Controlled Substances Act (Federal Law)
Cannabis remains illegal under federal law and is classified as a Schedule I substance under the Controlled Substances Act (CSA). This federal status applies nationwide and affects cannabis businesses even in states like New York where adult-use retail is legal.
State legalization protects you from state enforcement only. It does not override federal law.
What This Covers
- Federal classification of cannabis
- How Schedule I status affects operations
- Limits created by federal illegality
- Enforcement authority
Federal Classification
Cannabis is classified as a Schedule I controlled substance.
- Schedule I substances are defined as having:
- No accepted medical use under federal law
- High potential for abuse
- Cannabis is listed alongside other Schedule I substances
- Federal law applies regardless of state legalization
This classification drives many downstream restrictions.
Operational Impacts
Federal illegality affects multiple parts of your business.
- No federal banking protections
- Banks must apply enhanced monitoring and reporting
- No federal tax deductions for most expenses
- Basis for Internal Revenue Code § 280E
- No access to federal loans or grants
- Excluded from SBA, USDA, HUD, and similar programs
- Increased risk in leasing and insurance
- Federally backed landlords or insurers may prohibit cannabis tenants
Interstate and Mailing Restrictions
Federal law controls movement and transport.
- Transporting cannabis across state lines is illegal
- Shipping cannabis through USPS is illegal
- Federal law applies even if both states have legalized cannabis
- Mailing cannabis-related products tied to THC remains prohibited
State law does not authorize interstate activity.
Enforcement and Oversight
Identifies federal enforcement authority.
- U.S. Department of Justice (DOJ)
- Drug Enforcement Administration (DEA)
Federal enforcement priorities may change, but the law remains in effect.
What Operators Usually Miss
- State legalization does not change federal criminal law
- Federal restrictions affect banking, taxes, and leasing
- Marketing, shipping, and transport risks are federal issues
When This Comes Up
- Opening bank accounts
- Filing federal taxes
- Negotiating leases or insurance
- Considering shipping or multi-state operations
What Happens If You Ignore This
- Loss of banking access
- Federal tax exposure
- Contract or lease violations
- Increased enforcement risk
Related Pages
Source Material
