On April 23, Acting Attorney General Todd Blanche signed an order moving state-licensed medical cannabis from Schedule I to Schedule III under federal law. The change does not legalize marijuana at the federal level, but it alters how medically authorized cannabis and FDA-approved cannabis products are regulated, producing immediate tax and research benefits for licensed businesses and reducing some obstacles for scientists.
The Justice Department said the reclassification will facilitate research into the drug’s safety and effectiveness, helping clinicians and patients make better-informed decisions. The White House has signaled support: President Trump said he had received calls urging fewer restrictions and directed the administration in December to pursue a faster reclassification. A public hearing is scheduled for June to consider broader changes to cannabis’s federal status, but for now possession and noncompliant uses remain illegal under federal law.
Until this order, cannabis was listed as Schedule I, the category that includes drugs judged to have high abuse potential and no accepted medical use. Moving state-licensed medical cannabis to Schedule III puts it alongside substances considered to have accepted medical uses and lower abuse potential, such as certain codeine formulations.
Practical effects for the industry are significant. State-regulated medical operators should find it easier to access banking services and, importantly, will generally be able to take ordinary business deductions on federal tax returns—expenses that were previously disallowed because of Schedule I status. Financial and industry leaders called the action a historic shift that materially changes the outlook for operators, investors, lenders, and real estate partners and should improve patient access in some states.
Researchers welcomed the order as a relief from restrictive rules that long made clinical studies costly and complex. Advocates say reduced scheduling will increase the supply available for studies and simplify regulatory compliance, enabling more robust clinical trials and evidence development for cannabinoid therapies.
But critics say the move falls short. Some reform advocates want wider changes, while others stress precautions. Public health groups and prevention advocates urged protections for youth, clearer clinical guidance, and better communication about risks. Opponents warned the change could create mixed messages about safety and accused policymakers of responding to industry pressure.
The June hearing will help determine whether this step is followed by broader rescheduling or additional federal policy shifts. For now, the April 23 order represents a notable federal policy adjustment that eases tax and research burdens for state-licensed medical cannabis without granting full federal legalization.