AWH files DEA applications for 51 medical cannabis dispensaries

Ascend Wellness Holdings became one of the first cannabis operators to seek federal registration under the DEA's new Schedule III pathway, a milestone in the industry's push for normalization.

Ascend Wellness Holdings filed applications with the DEA to register its medical cannabis operations under the agency's new Schedule III pathway, becoming one of the first multi-state operators to test the expedited registration process created by the historic rescheduling.

"This is an important first step for medical cannabis patients and the medical community, while laying the groundwork for broader normalization across the industry," said Sam Brill, CEO and Director of AWH.

The applications cover dispensary operations supporting medical cannabis patients across AWH's core markets. The company operates 51 retail locations across seven states — Illinois, Maryland, Massachusetts, Michigan, New Jersey, Ohio and Pennsylvania — and maintains more than 260,000 square feet of canopy across six cultivation, processing and manufacturing facilities.

The filing represents the first tangible corporate response to the DEA's rescheduling of marijuana to Schedule III, a shift that frees operators from the Internal Revenue Code Section 280E tax penalty, which previously barred cannabis companies from deducting ordinary business expenses. The change could save multi-state operators tens of millions of dollars annually and improve cash flow for reinvestment.

The rescheduling, finalized earlier this year, marked the first major federal cannabis reform in more than 50 years. Under Schedule I, cannabis was classified alongside heroin as having no accepted medical use and a high potential for abuse — a designation that subjected operators to a federal effective tax rate exceeding 70 percent in some cases. The move to Schedule III aligns cannabis with substances such as ketamine and codeine, recognizing its medical utility and reducing regulatory barriers.

The DEA's expedited registration pathway allows state-licensed medical operators to apply for federal registration without first surrendering their state licenses, a Catch-22 that had effectively blocked federal recognition for years. AWH's applications now put the agency's new process to its first major test.

Industry Implications Extend Beyond AWH

The filing carries significance for the broader cannabis sector. If approved, AWH's federal registration could establish a template for other multi-state operators — including Curaleaf Holdings, Trulieve Cannabis and Green Thumb Industries — to follow. The DEA is also scheduled to hold a hearing on adult-use cannabis rescheduling, which could expand the pathway beyond medical operations.

The financial stakes are substantial. The elimination of 280E tax treatment could boost operating margins for publicly traded U.S. cannabis operators by 10 to 15 percentage points, according to industry estimates cited by investment banks covering the sector.

What Comes Next for Federal Cannabis Policy

The DEA's hearing on adult-use rescheduling represents the next potential catalyst for the industry. Brill expressed optimism about the proceeding, which could extend federal recognition beyond medical cannabis. "Further reform will help establish a more level playing field for cannabis operators and could align the industry with more economic opportunities and regulatory frameworks available to traditional businesses," he said.

For investors, the key question is timing. The DEA has not disclosed a timeline for processing the expedited registration applications, and the adult-use hearing schedule remains subject to change. AWH trades on the Canadian Securities Exchange under the ticker AAWH-U.CN and on the OTCQX under AAWH.

This article is for informational purposes only and does not constitute investment advice.