The United States federal government reclassified state-licensed medical marijuana on Thursday, ending decades of policy that placed the drug in the same category as heroin and had long restricted its use in scientific research.
The U.S. Department of Justice announced that FDA-approved cannabinoid-based medications and state-licensed medical marijuana will move from Schedule I to Schedule III under the Controlled Substances Act. This change does not legalize recreational marijuana at the federal level, but it opens new possibilities for medical research and has important economic effects for the cannabis industry.
From Heroin to Ketamine
Previously, marijuana was classified as a Schedule I substance alongside heroin, LSD, and ecstasy. The Drug Enforcement Administration defines Schedule I drugs as having a high potential for abuse and no accepted medical use. The new classification places marijuana in Schedule III, a category that includes drugs with moderate to low potential for dependence, such as ketamine, anabolic steroids, and Tylenol with codeine.
This reclassification will directly affect scientific research. Under Schedule I, federal regulations made it difficult to conduct large-scale clinical studies on marijuana’s medical properties, and many universities avoided such research due to concerns about federal funding. With marijuana moving to Schedule III, researchers investigating cannabinoids such as THC and CBD will encounter fewer regulatory barriers.
“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,” said acting Attorney General Todd Blanche.
Years in the Making
The push to reclassify marijuana spans multiple administrations. The Biden administration initiated the rulemaking process in 2024, following the Department of Health and Human Services‘ scientific and medical review recommending a move to Schedule III. That effort stalled in bureaucratic limbo before Biden left office.
In December 2025, President Trump issued an executive order directing the DOJ to continue the reclassification process. Progress was slow, resulting in frustration among industry professionals. At an Oval Office event, Trump expressed impatience, stating that officials were delaying action on the issue.
Thursday’s decision fulfills that directive and initiates an expedited administrative hearing process scheduled to begin June 29 to consider broader rescheduling beyond state-licensed medical products. It also legitimizes medical marijuana programs across the 40 states that have adopted them, with only a small number of states maintaining strict marijuana prohibitions.
Billions on the Line
This change will also have a big economic impact. Since the early 1980s, cannabis businesses have had to follow IRS Section 280E, which stops companies dealing with Schedule I or II drugs from deducting normal business expenses. Whitney Economics estimates the industry has paid about $15 billion in extra taxes since 2018, with some businesses facing tax rates of 70% or more.
Brian Vicente, a founding partner of Vicente LLP, a Denver-based cannabis law firm, described the potential relief as transformative. “We’re talking about billions of dollars in new economic activity, tens of thousands of new jobs — really a wind in the sail for this industry that’s paid a very heavy tax burden for years,” he said.
The effects of this change may extend beyond the U.S., with industry analysts suggesting it could accelerate regulatory reform in the U.K., the EU, and other places, as governments may now review their old classification systems.
What Doesn’t Change
Despite the significance of the move, recreational marijuana remains federally illegal. The reclassification does not resolve the ongoing conflict between federal law and the 24 states that have legalized adult use, and it will have no direct impact on people currently incarcerated for cannabis-related offenses.
Some advocates welcomed the decision, while others argued it doesn’t go far enough. Adam J. Smith of the Marijuana Policy Project called it “a historic step towards sanity in cannabis policy,” but said cannabis should be removed from the scheduling system entirely.
Opposition Moves Quickly
Not everyone sees the reclassification as progress. Sen. Tom Cotton (R-Ark.) pushed back immediately, writing that “marijuana today is much more potent than just ten or twenty years ago, leading to increased psychosis, anti-social behavior, and fatal car crashes.” He called the reclassification “a step in the wrong direction.”
Anti-legalization organization Smart Approaches to Marijuana, which has retained former Attorney General Bill Barr as its attorney, announced plans to pursue immediate legal action to block the order. Its CEO, Kevin Sabet, was direct in his criticism. “With this move, we are now confronted with the most pro-drug administration in our history,” he said. “Policy is now being dictated by marijuana CEOs, psychedelics investors, and podcasters in active addiction.”
The White House, however, defended the decision, with spokesman Kush Desai calling it “a welcome step to increase critical research into possible medical applications of cannabis.”
Austin Burgess is a writer and researcher with a background in sales, marketing, and data analytics. He holds an MBA, a Bachelor of Science in Business Administration, and a data analytics certification. His work focuses on breaking scientific developments, with an emphasis on emerging biology, cognitive neuroscience, and archaeological discoveries.