A recent shift in federal policy has changed how marijuana is classified, but not as dramatically as headlines suggest. In April 2026, the Department of Justice reclassified certain marijuana products, specifically FDA-approved drugs and state-licensed medical marijuana, as Schedule III under the Controlled Substances Act.  

This change introduces a new dual framework where some marijuana is now treated as a regulated medication, while most other cannabis, particularly that sold for recreational use, remains federally illegal.  

What Does it Mean? 

For employers, this is an incremental shift, not a wholesale change. This means: 

• No broad legalization: Recreational marijuana remains illegal under federal law.  

• Policies are still enforceable: Employers may continue drug testing and prohibit on-the-job impairment.  

• Federal rules unchanged: DOT and other safety-sensitive testing requirements remain in place.  

However, the reclassification does create new considerations, especially around medical marijuana use. Because certain medical marijuana is no longer categorically “illegal” under federal law, employers may see increased expectations to engage in the interactive process when employees use marijuana for medical purposes. But, keep in mind, this does not require employers to permit impairment at work. It may, nonetheless, require a more thoughtful, case-by-case analysis. 

Most importantly, employers need to keep in mind this federal change does not override state employment laws, which continue to govern most employer obligations. The practical impact will vary by state, including across the states in which Western Growers members operate. 

For California employers, the immediate practical impact is limited but important to watch. Existing California law already restricts certain adverse actions based on off-duty cannabis use and limits reliance on testing methods that detect non-psychoactive metabolites. This federal change does not alter those requirements.  

Multistate employers, including those with operations in Arizona, Colorado, and New Mexico, should also review state-specific rules before changing workplace drug and alcohol policies. Arizona provides protections for registered medical marijuana patients in certain circumstances, while also preserving employer authority to maintain drug-free workplace policies. Colorado generally provides fewer employment protections for cannabis use, and employers may continue to enforce compliant drug-testing and drug-free workplace policies. New Mexico protects medical cannabis status in certain respects, but also preserves employer authority to address impairment, workplace use or possession, safety-sensitive roles, federal compliance obligations, and written zero-tolerance policies. 

In practice, employers should avoid a one-size-fits-all approach. Policies should be reviewed for compliance with each applicable state’s rules on off-duty use, testing methods, impairment standards, safety-sensitive positions, medical marijuana status, federal-contracting or federally regulated obligations. 

Consider these best practices: 

• Review policies to distinguish between prohibited impairment and off-duty use. 

• Train HR and managers on handling medical marijuana accommodation requests. 

• Confirm state law compliance before making policy changes. 

• Monitor developments, as further federal rulemaking is underway.  

To avoid overcorrecting, employers should stay aware of the federal policy shift while also anticipating increased scrutiny of their policies, accommodation decisions, and consistency in handling marijuana-related issues.