Trump Administration Moves to Reclassify Cannabis from Schedule I to Schedule III

The Trump administration moved Thursday to reclassify cannabis under federal law, which could significantly expand scientific research into the drug's medical uses. The change would not legalize the drug at the federal level, but shift cannabis from its current status as a Schedule I substance to Schedule III under the U.S. Drug Enforcement Administration's controlled substances framework.

In a release, the Department of Justice said it will immediately move FDA-approved products containing marijuana along with items regulated by a state medical marijuana license to Schedule III. It also announced an expedited hearing in June to consider the formal reclassification of cannabis to Schedule I at the federal level.

"Together, these actions provide immediate and long-term clarity to researchers, patients, and providers alike while still maintaining strict federal controls against illicit drug trafficking," the DOJ said.

Drugs in Schedule I, which include heroin and LSD, are considered to have no accepted medical use and a high potential for abuse. Schedule III drugs, like Tylenol with codeine and testosterone, by contrast are recognized as having medical applications and are subject to fewer regulatory restrictions.

Reclassification lowers longstanding barriers that have made it difficult for researchers to study cannabis in clinical settings. The financial implications are significant too. It would exempt cannabis companies from IRS Code Section 280E, allowing them to deduct standard expenses like rent and payroll for the first time, and opens the door for banking access that was previously barred.

The move marks one of the most significant federal shifts on marijuana policy in decades, signaling a growing willingness in Washington to reconsider how the drug is categorized and studied in the U.S. Scientists have faced strict approval processes, limited supply access and heavy compliance requirements when attempting to examine cannabis for therapeutic use, including chronic pain, PTSD and neurological disorders.

Those federal barriers remained in place even as roughly half of states have legalized marijuana for recreational use, and even more have approved it for medical use.

"While operators would still face a fragmented state-by-state system, the improved cash flow from rescheduling would support reinvestment, strengthen stability, and help build momentum for more consistent standards over time," said Wendy Bronfein, co-founder and chief brand officer at Curio Wellness, a Maryland-based cannabis company.

The action follows an executive order issued last year directing federal agencies to begin the reclassification process, which typically unfolds over several years and involves scientific review, interagency coordination and rulemaking procedures.

"This rescheduling is not the finish line — it is the final stage of a race we have been running for decades," said Shawn Hauser, partner at cannabis law firm Vicente LLP.

In 2024, the Biden administration started that process and put reclassification before the public for a 60-day comment period. After that window, hearings to review potential hurdles stalled in the handoff between administrations.