Louisiana Pulls Out of Multi-State Suit Against DEA Rescheduling

Louisiana Attorney General Liz Murrill has withdrawn her state from a lawsuit challenging the Trump administration's decision to reschedule marijuana from Schedule I to Schedule III, leaving Indiana and Nebraska as the remaining plaintiffs in the case.

Murrill, a Republican who initially joined the suit last month alongside her counterparts in Indiana and Nebraska, did not provide a public explanation for the reversal. The withdrawal marks a significant shift in the multi-state effort to block the Drug Enforcement Administration's historic rescheduling action announced in April.

The lawsuit, filed by the three conservative attorneys general, argues that the federal government's move to reclassify cannabis undermines state law enforcement efforts and conflicts with their interpretation of the Controlled Substances Act. The plaintiffs claim the rescheduling process was rushed and failed to adequately consider public safety concerns.

The Rescheduling Timeline

The Trump administration's DEA announced the rescheduling decision in April, following a multi-year review process that began under the Biden administration. The move would shift cannabis from Schedule I—reserved for substances with "no currently accepted medical use"—to Schedule III, a category that includes drugs like ketamine and anabolic steroids.

Schedule III classification would maintain federal prohibition but reduce criminal penalties and, crucially, allow state-licensed cannabis businesses to claim standard tax deductions under Section 280E of the tax code. Industry analysts estimate this change could save compliant operators hundreds of millions of dollars annually in tax liability.

The rescheduling has not yet taken effect, as it remains subject to a formal rulemaking process and potential legal challenges.

Opposition From Conservative States

Indiana Attorney General Todd Rokita and Nebraska Attorney General Mike Hilgers continue to lead the legal challenge. Their complaint argues that rescheduling would create regulatory confusion in states that have not legalized cannabis and could complicate enforcement of existing drug laws.

"This unilateral action by the federal government disregards the concerns of states that have chosen not to legalize marijuana," Rokita said in a statement when the suit was filed.

But Louisiana's withdrawal suggests potential cracks in the coalition. The state has a limited medical cannabis program but has resisted broader legalization efforts, making Murrill's initial participation somewhat expected. Her reversal could signal shifting political calculations as public opinion on cannabis continues to evolve—even in conservative states.

Industry Response

Cannabis industry groups have largely welcomed the rescheduling move, viewing it as a critical step toward federal reform even if it falls short of full legalization.

"Rescheduling addresses the most immediate financial burden facing legal cannabis operators," said Aaron Smith, co-founder of the National Cannabis Industry Association. "The 280E tax issue has forced compliant businesses to pay effective tax rates exceeding 70% in some cases."

The remaining lawsuit faces uncertain prospects. Legal experts note that federal agencies have broad discretion in scheduling decisions, and courts typically defer to executive branch determinations on scientific and medical matters.

What's Next

With Louisiana's exit, Indiana and Nebraska must decide whether to continue their legal challenge or seek additional state partners. The DEA's rescheduling process continues on a separate track, with a final rule expected later this year barring successful legal intervention.

Meanwhile, congressional efforts to pass comprehensive cannabis reform legislation remain stalled, despite bipartisan support for banking access and other incremental measures. The rescheduling action represents the most significant federal policy shift on cannabis in decades—one that appears likely to proceed despite opposition from a handful of states.

The case is being heard in the U.S. District Court for the District of Columbia.

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This article is based on original reporting by www.marijuanamoment.net.