Workers' Compensation: Marijuana Rescheduled: Workers' New Rights

The Trump Administration has made history. On April 23, 2026, Acting Attorney General Todd Blanche signed an order immediately placing both FDA-approved products containing marijuana and marijuana products regulated by a state medical marijuana license in Schedule III of the Controlled Substances Act.

This follows President Trump's December 18, 2025, Executive Order on Increasing Medical Marijuana and Cannabidiol Research, in which the Administration acknowledged that the FDA completed a review in 2023, finding scientific support for marijuana's use to treat anorexia related to a medical condition, nausea and vomiting, and pain.

For more than fifty years, marijuana had been grouped alongside heroin and LSD as a Schedule I substance — a classification declaring it to have no accepted medical use and a high potential for abuse. The executive order was described as "the most significant shift in US drug policy in decades."

From Schedule I to Schedule III: What Changed

The rescheduling applies to only two types of marijuana products: those that are FDA-approved and those that are regulated under a state medical marijuana license. The rescheduling does not immediately affect recreational marijuana.

A new DEA administrative hearing beginning June 29, 2026, will provide a pathway to evaluate broader changes to marijuana's status under federal law, with the administration stating it wants to strengthen medical research while maintaining strict federal controls. The hearing process will conclude no later than July 15, 2026.

Critically, the shift to Schedule III means that medical marijuana researchers would no longer have to go through the onerous process of obtaining a Schedule I license to study the substance — a process long regarded as intensely rigorous.

A Game-Changer for States

Forty states have legalized medical marijuana, and 24 have legalized recreational use. The Justice Department stated that the rescheduling action "recognizes the longstanding regulation of medical marijuana by state governments and the need for a common-sense approach to this reality."

For those states, federal reclassification provides meaningful validation. The old Schedule I designation had long been used by employers, insurers, and federal programs as a justification to deny reimbursement to patients using state-authorized medical cannabis. Moving marijuana to Schedule III, a category shared by ketamine, anabolic steroids, and Tylenol with codeine, formally acknowledges what 40 state legislatures had already concluded: that marijuana has recognized medical utility.

Rescheduling could also lead to more robust scientific evidence about the effects of marijuana, as less-burdensome DEA requirements lead to more research, and medical marijuana companies may find more success lobbying for insurance coverage if marijuana is recognized as having a "currently accepted medical use."

New Jersey Workers' Compensation: Ahead of the Curve

New Jersey's courts had already arrived where the federal government is now heading. In the landmark case of Hager v. M&K Construction, the New Jersey Supreme Court ruled that an employer and its workers' compensation carrier must reimburse an injured worker for his medical marijuana expenses. The court held that through competent medical evidence, marijuana was shown to restore function and relieve symptoms, and that medical marijuana constitutes reasonable and necessary care under the New Jersey workers' compensation scheme.

The facts of Hager are compelling. Vincent Hager was a laborer injured in 2001 when a truck delivering concrete dumped its load onto him. After surgeries failed to relieve his nerve pain, he enrolled in New Jersey's medical marijuana program in 2016, using it both for pain treatment and to overcome an opioid addiction.

The employer's primary legal argument. that reimbursing marijuana costs violated the federal Controlled Substances Act, was squarely rejected. The court ruled that the federal CSA did not preempt the state's medical marijuana law, nor would it subject the employer to potential federal criminal liability for aiding and abetting. In a 7-0 decision, the court found that M&K was not "electing" to aid the worker's possession of marijuana but was being compelled by court order, and thus could not be considered as intentionally committing an offense.

With federal rescheduling now recognizing marijuana's accepted medical use, that aiding-and-abetting argument becomes even weaker. A federal appeals court had previously ruled against reimbursement under the Longshore and Harbor Workers' Compensation Act precisely because federal law defined cannabis as a substance "with no accepted medical use." That rationale is now eroded.

What This Means Going Forward

The Trump Administration's action does not automatically resolve every legal question. Interstate marijuana commerce remains illegal, recreational marijuana is unaffected, and the broader rescheduling rulemaking continues. Moving marijuana from Schedule I to Schedule III, without other legal changes, would not bring the state-legal medical or recreational marijuana industry into full compliance with federal controlled substances law.

But for injured workers in New Jersey and the growing number of states that mandate or permit medical marijuana reimbursement in workers' compensation proceedings, federal rescheduling removes the most powerful weapon in the arsenal of employers and carriers who sought to deny treatment. The legal landscape has shifted, and workers' compensation stakeholders must be prepared.

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