Glossary
Schedule III
The federal controlled-substance schedule that FDA-approved marijuana products and state-licensed medical marijuana were moved to on April 22–23, 2026, removing qualifying medical activity from 280E. Adult-use remains Schedule I.
Why it matters for reconciliation: the split between medical and adult-use activity is a record-keeping matter as well as a regulatory one. Records that keep the two apart from the start are far cheaper to produce than separating them afterward.
Example: a store with both license types books the cost of goods for medical product separately from adult-use product. The same purchase invoice can feed both sides, so each line needs to show which sales it supplied.
Where this comes up on budally.com
Related terms
- 280E
Internal Revenue Code §280E disallows ordinary business deductions for businesses trafficking in Schedule I or II controlled substances. Since the April 2026 order, state-licensed medical cannabis is Schedule III and out of 280E; adult-use cannabis remains Schedule I and under it. Cost of goods sold (§471) remains deductible either way.
- Dual-license
An operator holding both medical and adult-use licenses at a premises. Since April 2026, federal guidance asks dual-license operators to separate medical and adult-use activity in operations and recordkeeping.