interior in the second Trump administration. The Interior Department oversees federal land (~28% of U.S. land area), Bureau of Indian Affairs, and the National Park Service. Cannabis-policy intersection points include federal-land cannabis policy and tribal-cannabis program coordination. Burgum’s position gives ND a federal-cabinet voice on cannabis-adjacent issues.

Federal Schedule III Rescheduling Implications for North Dakota