The Trump administration has taken a significant step toward reshaping federal marijuana policy, moving to reclassify state-licensed medical cannabis from Schedule I to Schedule III under the Controlled Substances Act. The change, signed Thursday by Acting Attorney General Todd Blanche, stops short of legalizing marijuana federally but marks one of the most substantial shifts in cannabis regulation in decades.
According to The Associated Press, Blanche’s order reclassifies state-licensed medical marijuana without legalizing either medical or recreational use at the federal level. Instead, it loosens regulatory restrictions, offers tax relief to licensed operators, and expands the scope of permitted research into cannabis.
The administration has emphasized medical research as the central justification for the policy change. In a post on the social platform X, Blanche wrote, “These actions will enable more targeted, rigorous research into marijuana’s safety and efficacy, expanding patients’ access to treatments and empowering doctors to make better-informed healthcare decisions.”
One of the most immediate impacts of the order is that federally approved researchers will face fewer barriers when studying cannabis obtained through state-licensed programs. Federal authorities will not pursue enforcement actions against researchers working with legally obtained state cannabis products. In addition, licensed medical marijuana businesses will, for the first time, be allowed to deduct business expenses on federal taxes—a major financial change for the industry.
Despite these adjustments, the policy does not legalize marijuana under federal law or align federal rules with the 40 states and the District of Columbia that allow medical marijuana programs. Of those, 24 states and D.C. also permit recreational use in limited amounts.
The administration has been clear that the move is not intended to signal federal legalization. When President Donald Trump initiated the rescheduling process in December, he warned against recreational use, stating, “If it’s abused, it’s never safe to use powerful, controlled substances in recreational matters, and especially in this case, if you take a look, illegal and unregulated drugs, very, very bad thing.”
Even with Schedule III status, marijuana remains a controlled substance. As a result, major financial restrictions remain in place, including continued limitations on access to traditional banking services for cannabis businesses. Most federal criminal penalties related to marijuana also remain unchanged.
The Drug Enforcement Administration (DEA) will hold an administrative hearing beginning June 29 to review the rescheduling proposal. DEA Administrator Terry Cole said in a statement that the agency is “expeditiously moving forward with the administrative hearing process,” noting it aims to bring consistency and oversight to a historically fragmented policy area.
Industry figures and legal experts have described the move as meaningful but incomplete. Wendy Bronfein, co-founder and chief brand officer of Curio Wellness, told CNBC that the change could improve research access and financial stability for operators. Cannabis attorney Shawn Hauser called it “the final stage of a race we have been running for decades,” while noting it is not the end of reform efforts.
However, critics argue the decision goes too far. Kevin Sabet, CEO of Smart Approaches to Marijuana, told The Associated Press there are better ways to expand research “without giving a tax break to Big Weed and sending a confusing message about marijuana’s harms to the American public.” He added, “With this move, we are now confronted with the most pro-drug administration in our history.”
